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' – http://smallbusinesssuccess.biz/writing_business_plan.htm
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!
© Robert Warlow
Small Business Success
http://www.smallbusinesssuccess.biz
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
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