There was a book written in 1995 entitled The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do about It. The author premises that many businesses fail due to a lack of proper management of the company. This comes as a result of the owner being pulled in too many directions while trying to help his or her business truly succeed. At its core, the author suggests that more companies need someone who will work "on" the business instead of "in" the business.
So, what does this look like?
For many companies this means that the owner needs to find good partners to work with. Does the company have a trusted CPA advisor that he or she can turn to with accounting questions? Is there good legal advice that can help in situations whereby good counsel can ultimately save a company money through better contracts? And, does the company have a good relationship with a Business Banker?
What can your Business Banker do for you?
For starters, the Business Banker can provide a wealth of knowledge. Often, the lender has had experiences with others who may be in similar lines of business. As such, he or she can use the past to help the business owner by asking some tough questions. Tough questions, such as:
- How much more were your sales this year?
- Help me understand the growth in your inventory category on your balance sheet.
- Does that growth imply stale inventory, excess capacity or stocking up for incoming sales that are anticipated in the fourth quarter?
Business Bankers have access to a variety of resources as well that can help the company owner understand how his or her company compares to others in the same industry throughout the country with the same sales volumes or history. This comparative data can help drive additional analysis of process, procedures, and sales tactics, all good discussions to be having with your banker.
And that's not all your Business Banker can do for you. He or she can introduce you to other clients that might have synergistic opportunities. For example, if they have a body shop client, they might be able to introduce that client to all of their various insurance agents with whom they work. "I'd like to introduce you to Bob. He has a great body shop business and I know that he can help your clients with their car repair needs." The body shop client benefits, the insurance agent has another good source for taking care of his or her clients, and of course, the additional business ultimately benefits the bank's client which is good for the bank. When was the last time that you asked your Business Banker for a referral?
Finally, the Business Banker ultimately has his or her clients' interest at heart. If the relationship (and I use the word "relationship" intentionally here) is not beneficial to both parties, then ultimately, it is not good for either. It is in the bank's and the client's best interests to have a "mutual admiration society" between each other. When a bank's client is happy and feels good about the service and advice he or she is getting from the bank's lenders, then they win. And if the bank's client wins, then ultimately, the bank wins as well. Both should feel this is a great relationship and that they are mutually looking out for one another's interests.
So, as a business owner, do you have the right banking relationship to help you focus "on" and not "in" your business? If not, then ask the tough questions of your banker.
This blog is brought to you by Senior Vice President and Business Banking Manager, Chris Caldwell.