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4 Financial Tips for Making It Through Times of Economic Uncertainty

With the right guidance from trusted experts, this is the time to elevate your business while your competitors hit the pause button.

Inflation and rising interest rates are putting the squeeze on all types of businesses—high-growth companies especially–and there is an understandable tendency for them to want to put their ambitious goals on pause.

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But making drastic moves during uncertain times can be the worst thing you can do for your business's long-term financial health. That's why we spoke with the financial experts at SVB. With decades of experience helping clients in technology, healthcare, life sciences, etc., with things like startup banking, private and wealth management, investment banking and raising capital, these are the steps SVB has seen successful businesses take through previous market cycles that have helped them come out better on the other side.

1. Focus on the fundamentals.

Kristen Craft, SVB's Director of Startup Banking in New England, believes that the smartest business owners stay laser-focused on the fundamentals: achieving product/market fit, generating revenue, and fostering customer stickiness.

"These fundamentals always matter to investors, but they're particularly important within the current fundraising environment," she explains. "These fundamentals are also the ingredients that make for great, long-lasting, beloved companies."

2. Spend smart.

In tough times, business owners need to make decisions to reduce spending and costs. The first place to look, Craft says, is at what is not working. "Business owners should stop spending money on channels that aren't yet bearing fruit. For example, you can get great metrics on the impact of Google AdWords, Facebook Ads, and other social media advertising. If those channels aren't ROI positive, consider putting them on pause," she advises.

You can also look to moving your team to remote working to eliminate real estate costs. But, whatever you do, don't cut back on the tools you need to drive revenue if it introduces friction into your system. "If you're doing all of your prospect and sales calls via Zoom, don't try to get scrappy with a free tool. If webinars have worked for you in the past for lead generation and closing deals, don't switch to the cheapest webinar provider. Maintain your focus on the work and tools that have contributed to revenue in the past."

3. Don't forget about wealth management.

Remember, your personal wealth is just as important as the health of your business. "Times like these are unquestionably a challenge for clients," says Emmett Maguire III, CFA, Head of Multi-Asset Research, SVB Private. But instead of giving into gut instinct and making rash decisions, he recommends business owners do these three things to manage their personal wealth.

  • Revisit your financial plan. Take time to refresh yourself on your time horizon and how your portfolio is constructed to achieve your financial objectives.
  • Be evidence-based. Talk to your advisor about market history to ground yourself in facts and numbers and to understand the tax implications of any portfolio changes you are contemplating.
  • Look for new investment opportunities. You are likely already doing this simply by rebalancing your portfolio on a regular basis. In addition to that, market drawdowns inevitably yield opportunities to acquire quality assets at attractive prices.

4. Tap into your network of knowledge.

Chances are the institution you bank with has seen it all. So have your investors, attorneys, and your accountant. Use the lessons they've learned to help make decisions that will set you up for success.

"SVB has been working with startups and venture firms for nearly 40 years, which puts us in a unique position to provide the right solutions and advice to companies at the right time," says Alex Choy, Managing Director. SVB can help dive into the numbers and find your business the funding it needs. "SVB can provide debt capital that can be used for a number of use cases ranging from runway extension, working capital, acquisition financing, and more," he adds.

In short, advisors like your banker live and breathe finance, so make sure you take advantage of the financial knowledge within your network.

Read more from a serial founder on weathering the new economic challenges, or click here to learn more about SVB, including Silicon Valley Bank, SVB Private, SVB Securities and SVB Capital.

SVB

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