SunTrust Finds Magic in Six-Year Planning Horizon
Thursday, October 22nd, 2015
For the past two years, bankers in the Savannah region of SunTrust Bank have focused on six-year plans as a tool to help small and mid-sized businesses maximize value. At the same time, the bank has built the capabilities businesses need to help execute their plans.
“In just the Savannah region, we have financed three or four acquisitions in the past couple of months, helped a client transition their business from one generation to another and closed an Employee Stock Option or ESOP transaction. That’s in addition to helping clients achieve their organic growth goals,” said SunTrust Savannah Region President David Camden.
“We have the ability to bring capital market and investment banking capabilities to our clients in comprehensive and complex solutions that are normally only available to public companies.”
Headquartered in Atlanta, SunTrust serves a broad range of consumer, commercial, corporate and institutional clients, providing through its subsidiaries mortgage banking, asset management, securities brokerage and capital market services. In second quarter 2015, SunTrust reported strong year-over-year loan and deposit growth in its wholesale banking segment, which includes commercial, corporate and investment banking.
“We’re gaining a disproportionate share of growth from small to mid-sized businesses. These closely held businesses are responding positively to our efforts to be a good advisor who listens well and helps light the way to financial well-being,” Camden said.
What clients want: growth
SunTrust recently surveyed more than 500 small and mid-sized businesses nationwide on their growth goals and business plans. According to Camden, “business owners are very interested in three things.”
“Number one, business owners are interested in how to grow organically – 57 percent are actively thinking of ways to grow their businesses. Number two, 25 percent are interested in the right type of acquisition. And number three, 30 percent might consider merging with another company if they knew how to go about doing it.”
While business growth is clearly top of mind to survey respondents, only a third of the survey respondents had completed significant planning for growth and 28 percent had done little or no long-term business planning.
The magic of six years
According to Camden, there is something almost magical about a six-year planning horizon. It is the right timeframe for most clients in terms of being able to step back from the day to day and envision the future.
“In my 30 years in commercial banking, I’ve found that when we ask clients about their plans over the next five years, we tend to hear mostly about organic growth, new equipment or a building expansion they’ll need and possibly new customer segments they may target. It’s mostly near-term plans. When we ask clients where they want to be in 10 years, they say on the beach because it’s such a long time horizon they can’t get specific,” Camden said.
“A six-year planning horizon enables our clients and bankers to have a meaningful dialog on the questions that are most relevant to their businesses.”
SunTrust suggests the following six steps for clients interested in developing a six-year business plan:
- Determine a competitive strategy
- Optimize growth strategies including organic growth, mergers and acquisitions
- Evaluate divestiture opportunities
- Consider capital and debt restructuring
- Define the ownership plan
- Maximize future options
More information on how to develop The Six-Year Plan is available in the SunTrust Resource Center at suntrust.com/SixYearPlan. More information on SunTrust Bank is available at suntrust.com.
