By all intents and purposes, 2009 may be
the most challenging year for business
owners since the Great Depression.
The changes that are underway in the financial service industry are historic and businesses have to learn how to grow as they face
these challenges. The more reliant you are on
a bank for capital, the more you need to be in
contact with your banker.
A banker should ask you how he or she
could assist you and your business in 2009.
This will initiate thoughtful conversation
about the goals and needs of the business in
the upcoming year, says Nicholas Browning,
president and CEO of FirstMerit Bank’s
Akron region.
“Programs should be designed to increase
efficiency, lower overall banking costs and
grow capital,” says Browning.
Smart Business spoke with Browning
about ways business owners should
approach 2009 and how to utilize their
banker in their approaches.
What should a banker be able to do for your
business?
Each company’s needs are different and a
banker’s services range greatly. Let your
banker be an asset to your team.
Here are a few suggestions:
- Brainstorm your 2009 business plan.
Your banker can help you start a business
plan and cover any unforeseen areas. - Play the devil’s advocate. Let your banker
use other businesses’ mistakes to help you.
Allowing your banker to identify gaps or
holes will make your business plan stronger. - Find a means to your plan. If you have
designed your business plan and identified
your goals, allow the banker to introduce
what banking programs or products will help
you reach your goals. - Bring value to the business. Your banker
should have a general understanding of your
industry and be able to help you keep an eye
on changes in your market.
What should a business owner look for in a
banker?
Typically, business owners do business
with individuals they know, like and trust.
You can’t know your banker unless you visit
with him or her often. Business plans will need to be adjusted throughout the year so a
banker should be there to provide revised
solutions and to introduce any new products
that can enhance a business.
Business owners should identify what qualities or services are important to their needs
and business. Certain qualities, such as
bankers who can offer sound advice, banks
with the newest products or banks with
plans to help your business grow, may be
necessary.
How do you recommend business owners
approach their 2009 business plan?
Business owners need to always be thinking of ways to retain their current profit and
grow it in the future. The SWOT approach
encourages business owners to evaluate
their strengths, weaknesses, opportunities
and threats. Today, some business owners
predict that their customers will request
fewer orders in 2009. With this reduction in
revenue, retention may be the biggest goal.
In 2009, business owners anticipate their
customers may pay them slower. Because of
the credit meltdown, lines of credit may be
limited. It is helpful to determine how restrictions on consumers’ credit may affect your
business and plan accordingly.
Are there any approaches to running a business you recommend business owners take
in 2009?
Cut costs overall. This is the year to take the
time to evaluate every line item. If you are
spending money, it should add value to your
company. If you spend a dollar, one should
question if it was necessary to spend the dollar and, if deemed necessary, is there any way
that cost can be reduced to 99 cents?
Business owners should take advantage of
the products and services the bank offers to
meet the needs of increased efficiency. Some
services may cost you money initially, but
they can save you in the long run. Products
such as remote deposit capture allow you to
deposit customer checks from your office.
This means you are not wasting the time to
visit the bank, the money it costs to get you to
the bank and the loss of productivity.
In light of the financial insecurity in 2008, are
there steps business owners can take to
increase financial security in 2009?
There are four steps to take:
- Have immediate access to your capital. It
is important that business owners be vigilant
of the soundness and security of their financial institution. You need to know that you
can visit your bank at any point and access all
of your capital. Ask your bank if it intends to
provide you with the same access to credit
and capital as it has in the past. - Diversify. Even if you are happy with
your bank, it is a good idea to know other
banks that may be able to handle the needs of
your business should you ever need another
option. Have a backup plan. - Research. Know the background and
future outlook for your bank, vendors and
customers. They all play a role in the future
success of your business so you need to
know how they can weather the storm. - Know more people at your bank than
your banker. You should know your relationship manager, his or her boss and his or her
boss’s boss. Thus, if your banker leaves, there
is more than one person who has knowledge
of your company and its needs.
NICHOLAS BROWNING is president and CEO of FirstMerit Bank’s Akron region. Reach him at [email protected] or
(330) 384-7807.
