How to Start Building a Relationship With
Your Bank
Many business people have
problems with banks but one of the main factors in getting your Bank Manager
on your side is your relationship with him. People do business with people
they trust – would you buy a car from someone you don’t trust? No, of course
you wouldn’t and it’s the same with Bankers. They will lend money to people
they trust, people who are trusted to pay the money back.
If you are just starting out
in business, and you know that you will be applying for a loan in the very
near future, then once you have opened your account, ask to see the Bank
Manager. Introduce yourself as a new account holder, tell him a bit about
your business and that you will be seeking an appointment in the next few
months to discuss the possibility of borrowing money. Don’t be tempted to go
into your full ‘pitch’! You are not ready yet and as you don’t get many
chances to create the right impression, why spoil it at this early stage?
Your aim in seeking this
brief ‘hello’ meeting is to show the Bank Manager that you exist, and to
give him a chance to see what a thoroughly nice and trustworthy person you
are! Remember when you were chasing your first boyfriend or girlfriend? Nice
and easy does it; don’t jump in with both feet! You are looking to build a
relationship and a feeling of trust which will withstand the ups and downs
which will invariably come your way!
Here are some pointers on how
you can build a longstanding and mutually beneficial relationship.
Tell Them What’s Happening
and Build Trust in the Process
Communication is one of the
most important aspects in building a relationship so tell the Bank what is
happening within your business. Send them quarterly reports which cover the
key things which have happened, your management accounts, and the good deals
you have picked up for example.
No one likes surprises, and
this flow of information will put the Bank at ease, especially if you are
already borrowing. Aim to meet your Manager at least once a year. Regular
updates will quickly build a relationship and an element of understanding of
what your business is all about.
… And Don’t Forget The Bad
News!
If you are committed to
regular contact the communication between you and the Bank should also
include any bad news you may have. Perhaps not so important if you are not
borrowing, but if you do have a loan then an early call about a problem,
whether large or small, is better that the Bank hearing about it through the
grapevine.
Even if the problem is not a
potential business destroyer a phone call to inform, especially if it could
disrupt your cashflow, would be appreciated by the Bank, and help build
credibility and trust. The willingness to share both good news and bad news
will demonstrate that you can manage your business effectively and
dispassionately.
Understand Why They Do
What They Do
Banks can do strange things
sometimes, and Bank charges, well … where do you start! If you are looking
to build a relationship with a view to borrowing money or to extend what you
already have, then don’t go looking for constant arguments. Understand how
Banks make their money and why they do what they do.
This doesn’t mean rolling
over and accepting every charge which comes your way; by all means query and
challenge, after all it’s a further example of the type of business person
you are. What I am saying is that accept what you can’t change, don’t keep
going on about it otherwise you will put your relationship at risk.
Ask Them to Visit
Seeing a business on the
ground is the best way to understand how it really works. Invite the Manager
to visit your premises (as long as it conveys the impression you are looking
to create of course!).
I know you will agree when I
say that very often you can get a ‘feel’ for a business very quickly after
visiting it for the first time. You can either sense an atmosphere of
excitement or desperation!
Bank Managers visit many
businesses and so they can become very attuned to these subtle messages.
Write a Business Plan
There is no better way of
getting the Bank to understand your business than writing a Business Plan. A
well prepared and written Business Plan will tell the reader everything they
need to know about your business.
If you are looking for
guidance and writing an effective Business Plan read about the tips
contained in my e-book ‘The Secrets
of Writing a Killer Business Plan’
Get Building
It’s a fact of life that
sometime in your business experience you are likely to need a Bank on your
side. Start building a relationship with your Banker today!
More information on
dealing with banks can be obtained from Rob’s latest e-book ‘The Secrets of
Getting Your Bank Manager to Say Yes!’ at
http://www.smallbusinessloansecrets.com
Small Business
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Robert Warlow
© Small
Business Success
http://www.smallbusinesssuccess.biz
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