All good relationships start by identifying the most suitable partner. The same also applies when a business is seeking a good relationship with a banking institution. Start by choosing a bank that is both convenient in location and services provided. Then, use these tips to grow your banking relationship into something that will benefit your business for years to come.
Set a schedule where your company and your banker will be meeting on a regular basis. Make the objectives of the meetings clear and specify the information that should be shared during meetings. While communication opportunities allow you to share your expectations and concerns, the platform also makes it easier to disclose financial information in a consistent and timely manner. You can also request the bank to provide regular assessments determining your company’s borrowing capacity, so you won’t be surprised when a crisis hits.
Concentrate on making your banker one of the strongest advocates for your business. Trust built over time comes about as a result of good and effective communication structures. Therefore, apply openness while dealing with your chosen banker. When he believes in your company and is willing to stand up for you internally at the bank, everything from loans to questionable transactions will be resolved much faster and more smoothly.
Furthermore, your bank should know the key members of your company and the value they bring to your company in achieving company goals and objectives. Building integrity and trust also means sharing both good and bad news as soon as it happens. Doing so in a timely manner creates a situation where discussions can be held in a candid and open manner.
Prepare your business sales forecast using tangible information. Incorporate financial advisers capable of sketching out some likely scenarios including a downward scenario. Either 12 or 24-month forecasts emphasizing cash flow are best, since that is the best indicator of ability to repay debt and meet obligations. Educate your appointed banker how your business expects to perform in the market and also against its competitors. Know the market share your business controls and encourage your business banking partner to provide input on how you can increase your reach. Remember, your banker can recommend concepts, ideas and strategies that will enable your company to improve its financial results. You should consider your business banker a key financial partner with valuable counsel and advice.
Allow your banker to join your company leadership team on a retreat once every year so that you can build the relationship further. Although there is a risk of exposing weaknesses and gaps in your finances, this process has the ability to improve communication and build trust if done properly. Also, a great banker can help you face those obstacles head on, or even provide capital to overcome them.
Building a good business banking relationship is a process that takes time and effort. Show your support for the bank as you also expect to get the same level of support in return. A beneficial and mutual banking relationship depends on integrity, honesty, candid discussions and openness.