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.
This story Administrator ready to work first appeared on 苏州美甲学校.