The past several years have been increasingly challenging for businesses, with what seems like new obstacles shaking up business plans every quarter. As we look ahead, we spoke with Jeff Strasner, UMB Bank commercial banking team lead in Texas, for his insights on top Dallas-Fort Worth business concerns and how leaders are adapting to overcome them.

How is the Dallas business landscape evolving?

The business climate is incredibly robust and diverse. A vast number of businesses have migrated to Texas due to lower cost of living for employees, access to new, top talent, and ease of travel around the U.S. given Dallas’ central location and prominent airport. This has resulted in a continually growing population in the Dallas-Fort Worth area, which is bringing our city to the forefront as businesses consider expansion opportunities.

It’s no secret that we’re in somewhat turbulent economic times. How are your business clients reacting to the current environment?

Many of our clients are remaining optimistic, even in the face of the potential recession, and are hopeful that it’s short and shallow. Texas, and Dallas specifically, is experiencing a lot of growth, so there’s a feeling that the market is more insulated than others from the full impacts of a recession.

Knowing the potential challenges ahead, what are some of the items you’re advising on?

Financial forecasting and modeling

Financial forecasting is more important than ever. This strategic process enables businesses to forecast how their company will perform in the future based on current data and quantifiable changes to their business model.

Internal and external partners can assist with compiling the data so companies can work with their teams to quantify impacts of strategic changes to their business. Establishing a forecast not only helps them gain a better understanding of what’s ahead, it is also a healthy practice to aid in building and maintaining a growth mindset—even in challenging times.

Cash and liquidity

One specific area that has been top-of-mind for many business leaders is cash and liquidity. Businesses worked tirelessly to survive the impacts of the pandemic and are now facing rising interest rates, inflation and more. As they wade through these challenges, we’re advising clients to be proactive with their finances. For instance, assess current cash and income sources and determine how cash and liquidity can best be protected.

To help tighten proverbial business belts, we’re recommending they pay close attention to their expenses so they can proactively identify potential reduction areas. And, based on their business, we’re also encouraging them to consider new ways to optimize sales and cash generation.

Business credit cards 

While it’s obviously not new, we’re having a significant amount of discussion around business credit cards. The spending power and quick access to funds, rebates and rewards is very attractive for companies – especially in volatile economic times. As businesses continue to scrutinize their cash flow, the “float” period between credit card purchases and paying the statement balance can provide helpful and, in some cases, critical flexibility.

Perhaps most importantly, business credit cards also allow companies to tap into benefits like increased administrative features and fraud protection—two critical areas from an efficiency and risk management perspective.

Given the current economic environment, how does UMB plan to approach the new year?

Our theme for 2023 is growth. It may seem counterintuitive given the current state of the economy, however, as a 109-year-old-bank we’ve experienced many times of uncertainty and are prepared for all economic environments. In a time where many banks are putting projects or hiring on hold, we’re hitting the gas and building out teams that will allow us to offer even more services to our clients.

This includes building out a new middle market team in Dallas and hiring a leader for our business banking team as it grows and expands across Texas. Additionally, we recently hired a new national head of commercial credit card who brings extensive experience and will help serve our local clients.

Last, but certainly not least, the lending environment in Texas remains strong. This growth, coupled with our ability and willingness to lend, means we’re well-positioned to continue providing both strategic counsel and financial resources to new and existing customers. UMB’s commitment to this market is substantial and continues to grow, and I’m excited for what’s ahead.

Final thoughts?

While businesses continue to navigate an uncertain economic forecast, there are many proactive steps they can take to ensure they’re prepared to weather any challenges that may occur. As we head into 2023, it’s more important than ever that businesses have a capable banking partner who can work closely with them to create strategic plans for the year ahead.

If you are interested in learning more about how UMB can help your business as a financial partner, visit our website.