There’s a reason why people use ‘bank’ as a root word when describing dependability. A Bank was created to provide individuals with a place to store their earnings, as well as get financial support when they needed it. For small businesses, banks are often the first major institution they turn to for monetary advice and sustenance. Many banks even have SMB wings whose sole purpose is to assist and guide small business owners.
The importance of having financial support
But what does this financial support actually entail? And how can businesses ensure they get the support they need? To answer these questions, one must first examine the nature of a company’s relationship with the financial sector and how it changes over time.
Companies are organic entities that, like people, evolve over time. Just as children graduate from primary to secondary school as they grow and develop, businesses find that their banking needs alter over time. Therefore, in order to establish a truly beneficial relationship with a bank, businesses have to recognise that
- They have to choose a bank that’s right for their needs, and this isn’t necessarily the one with the highest profile. So taking the time to compare banks before choosing whom to bank with is critical.
- They might have to cultivate a relationship with more than one financial institution to have their varied needs met and to enjoy the fruits of doing business, with competing banks, at the same time.
- As with any partnership, it will take them time and effort to create and maintain a genuine rapport with their financial institution/s
Focus on how to choose the right bank for your needs
Some SMB owners realise early on that they appreciate a one-on-one dynamic with their bank, particularly if they require frequent access to cash or their deposits. In such situations, a local or regional bank with a large network of ATMs would be their best choice.
Banking with more than one financial institution
With regards to point B, some SMB entrepreneurs believe that one shouldn’t treat banks as partners, but as mere service providers. This way you can get them to start competing with each other to provide you with the best deals and bank offers.
Pursue a relationship with your banker
This last point is tremendously important. If it’s true that ‘you only get what you give’, then it is critically important that SMBs invest time and energy in fostering a partnership with their bank/banker. Keeping them abreast of changes in your business will help them advise you better. Sending documents like financial statements on time also helps build trust. Bankers are human beings—cooperative and reliable clients can encourage similar qualities in their financial service providers.
Support is a two way street that requires continuous give and take. It turns out that, in order to find financial institutions they can bank on in the long run, companies have to meet their banking partners half way.