Business owners often fall short of maximizing the potential of their banking relationship when they treat each interaction as a singular transaction.
“They’re looking to buy a piece of equipment, so they come to a bank to get a loan for just the amount needed for the purchase,” says Tim Flenner, Market Executive for Ohio at ERIEBANK. “But where business owners stand to get the most value is by having the conversation about why the equipment is necessary.”
Flenner believes that diving into questions about need and timelines can lead to answers that provide solutions across an enterprise.
“Banks want to focus on the full customer relationship,” he says. “When business owners lean into that, they can access far more value to help them both in their personal and business finances.”
Smart Business spoke with Flenner about leveraging the resources of a banking team to accomplish both business and personal financial goals.
What are business owners missing if they’re focused on one transaction?
When a business owner is only focused on one transaction, they’re missing an opportunity to dive deeper. For example, talking with someone in wealth and asset is an opportunity to explore planning options for personal retirement or taxes. Conversations with a private banker can help answer questions related to residential mortgages, home equity loans or consumer debt.
Experts are available to assist with treasury management needs, offering the right products to stay ahead of issues like fraud and better leverage technology to manage cash flow. Today’s most successful business owners leverage their entire banking team, from treasury and wealth management to community engagement. This helps fuel business growth and long-term success.
How can owners best leverage Their bank relationships?
Business owners often rely on a variety of financial professionals, each bringing specialized expertise to the table. While this depth of knowledge is valuable, it can sometimes result in fragmented conversations and a lack of clarity around the business’ overall financial health. By fostering relationships across their entire banking team, owners can ensure a more holistic, coordinated approach to their financial strategy. It helps to hold regular meetings, which could be quarterly, semi-annual, or annual, to get those partners together, inventory the areas of concern, set benchmarks and avoid duplication of efforts.
Proactive communication is important, as business owners often wear many hats and deal with competing priorities. A proactive banking relationship and consistent communication through the ups and downs of one’s business journey can make all the difference.
One of the worst things that can happen in a relationship between a business and a bank is the unexpected. If owners can maintain open communication, they can better leverage the resources of the relationship to address issues before it’s too late.
Additionally, these relationships help communication flow two ways. Bankers are tuned in to their professional network, keep a close eye on markets and the regulatory landscape, and see a range of issues across the industries in which they work. This enables them to provide businesses with insight into potential issues and new opportunities.
How might this help with an owner’s personal finances?
A business owner’s personal and professional life are interconnected. There is often a timeframe on retirement, which could mean selling a company or transitioning the business to the next generation. Exploring retirement projections and determining what life after business could look like is essential. The ability to leverage their bank’s resources can help business owners navigate through their options.
Failing to plan is a plan to fail. Working with a banking team to plan for the future, both professionally and personally, can lead to consistent strategies for success. Business owners who already have established banking relationships and financial plans in place are better able to plan and pivot as needed.
Ultimately, the business owner is best served when the banking team can come together to holistically address their needs and help prepare them for the future. ●
INSIGHTS Banking & Finance is brought to you by ERIEBANK.
