PART 2: START A HOME BUSINESS YOU CAN BANK ON!*
Mentor Mama decided that 10-year-old Nick should get something ‘practical’ for his birthday. “Suppose we open a savings account for you?” Mentor Mama suggested. Nick was delighted. “It’s your account, Sweetie,” Mentor Mama said as they arrived at the bank, “so you fill out the application.”
Nick was doing fine until he came to the space for “Name of Your Former Bank.” After a slight hesitation, he put down “Piggy.”
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Now, Mentor Mama knows that all of you are more sophisticated than little Nick and you all have personal checking accounts. You might even have a savings account or some other interest bearing vehicle at a bank. Big deal….so you have a prize hog instead of a piggy. It is time to go whole hog and really step up your game. Since we seem to have a farm theme going on, what with chasing goats, hiring professional goat herders, and now banking with piggies, Mentor Mama thought that this would be a good time to sow the seeds of consciousness about the importance of developing a great relationship with the next member of your team, a professional “piggy” banker.
Choosing the right bank and developing a strong working relationship with a banker will be one of the most important tasks you can undertake in establishing the infrastructure of your home business.
Why do you need a banker?
1. To smooth the bumps in the road: Collecting and processing money is an important daily task. Problems in this arena could cost you time, money, and even business. Your banker can waive fees, expedite the clearing of funds, and cover occasional overdrafts.
2. To guide you to the right products: A bank today is like an enormous foreign supermarket. There are a myriad of products and services that look good, but you’re not really sure what they are. If your banker knows you and understands your business, she can recommend the right combination to best support your particular circumstances. Would it help to interface your accounting software directly with the bank? Do you have instant access to all of your bank account information, including statements and checks?
3. To help you plan for the future: As an entrepreneur, it is important to sell your banker on YOU and the power of your dreams. Once he believes in you, he can advise you to structure your finances, improve your credit score, and establish a pattern of doing business that will help you qualify for loans that meet your specific needs. If you think that you don’t need a loan, but you are paying off a credit card for that last $3000.00 SEO course you took, THINK AGAIN! Don’t forget that your dream of a Joint Venture may require some capital for programmers, pay-per-click ads, graphic designers, travel, etc.
4. To offer you investment products: While a bank is not always the venue of first choice for investing, there will be offerings of varying maturity and risk that may sometimes suit the needs of your business. A good banker will keep you apprised as such products become available. This can save you time and money.
It is important to build your banking relationship BEFORE you need a favor or a loan. Right now, even if all you have is a personal checking account and a business checking account**, you can still begin the process.
How to find a great banker.
1. Get referrals: Talk to other business owners in your area. If you don’t know anyone, ask your accountant or lawyer for some introductions to local bankers that they respect.
2. Make an appointment to meet the banker: Tell her about your business, its form of organization, and your plans for the future. Evaluate whether she seems eager to support you. Do you have good chemistry and feel that you could work regularly with her?
3. Do your due diligence: In everything that you do, be a good consumer.
– Compare interest rates and fees for services.
– Confirm that the bank caters to small business owners.
– Verify that its services can accommodate you as you grow.
– Evaluate your business requirements ahead of time to make sure that the bank offers what you need, such as online banking, small business loans, or safe deposit boxes.
4. Be realistic: No matter how nice the banker or how good the interest rates, you must select an individual that truly grasps the complexities of a growing and emerging business. Ask questions!
How to keep a great banker working for you.
Many of us are not yet in a position where a banker will be drooling over our business. We may have little to offer the banker besides a vision. So how do we keep our business in the forefront of our banker’s mind? My, My, My! Does Mentor Mama really have to tell you? That’s where good old-fashioned friendliness comes into play.
1. Drop by the bank once-in-a-while with a deposit or to cash a check. Try going in once a week until the tellers and banker really get to know your face. You can go in far less often once you have a relationship.
2. Find out if the banker uses Facebook, or some other social media site. Friend him and make a point of interacting about once per week.
3. Be sure to say hello to everyone that you can when you are in the bank . Go to different tellers. Get to know them. Ask about their weekends or if they have children. Pop your head in to say hello to your banker. Remember her name. Comment on the photos she has on her desk.
4. Make yourself stand out. You know those $4 Girl Scout Cookies that you really shouldn’t eat? Or the 99 cents daffodils at Trader Joe’s? Or the stupid $1 candy bars that you have to sell for soccer? Once in a while, bring your banker or favorite teller a little gift! The goodwill that can be generated by such a gesture is priceless. You will truly stand out among all the other small business owners and your efforts will pay off.
5. Refer your friends and business associates. The bottom line here is the bottom line. No matter what altruistic values you have, we all need to earn a living. Let your circle of influence know about your amazing banker. He will reciprocate by working to help you. If he doesn’t, you are with the wrong banker.
Finally, this advice is a lot of hogwash if you do not keep your financial house in order. First and foremost, you must be fiscally responsible or no amount of cookies will get you a loan, no matter how “tight” you and the banker are.
Look, I get that this stuff is boring and you would rather do just about anything else, but you may as well put a bucket under a bull, if you are going to work hard and fail to take the appropriate steps to protect the fruits of your labor. (I just crack myself up with these farm references!) It’s not how much money you make that matters; it’s how much you keep. A savvy banker will help you keep as much as possible. So, Mentor Mama advises you to get your goats in a row. Break open that piggy bank and begin to develop your banking relationships TODAY!
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*Disclaimer: This article is meant for information and discussion purposes only. It is not intended to be comprehensive. Further, this article is not intended in any way to be construed as legal, accounting, or other professional advice. For decisive information about any of these topics, seek out the appropriate professional, who can represent your specific needs.
**You DO have a separate business checking account, RIGHT? And a separate business credit card, RIGHT? Don’t raise your hands….Mentor Mama can’t bear to know! If you aren’t keeping your expenses separate, contact Deborah Stevens, MBA, CPA, directly and she will explain why that is critical!
May 19th, 2010 at 9:50 pm
Hi Mentor Mama,
The professional goatherder here is still chuckling about the bucket under a bull! All kidding aside, you are dead one with your comments here. Bankers are very handy people to know. I love this series.
Debbie Stevens´s last blog ..If You Believe It, You Can Do It
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May 20th, 2010 at 10:45 am
Hi Mentor Mama,
You turn even a boring subject into a fun one! Having been with the same small bank for over 13 years, I can attest to the value of being on a friendly, first-name basis with the entire crew in the bank. They go way beyond the call of duty to accommodate you.
I like the idea of taking a treat to them once in a while. Will definitely do that on my next visit. Thanks for the suggestion:)
Darlene Davis´s last blog ..Success With A Potato Gun?
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May 20th, 2010 at 11:15 am
Thanks for stopping by, Deborah and Darlene! I always appreciate your support. Yes, Bankers are handy people to know! And Darlene, we have been with a large bank, but we have used the local branch for 22 years.
We are treated like royalty because we keep our finances in order and we have groomed the relationship. Because of this, we are afforded many privileges that are just flat out unavailable to others.
Thanks again Ladies!
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May 20th, 2010 at 3:38 pm
Nancy,
I agree that the personal touch works well in banking. It feels great to be able to chat with a person who really knows you and cares about you. Makes everyone’s day to ask how their day has been & connect.
Nice tips to remember,
Val
Val Wilcox´s last blog ..Discover Your Purpose in Life
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May 20th, 2010 at 5:44 pm
Hi Nancy,
Thanks for this great post. I am learning so much from you and Debbie about what I need to do to get the foundation of my business in order and off to a great start. I really appreciate all you share.
Make it a great day!
God Bless,
-ed
Edward´s last blog ..Are You Ready For The Right Place & Time to Show Up In Your Life?
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May 21st, 2010 at 5:38 am
Thanks for all the great business advice. Obviously, starting a business isn’t the time to just jump in without getting all your ducks in a row (ooh, the farm references!).
Solid advice, and I’m sharing with my friends.
Best,
Jennifer
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May 21st, 2010 at 5:57 am
I’m not certain how I found your blog…but I’m glad I did! It seems I’ve found the proverbial: ‘needle in a haystack’ for some of the financial words of wisdom I didn’t get earlier in life.
Time for me to do some financial weeding, ploughing and replanting; both personally and professionally.
Thanks!
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May 21st, 2010 at 8:44 am
Nancy,
This is such an important series Nancy! Setting a solid foundation is so important for your business and a banker is a big part of that. I am really enjoying your blog!
~Gabriel
Gabriel Gannam´s last blog ..Success…Do You Feel You Deserve It?
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May 21st, 2010 at 1:02 pm
Great post! I agree wholeheartedly with the importance of having a great relationship with your banker. My husband and I are in rental real estate, and we’ve had a lot of help when cash flow has been tight, from our bankers. I haven’t checked them out on social media though!
Jacqueline Green´s last blog ..Dads with Postpartum Depression, the Bipolar Battle of the Wife of one of Canada’s Former Prime Ministers, and a Common Cure
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May 22nd, 2010 at 9:56 am
I think being financially educated is so important. I know I learn new things every time I visit your blog. I am glad to have a resource that keeps this information concise and easy to understand.
Thanks,
Scott
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May 25th, 2010 at 1:25 am
Nancy
Coming from an accounting background i like any topic about money. I take my hat off to you doing such an interesting post about this topic.
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May 25th, 2010 at 9:03 am
You are opening up a whole new world for me, Mentor Mama! I really never paid any attention to building a relationship with my banker. My personal bank was a small local bank that got taken over again and again until it became part of one of the big banks.
For business I use an e-bank – I met the president years ago and have not seen him since!
Thanks for another fascinating post.
Alan
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May 25th, 2010 at 5:17 pm
Very detailed information! This is great to understand when making the important decision of taking care of our finances! I think of all of this info that I can share with my kids!
Linda G Cox´s last blog ..List Building: The Key to Internet Marketing Success
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May 28th, 2010 at 4:40 pm
I think one of the most valuable things I have found in working with a bank is finding someone with whom you can relate well. Building a working relationship is important but building a trust relationship is more important. We have been able to work things out with our banks simply because we have developed close relationships with one or two individuals there who can actually make some decisions. This has proven to be worth more than any other aspect.
I so appreciate you sharing these important aspects of business…thanks!
Bruce Backman´s last blog ..Training Video 1
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May 29th, 2010 at 9:09 pm
Nancy,
Thanks for this timely post! I am just now shifting things over to our local bank and it is wonderful. You go in & sit down with your banker which makes for automatic relationship building. Great business tips here on your blog!
Take care,
Becca
Becca Moss Kratky´s last blog ..The dreaded detour….or not?
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June 2nd, 2010 at 7:33 pm
In order for us to advance in our professional business careers, we will need to assemble a mastermind team of other professionals we can rely on for expert guidance.
Having a banker as you’ve described here is essential. Thank you for not only sharing this, but for the tips your provided on how to find a great banker to work with!
As always, your blog content is top notch!
Eddie
Eddie Espiritu´s last blog ..How to Succeed in Network Marketing – The Duplication Secret
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June 12th, 2010 at 11:48 am
Thanks for all the great tips Nancy. I’m going to come back from time to time to learn some more about your experiences.
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July 15th, 2010 at 3:35 am
Great post Nancy! I went down to the bank yesterday and it was funny, because all the tellers were saying hello to me. The personal touch in bank is critical. There’s so much competition nowadays!
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