Despite headlines warning of economic uncertainty, many small businesses across the South Shore are continuing to expand, invest in equipment, and pursue growth, according to a local banking executive.
Itamar Chalif, vice president for small business banking at Rockland Trust, said the outlook he hears from local business owners is far more optimistic than what national economic headlines might suggest. Through his work with small and mid-sized companies across the region, he regularly speaks with entrepreneurs who are focused on expansion rather than contraction.
“Surprisingly, it sounds like their business owners didn't get the memo and they're all moving forward, growing their businesses, buying businesses, buying equipment,” Chalif said. “Very rarely I hear about somebody that's struggling.”
Chalif emphasized that his perspective comes primarily from working with smaller companies rather than large corporations. In that part of the economy, he said many firms continue to perform well despite the broader uncertainty often discussed on television or in national economic reports.
“Look, I can only talk from my own prism,” he said. “For the people that I come in contact with… the business I work with are doing well.”
Still, Chalif said growth can bring its own challenges, particularly when it comes to managing cash flow. One of the most common mistakes he sees is business owners assuming that money in their accounts is immediately available to spend.
“So to make the business run well, business owners have to understand that money in the checking account, not all of it belongs to them when it's there,” Chalif said.
Owners must account for upcoming expenses such as vendor payments, payroll, and taxes. As companies grow, the demand for available cash often increases even if profits are rising.
“As the business grows, actually the faster it grows, the more demands there are on cash,” Chalif said.
That challenge often emerges when businesses land new contracts or expand quickly. A manufacturer that suddenly receives a large order, for example, may need to purchase materials, hire workers, and train staff before revenue from that order arrives.
“The business can be very, very profitable yet have no cash in the bank,” Chalif said.
Another issue Chalif sees is companies paying cash for major purchases when financing could help preserve liquidity. He recently worked with a business generating about $10 million in annual revenue that had spent years buying equipment outright rather than using loans or credit.
“They've been buying equipment, paying cash for it. They have no debt on their books,” Chalif said. “And they're struggling right now because of the winter.”
Seasonal slowdowns, unexpected events, or market disruptions can create financial strain if businesses do not maintain adequate reserves. Chalif said one of the first signs of trouble often appears in accounts receivable, when customers begin taking longer to pay their invoices.
“Especially when economy starts to deteriorate, the first thing that a business would see is that the accounts receivables are stretching because their customers are using them as a line of credit,” he said.
To manage those risks, Chalif encourages business owners to project their cash flow carefully and establish access to credit before financial pressure arises.
“I usually would suggest that they set themselves up with a line of credit,” he said.
Spring is typically one of the busiest seasons for many local industries. Chalif said he is currently seeing increased borrowing from businesses preparing for the busy months ahead, particularly companies that rely on outdoor work.
“Right now is the spring time,” Chalif said. “So a lot of businesses are now buying equipment, a lot of the landscapers, pavers, a lot of equipment right now.”
Despite the positive outlook, Chalif said business owners must balance their optimism with preparation for unexpected challenges. Events like the COVID-19 pandemic demonstrated how quickly conditions can change.
“Business owners are positive people,” he said. “They're in business because they believe in themselves.”
At the same time, he said entrepreneurs should plan for potential disruptions even while pursuing growth.
“They have to put another hat on at the same time and think what if,” Chalif said. “Hope for the best, proceed for the best, but be prepared if things don't go right.”