One of the most important relationships that any small
business owner has is with his or her banker. Michelle Field, Vice President of Business Banking at BMO Bank of Montreal notes that many businesses
only approach their banker when they have a specific need for a loan or
other financial services. She suggests that a better approach might be
to foster an ongoing relationship that can help nurture the business through
its many stages of development. There are many ways to develop that relationship
and to make sure your banker is familiar with your business. They include:
- Have a business
plan and discuss it with your banker regularly.
- Prepare a cash
flow budget and update it monthly.
- Prepare a list
of aged receivables and payables monthly; weekly or even daily if
you encounter unanticipated business challenges.
- Give your banker
regular business updates before significant changes occur:
- new large orders anticipated
- plans for expansion
- additions to premises.
- Proactively
share any business challenges or changes to your operations with your
banker:
- receivables lengthening
- inventory turns slowing down
- suppliers becoming more demanding
- increases in rent
- loss of contracts or orders.
- Have regular
meetings with your banker whether or not you are currently borrowing.
- Establish a
line of credit in anticipation of financial needs as determined
from your cash flow.
- Invite your
banker to your premises to find out more about your business your
customers and your staff.
- Always pay down
"bulges", term loans and special loans on time.
- If you are going
to be late with a loan payment, discuss the problem in advance and
suggest a solution.
- Use your banker
as an introduction to other professional sources of business support
and capital.
- Keep your own
personal finances in order. You don't have to use the same bank,
but it helps sometimes.
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