Most people get a physical checkup
at least once a year. Such things as
blood pressure and heart rate tell a lot about one’s health and the direction it is
going. Why not do the same with your business’s financial health as well?
Sue Zazon, president and CEO of
FirstMerit Bank in Columbus, says the idea
of a fiscal — rather than physical — checkup is not a new one. However, it is typically overlooked in the rush-rush to meet
other deadlines.
“Many business owners get regular medical or dental checkups,” Zazon says. “Yet,
when it comes to evaluating their relationship with their bank and bankers on a regular basis, they fail to do so. Periodic evaluations are a must for business owners.”
Smart Business spoke to Zazon about
why the right bank and banker are essential as a company attempts to achieve its
business goals.
Why are periodic evaluations with a bank
important?
Regular evaluations are important primarily because companies evolve constantly.
The banking industry is dynamic: consolidation and personnel turnover are constant within it. Therefore, it is important to
assess your ever-changing needs and how
your bank is meeting those needs.
As the business evolves, you need to evaluate if the bank can and/or will grow with
you. You should ask whether your banker
possesses the required skill set and
whether the bank has the credit appetite
and expertise to grow with your company
and industry.
Banks and bankers — which are separate
entities — need to be evaluated individually. You might discover that the banker may
be right for your needs, but the bank is not.
Or vice versa. You might have to change
one or the other — or both — in your own
best interest.
How do you know which bank to choose?
You should look at where the bank directs its money, energy and resources.
Does the bank have a focus on commercial
banking? If it does, what size companies
does it serve best? A bank that focuses on
very large institutional clients may not be
the right fit for small or middle-sized businesses. A bank that claims to specialize in
all sizes will be forced to spread resources
over a wide array of clientele.
It is absolutely a necessity to have a bank
that has accessible senior management
and other decision-makers who can help
process requests quickly, act as your advocate and respond consistently to credit
needs.
How do you evaluate a banker?
The level of commitment and interest in
the company is extremely important. A
banker should want to learn how your
company makes money and what is changing in the industry.
Personal attention is also a determining
factor. Is your banker ready to handle the
next problem — personally — if needed?
Does your banker understand your company’s financial goals and operations? Does it
know your key personnel?
Does the banker have the ability to act as a sounding board for your company? The
more experience a banker has, the more
likely he or she is able to help with unique
business situations. Your company may
have never had operations in a foreign
country, but the banker may have worked
with other companies that have.
Does your banker have strong decision-making skills? Can he or she make a decision quickly or have access to the people
who can?
All these factors determine the quality of
your banker and should be evaluated regularly.
Who else should be consulted?
At least once a year, all the individuals
that are part of your banking team should
review your relationship, just like an annual exam with specialists called in. Treasury
management is the most common specialty area in which banks provide expertise. A
private banker, international banker and
your retail branch manager may be others
who are part of your team.
Is it more important to have the right banker
or right bank?
Both are extremely important. You need
both. A company that does not have the
right banker is not going to get access to
the right people or the right services. A
banker can be extremely talented, but if
the bank can’t deliver when opportunities
arise, you need a different bank.
The right bank and banker deliver a relationship that is valued and provides benefits. Strong bank relationships provide the
ability for a company to take advantage of
opportunities, especially when there are
periodic checkups to keep the relationship
strong and healthy.
SUE ZAZON is president and CEO of FirstMerit Bank in
Columbus. Reach her at [email protected].