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Bank Shopping for Your Business

Wednesday, November 20, 2013   By Mike Reddy


Where and how a small business owner chooses to manage their money can play an important part in the overall success of the company.

For clients with cash flow problems I make it a priority in my business coaching programmes to look at how bank services are being used.

So often, entrepreneurs disregard the importance of shopping around for the right bank for the business and end up paying for it in the long run.

Understanding what services your business requires is part of Small Business Banking 101, and must be an important part of any business coaching programme.

Common small business banking needs often include:

  • Basic Services- including credit cards, savings and cheque accounts
  • Lending Services- lines of credit, equipment and term-loans
  • Cash Management- wire transfers, merchant services, lockbox
  • Others- payroll, superannuation, insurance, import/export, etc.

If your bank cannot offer all of the services you need, shop around. You need what you need  and trying to operate without one or the other will be a painful process.

Talk about fees. Request a list of fee incurring services and make sure your accounting team are aware of them all. These add up!

Ask about fee bundling and compare amongst banks. Realise your bargaining power as a new client to the bank and negotiate.

Involve us in the process.  With my knowledge as a Chartered Accountant and with a great track record with business coaching, I not only understand the things that are important to banks, I have great relationships with a number of your bank's competitors!

View banking relationships as marriages- you are (with the best intentions) in this for the long haul and you want to air the dirty laundry before you make a commitment.

Go with a banker who understands your industry and has the foresight and experience to make predictions and stay ahead of the game.

Experience also leads to better crisis management and informed decision-making in heated situations.

Do the research and reach out to other bank customers if possible. Enquiring as to their sentiments regarding the handling of their accounts can shed some truthful light on an otherwise sales-pitchy-pitch by the bank.

Don’t be scared to let them know you are shopping around. Your business is valuable and should be viewed as such. And if you partner with a capable business coach the whole process is so much easier.

A big consideration is whether to go regional or national. There are pluses and minuses to each, weigh the benefits to your business, specifically.

Changing banks is an unwanted hassle so take time and don’t rush the process.

Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.