Build a Relationship With Your Banker
In the previous article, I discussed the importance of CPA’s to the growth and development of your business. Another key person in your business improvement should be your banker.
You don’t know one? You say, the closest to a banker you get is the friendly drive-up teller or ATM? You are making a serious mistake. And, you’re not alone. Most people don’t know their banker until it’s time for a loan. Not a very good strategy.
Banks have finally realized that small businesses are one of the fastest growing segments of the United States economy. Starting a business is a “more common activity than getting married or having babies,” according to Paul D. Reynolds, coordinator of a pilot study at the Entrepreneurial Research Consortium.
Personally, I have been approached by two large banks–BankBoston and Key Bank–interested in my opinion and suggestions for attracting small businesses. Both banks offer on-line banking in conjunction with QuickBooks. Suddenly banks are taking note of the spending power that small businesses have garnered. This is good news for the small businessperson.
Build a Relationship With Your Banker
First you must have a plan. If you haven’t met the branch manager of the bank where you do business, do it NOW. Just introduce yourself, bring along a business card and spend time explaining what your business does, your goals and mission statement.
Some of the information you may want to share with your banker is your cash flow and your cash management. Some of the trends you may want to watch for are which months are the busiest? The slowest? You can access this information from QuickBooks by using the graph reporting on sales and income. This gives you a visual view of the ups-and-downs of your sales. Obviously, the more historical data available, the more distinguished the trends.
Another report you may want to analyze is your Accounts Receivable Aging. Are your accounts receivables consistent? Or, are they more like floods than dry spells? Check for any gaps. Can you explain them?
Once you have established a pattern, forecasting will help demonstrate when or if you may need a loan. Listen to the different services offered and discuss where your business is headed.
Developing a relationship BEFORE you need a loan is just smart business. Being in charge of your finances is a key factor in determining your seriousness and commitment to your business. Put your banker on your mailing list and be sure to send them any press releases, news articles pertinent to your business and any marketing material you develop. This will make him/her aware of your business and of you as a viable businessperson.
Promoting a relationship with your banker is vital. A banker, as well as a CPA, are key people to have working with you to insure your company’s success and that is the bottom line.