Building rapport with your bank manager

A great relationship with a bank manager is a very handy asset for a small business.Many SMEs have no choice but to communicate with their bank via call centers and websites. Others more fortunate qualify for a dedicated relationship manager. But too many see their relationship manager as someone they can’t live with but equally can’t live without. The reality is you need your relationship manager more than they need you so it’s in your interests to take the initiative to build a better relationship. Not only will this give you the best chance of the bank maintaining and increasing its support, it will also minimise the downside in the event your business doesn’t track so well.

So here are eight tips to help build a better relationship with your bank manager.

1. Perform. A good starting point is to perform in accordance with the terms and conditions you willingly agreed to when you signed the bank’s letter of offer. Reasonably enough, the bank expects you to honour those obligations. So you shouldn’t sign up for any deal with which you don’t believe you can readily comply. It’s a good idea to try to negotiate as much headroom as you can in bank limits, covenants and other terms and conditions.

2. Communicate. Sometimes things don’t go to plan and this is when open, timely and honest communication is most critical. Don’t ignore your banker – an uninformed banker is a major threat to your business. And don’t tell them what you think they want to hear – an ill-informed banker is an even bigger threat.

The best bet is to be straight up with the facts and communicate your plan to remedy the situation. If you don’t come up with a plan the bank believes, it is likely it will impose a solution on you.

Even when things are going well it’s still important to maintain regular communication. Email is a time-efficient way to communicate, but wherever possible meet or at the very least phone your banker to communicate key messages.

3. No surprises. If the communication channels are working, your banker shouldn’t get surprises. Bankers don’t like surprises. Your standing will suffer badly if you give your banker an unpleasant surprise. Bankers can even be taken aback by a good surprise with a reaction of “why didn’t I know about this before?”

4. Understand what your banker wants from the relationship and try to deliver it. Find out how their performance is measured and ask, “How can I help you achieve your goals?”  It may be that your banker would really value selling you more bank products (cross sales). Some bankers just don’t want grief caused by you by going over the overdraft limit without advance notice. If you understand what drives your banker, you are at least in a better position to deliver on this. Of course, the quid pro quo is that you want your banker to deliver on your needs too. So think about and communicate what you most value in the relationship.

5. Advocate. If you have a good relationship with your banker, show your appreciation. There is a number of ways to do this such as referring other people, giving them a LinkedIn recommendation and providing positive feedback to your banker’s boss and peers. Sometimes this can be done via a response to a customer satisfaction survey and if you give your banker a good wrap make sure he or she knows about it.

6. Negotiate hard but fair. Stand up to your bank managerwhen negotiating key terms and conditions including limits, security and price but don’t make the process so arduous and adversarial it gets them offside. You’ll find out if you push too hard on this.

7. Involve your accountant. Bankers gain comfort by knowing there is a trusted adviser in your corner although the adviser does need to have a sound grasp of your financial position. Bankers can tell very quickly how well an accountant really understands your business. If you think your accountant is not likely to be able to help with the bank this might indicate a need to look around for better accounting advice.

8. Don’t give up. One of the most common criticisms SMEs have of banks is that they change their relationship managers so frequently it’s nigh on impossible to build relationships. Some business owners believe banks move managers on quickly to ensure they don’t get too close to their customers but banks really do want and need their people to develop close relationships with customers in order to better understand and service their needs. When it comes to starting all over again and investing time and effort with a new manager, don’t give up and remember the rewards and risks are yours.

Neil Slonim is the founder of theBankDoctor苏州美甲学校.au an independent online advisory and resource service assisting SMEs develop better relationships with their banks.

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A Cronulla grand final victory? Heaven forbid

Bitter-sweet: Cronulla fans would have mixed emotions if the Sharks broke their 46-year premiership drought. Photo: Jane DysonFew will admit it, but even the most fanatical Cronulla supporters must be hoping this isn’t the season former prime minister Harold Holt finally emerges from the sea and knocks on their front door.

What would be a fairytale victory could quickly become a nightmare for the club and the game to rival that of North Sydney’s doomed move to Gosford in 2000 when the Bears went broke waiting for their new stadium to be built.

With the Australian Sports Anti-Doping Authority expected to hand down the findings of an eight-month investigation within days or weeks of the grand final, the last thing the NRL would want is to charge a group of players still celebrating their premiership triumph.

The Sharks aren’t alone in this situation, with current and former Manly players and coaching staff also being summonsed to interviews with ASADA, but Cronulla is the only NRL club accused of systematic doping.

Under WADA rules, any team can be banned if two or more players are found guilty of doping and ASADA has interviewed 10 members of the Sharks 2011 squad still at the club, along with former players now either playing elsewhere or no longer in the NRL.

Up to six Manly players and three ex-Sea Eagles have also been called to interviews with ASADA.

Former Cronulla directors feared the Sharks would be banned from the finals and wanted players to accept six-month bans at the start of the season rather than risk longer term damage to the club if the saga dragged on.

Yet no one now wants to consider what the final fall-out may be, with the Sharks officials preferring to focus on having secured a new sponsor and the NRL disputing comparisons between the Cronulla and Essendon cases.

While the AFL has headed off the possibility of Essendon winning the premiership by convincing the Bombers to accept a deal in which they are stood down from the play-offs, the NRL is gambling on the Sharks again failing to do so.

History would suggest the Sharks are unlikely victors as the club has not won a grand final since entering the competition in 1967, prompting coaching guru Jack Gibson to once famously declare that “waiting for Cronulla to win a premiership is like leaving the porch lamp on for Harold Holt” – the Australian prime minister who did not return from an early-morning swim in the same year the club was founded.

But the way the Sharks have performed under coach Shane Flanagan suggests the allegations have galvanised them.

Unlike the NRL, the AFL has conducted a joint investigation with ASADA and is therefore in possession of much more information about what allegedly occurred at Essendon.

As a result, the NRL is prepared to wait for the ASADA investigation to run its course and then determine the appropriate action.

By doing so it will be armed with the full facts, whereas the AFL stance ignores the possibility of the findings against Essendon being more serious than what was outlined in ASADA’s interim report and the penalties imposed therefore prove insufficient.

After all, ASADA has not yet ruled out charging numerous Bombers players with doping offences.

ASADA is also yet to interview Stephen Dank, the former Manly sports scientist at the centre of the allegations against both Cronulla and Essendon.

But unless the Sharks are cleared of any serious wrongdoing in 2011, the fall-out will be huge and having to strip a club of a premiership they had just won is merely the worst-case scenario for the NRL.

What if Cronulla don’t win but they make the grand final – denying another team such as South Sydney or Sydney Roosters the chance at premiership glory.

Or what of the teams the Sharks beat in the play-offs, and the club whose place they took after such a closely fought battle for places in the top eight that still has up to 13 teams in contention.

At Cronulla, there would also be frustration and angst for the players – particularly those who weren’t there in 2011 – and others at the club whose efforts this year were always destined to be in vain.

For long-suffering Sharks supporters, the heartache of finally celebrating a grand final win only to have it taken away from them may be worse than never winning one at all.

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Games record on hold for Fletcher

It appears Dustin Fletcher will have to play on into a remarkable 22nd season if he is to set a games record at Essendon.

A rare feel-good story for the Bombers has been put on hold after the club ruled out Fletcher for this Saturday night’s blockbuster against Richmond at the MCG.

The Bombers say Fletcher has sustained a hamstring injury at training while serving a two-game suspension for rough conduct.

With Essendon expected to be stripped of all premiership points in the fallout from the supplements scandal, and therefore eliminated from the finals race, Saturday night’s match was shaping as Fletcher’s last chance to set a club record of 379 games, a record he currently shares with Bombers legend Simon Madden on 378 matches.

But Essendon football operations manager Steve Alessio revealed on Monday that Fletcher had already been ruled out of contention for the Tigers game, so playing on in 2014 looms as the 38-year-old’s only option.

”Dustin last weekend hurt his hamstring during training, we tested it out during the week but he is going to miss this weekend’s game with a hamstring injury,” Alessio said.

”It is disappointing for Dustin and us that he won’t be out there for his 379th game.”

It’s understood Fletcher intends to play on and the Bombers are open, if not already committed, to offering him a contract for next year.

Fletcher’s manager Michael Quinlan, has also confirmed that he and the club will soon finalise a new one-year deal.

”I would love to be a part of the team next year but we will just have to see how the next few games go,” Fletcher said two weeks ago.

Meanwhile, St Kilda will give its own veteran, Justin Koschitzke, every chance to join fellow retirees Stephen Milne and Jason Blake in a farewell game against Fremantle at Etihad Stadium on Saturday.

Koschitzke’s troublesome calf needs to be given the green light from the medical staff before the key forward finds out whether he will be able to say goodbye to the club’s supporters in Melbourne, or whether he is resigned to the same fate possibly facing Fletcher.

Saints coach Scott Watters has made it clear Koschitzke, who has been marooned on 199 games, will be given a chance to reach the 200-game milestone as long as he can prove his fitness, and the Saints could yet name the 30-year-old on Thursday in a bid to give him right up until the last minute to show he can contribute.

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Publishing app set to make headlines

Liquid State team with revolutionary publishing app Photo: SuppliedA Brisbane-based print publisher has developed an app that has the potential to transform an industry already revolutionised by Apple, Google, Amazon and Microsoft.

Liquid State is a design application that converts print-ready content to mobile and tablet layouts with just five clicks, avoiding lengthy production processes that can be costly to multi-platform publishers.

And the app, built by a start-up of the same name, has just won a major federal government grant and funding from a group of local angel investors worth nearly $800,000.

Co-creator and company CEO Philip Andrews said the backing would enable his team to develop the second stage of their radical idea – a cloud-based layout program.

But it would take some time for people to grasp the full potential of his company’s idea, Mr Andrews said.

Speaking as someone with a background in independent publishing – Mr Andrewsis attached to several print magazine and book titles – the entrepreneur says his app will allow small companies to compete with big-name publishing brands.

“We’ve been working with Conde Nast in Germany where they currently have three people employed full-time who work for a month to get the German version of Wired magazine from print to digital,” he says. “This is because they have to re-create the layout of print content for different digital platforms, and then create different layouts for vertical displays, horizontal displays, mobile, and so on.

“Our app enables that process in five clicks and we could do it in a day.”

This is because Liquid State digital publishing gives users an interface that allows the direct upload of files from desktop publishing programs like InDesign to a unique cloud-based program which formats the content for multiple devices.

“Our system is based on the COPE principle – create once, publish everywhere,” he says.

“One of the problems with early movers in digital publishing – like Wired for example – was that when they launched their initial tablet versions, they established publishing values that were very similar to television values; every page had to have rich graphics, and videos, and widgets that enabled a level of engagement not before possible in print magazines.

“Very quickly they found this level of production wasn’t sustainable, so the second tier or round of digital publishing is about sustainable publishing – it’s more lightweight and there’s a desire to publish digital content that fits in with existing workloads.

“This makes it easier for smaller publishers to compete with big names at the point of sale – which thanks to the likes of Apple and Microsoft is nowadays the same point – if they can properly and effectively convert their content.”

Through Liquid State, they can, Mr Andrews said. And judging by recent funding success his two-year-old company has enjoyed, it appears as though there are more than a few who would see the product walk through the big-deal door.

Mr  Andrews said initiatives like the Commercialisation Australia grant program – which provided the bulk of his company’s development funding – was also helping to put Australia on the map when it comes to the global start-up community.

He said his hometown’s Digital Brisbane strategy – launched by Brisbane City Council in March – had also helped secure the support of other financial backers.

“It’s fantastic to see Australia really going out of its way to support start-ups,” Mr Andrews said.

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ASX’s game of two halves

ASX’s results for the year to June were about as flat as you can get, with underlying net profit just 1 per cent ahead of last year and guidance, and in line with the consensus forecast.

But looks can be deceiving and under the bonnet there were some interesting shifts. The most obvious was between the first and second halves, with profits falling 5 per cent in the first and then rising 7 per cent in the second thanks to increased market activity, but there was also a wide spread of performances from ASX’s various operating divisions.

The derivatives segment increased revenues by 5 per cent to $197 million, to keep its title as the group’s largest revenue generator, with 32 per cent of the total. The total number of contracts traded on ASX 24 rose 12 per cent to $116 million – driven particularly by interest rate futures and options activity in the second half – but higher large volume rebates meant a fall in average fees from $1.56 to $1.46.

A clearing service for “over-the-counter” (OTC) $A interest rate swaps was launched on July 1, 2013, and the company expects customers to sign up over the next six to 12 months. The idea is that it will enable participants to offset OTC exposures with existing futures positions to reduce the overall level of collateral they have to provide. How this is travelling will be a major focus for the AGM in Sydney on September 25 and for interim results on February 13.

The next biggest contributor, with 23 per cent of the total, was listing and issuer services, which increased revenue by 5 per cent to $140 million, helped by the full-year impact of fee increases. This was more than enough to make up for the very slow capital markets activity, with the lowest number of new listings since 2009 and least amount of money raised ($46 billion) since 2005.

Cash market turnaround

Cash market revenues fell 8 per cent to $115 million over the year, but this comprised an 18 per cent fall in the first half and a 4 per cent rise in the second. ASX’s market share of on-market traded value was 95 per cent, but this is now down to about 92 per cent, with Chi-X picking up the remainder.

The total billable value of ASX trades fell for the third year running, by 12 per cent to just over a trillion dollars, but the average fee per dollar traded rose from 1.05 to 1.1 basis points.

Information services revenues fell 8 per cent to $62 million, reflecting the lower equity market activity. But technical services revenues grew 10 per cent to $50 million, with the number of cabinets operated by clients in ASX’s Australian Liquidity Centre increasing from 76 to 117 over the year. Austraclear enjoyed another year of steady growth, with revenues rising 7 per cent to $39 million.

Costs rose 4 per cent during the year, mainly due to a 6 per cent rise in staff costs, with headcount rising from 505 to 529 to support new business initiatives, mostly in post-trade services, such as the new OTC clearing operations and Austraclear’s new ASX Collateral service.

Dividend lower

Earnings per share were flat at 196 cents, with no dilution from the rights issue since it took place so late in the year. However, dividends are affected, because they’re now spread over more shares. As a result, the final dividend fell 3 per cent to 82.3 cents (fully franked, ex date September 2), giving a total for the year of 170.2 cents, down 4 per cent.

While ASX faces a further erosion of its cash market revenues, it has long-term opportunities elsewhere, most particularly in OTC derivatives, and the market pick-up should eventually give a boost to fees from capital raisings in particular.

Consensus expectations are for the company to make earnings per share of about 200 cents in the current year, putting the stock on a relatively high price-earnings ratio of about 18. But the company makes most of its earnings as cash, enabling a payout ratio of 90 per cent and a fully franked dividend yield of 5.1 per cent. That looks like good value for such a quality company.

This article contains general investment advice only (under AFSL 282288).

Nathan Bell is the research director at Intelligent Investor Share Advisor. You can get access to a free trial to Share Adviser here, which includes instant access to four special reports full of local and overseas stock picks from some of Australia’s best fund managers, including Kerr Neilson, Erik Metanomski, Geoff Wilson and Chris Prunty. You can also follow Share Advisor on Twitter at @value-investing or on its Doddsville blog.

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