One consistent theme: Don’t get overly focused on the crisis of the moment
NORTH BAY – From around the North Bay, wealth advisers, businesses strategists and investment experts weighed in on economic opportunities and dangers in the current environment.
They are presented in alphabetical order.
Bob Bernard is a CPA and partner at Brush Bernard Mitchell CPAs in Healdsburg and the president and owner of Acacia Exchange Services Inc., specializing in 1031 real estate exchanges. He was an investor reporting manager at Wells Fargo Realty Finance and a senior accountant at Hood & Strong CPAs.
“Really, the overriding theme is getting back to basics, solid business and investment fundamentals. The booming economy of the past few years covered up a multitude of sins in the form of loose business practices,” he said.
He said for his small business clients it is focusing on things like managing accounts receivable, inventory control, staffing and their real estate investments.
“When prices were going up 10 to 20 percent a year investors could ignore ratios and essentially play monopoly to make money. Now it is back to the good old days of looking at cap rates – or, more simply, gross rent multipliers – to determine what constitutes a good long-term investment.”
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Lorraine DuVernay is the director of the Redwood Empire Small Business Development Center in Santa Rosa. She advises small business owners on how to stay afloat and counsels them on business plans and financing.
“There is a shift in how lenders are lending,” she said.
Anyone going in for financing needs to have a business plan that includes demographics, operations, history, product service, projections on what the business will look like with the capital injection, marketing strategies, the current economic condition, who is running the business and a background history, she said.
“It is also important to understand the lender’s loan requirements,” she added.
And a business owner should be able to tell the potential lender how much they need, what they need it for, how they are going to repay it, how long it will take, whether they have collateral and if they are willing to personally guarantee it.
Key components for successful business growth, she said, are profitable sales margins, capital and management skills.
Knowing about the administrative side of the business and marketing as well as the production of the business and the strategic plan will help a potential lender see that the plan is well thought out.
“If you are going to go in to see a lender, establish a relationship and be prepared.”
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Michael Gradl is the senior vice president of investment and insurance services at Redwood Credit Union. He has more than 20 years of experience in the financial services industry and has managed the investment team at RCU since 2005.