Successful businesses exist because of relationships. In order for a business to thrive, everyone in the company, from front-line workers to the executive suite, must work to develop close relationships with customers, vendors, colleagues, and local communities.
But there is one bond that we often overlook: business bankers.
Business bankers represent the bank, of course, but they’re also your organization’s champion. A good business banker advocates for the success of their client – you! – because that ultimately leads to a more successful community, which in turn helps to support the bank.
Finding a Business Banker
Every bank is unique. And so is every banker. If you aren’t sure where to start, check with other business owners you trust. Ask who they bank with and what their experience has been. Once you narrow down the search to a handful of candidates, make appointments with each of them.
When you meet with potential bankers, ask a lot of questions. Are they familiar with the local economy? How much do they understand your industry? Can they provide case studies that breakdown their results? Can they connect you with other clients you can speak to directly?
A good business banker offers competitive rates and suggests new banking products that will allow your company to save money, increase efficiency, and be more competitive in your market. They’re interested in your short-term and long-term goals and will put their entire team in motion to help you reach those goals.
Communication is Key
If we all know one thing about business, it’s that communication matters. If you only contact your banker when you need a loan, you are probably missing out on valuable insight and advice that could help your day to day operations. Having regular chats to discuss your business keeps both of you informed and ready for any unexpected changes.
Set up a meeting plan with your banker. Decide what the objective for the meetings should be and what information you are looking to learn - or share. Be open in sharing concerns, opportunities and expectations.
These meetings are a great time to disclose financial information, both good and bad. Additionally, ask for an assessment of your borrowing capacity if you need financing for operating costs or expansion. And finally, ask for industry comparisons so you better understand how your company stacks up against others when comparing financial ratios.
Trust is a two-way street. For your banker to be a strong advocate, they first need to understand your needs, and trust you as a worthwhile partner. As we outlined above, so much of this trust is built through communication.
Share who your key employees are, the value they bring, and how your company is succeeding. Be transparent about your current revenue, and future expectations, so that you can have open and candid discussions about strategy and financing.
If you have an expansion planned, and your banker is on board, they still need to sell that plan to their internal credit team for the loan to be approved. That process is much easier if the banker is already confident in you and your business.
If your company is large enough to have a dedicated leadership team or C-Suite, reserve time at least once a year to have your banker meet with them. Spend time brainstorming ways in which the company can grow. An idea-generating session is a great way to help build trust with your banker and showcase the depth of your leadership.
Show Up Prepared
When you meet with your banker, come prepared. Bring copies of your finances – paper or digital – for both of you to review.
Your banker will work closely with you to sketch out likely scenarios based on your industry and current markets. It's also good to work out sales forecasts for the next 6, 12 and 24 months with an eye on your expected cash flows. The cash flow is critical because that’s what you’ll need to repay financing you get from the bank.
If your banker isn’t already familiar with your industry, help them learn about it, and how you expect your business to succeed within that market and against competitors. The better they understand your industry, the more helpful they can be in helping you to grow.
Know your market share and explore ways that, with the banker’s input, you can expand your reach. Ask for — and expect — ideas and strategies from your banker on how to improve financial results. Remember, your banker is your financial partner and should be available to provide advice, counsel, and solutions.
Contingency and Succession Planning
Creating an action plan for possible economic downturns and market shifts is always worth the effort. Be open to sharing these plans with your banker. They can help you understand the risks in your business, such as the potential loss of key customers or a shift in product/service demand.
Should illness or some other crisis prevent you from working, succession planning can ensure your business continues on as uninterupted as possible. The last thing your banker wants is a company solely dependent on a single person running it. If the plan includes current members in your leadership team, introduce your banker to them and create opportunities for them to work together.
Be honest and up front with your thinking and planning. Use these discussions with your banker to gather more input and ideas that can help you survive a crisis.
Building a solid banking relationship, and strengthening it over time, is hard work for both the business owner and the banker. But the effort will pay big dividends for you and your company.
If you’re just beginning your search for a business banker, or you are open to a new perspective, Starion Bank business bankers are here to help you maximize the potential in your business. Click here to find a Starion banker and schedule your appointment today.