Many small-business owners shudder at the thought of getting a call from their bank. Inevitably, they think there is something wrong.
Our commercial banks are key partners in our businesses. They shouldn't be avoided. Rather, you should invite your banker out to lunch.
I like to see my banker and his or her superior about twice a year, whether I need to or not. Usually, I will have lunch brought into our office once a year so they can see the shop, feel the energy and meet the staff; once a year, I take them out to a restaurant.
It's important to me that they understand my business because I consider it unique; the differences need to be understood if they are going to be appreciated and factored into any of our dealings.
Some banks like to mix up their account managers regularly to keep the relationships from getting too close (that, at least, has been my assumption; maybe it's me?). That is all the more reason to keep in touch and all the more reason to invite out the account manager's superior, who seems to move around less often.
What may surprise you is that I place as much value on what I learn at these lunches about what it takes to be a good small business banking customer as I do in sharing updates about our business.
Banks are smart. They make very good money and manage risk extremely well. If I'm not going to change them, which I am not, I might as well find out how they work and how they look at my business. If I can do something to make myself more attractive to my bank, I'm probably doing something good for me and my business as well.
So, I make it a point to spend equal parts of our lunch time together sharing news about my business and asking about theirs. Among the questions I seek answers to:
1. What ratios are important when they evaluate my financial statements?
2. What new products or services have they recently launched that can benefit my business? It's not all about credit facilities, maybe they have online banking features or products that can streamline our office admin tasks.
3. What types of loans and values are approved at the local branch versus ones that are approved at head office or a district office?
4. What trends are they seeing in the business community in general and, in banking practices, in particular (they are ears to the ground with businesses from all industries and in all shapes and sizes so they are likely exposed to way more than you are)
5. Do they know of any individuals or businesses that would complement mine (call it networking)
Many businesses complain that banks won't lend money to them when we need it. Maybe that's because we only call on them when we're in a pinch.
They are a valuable vendor and service provider to your business every day – treat them like one. Be pro-active in managing the relationship.
Before long, they may be calling you to return the favour or better yet, introduce you to an opportunity that can benefit your business.
Special to The Globe and Mail
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.
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