This is the tenth in a continuing series of articles from Ron’s newest book, Getting to Yes with Your Banker, which includes 93 secrets you likely didn’t know about dealing with your banker. Presented in a Click and Clack format, from an entrepreneur’s and a lender’s perspective, the book is co-authored by Ron Sturgeon, a serial entrepreneur, and Greg Morse, founder and president of Worthington National Bank, a community bank with 4 locations throughout Tarrant County.
The book is packed with tips and advice about how to choose and get along with a banker, what your banker wants to see, and other valuable tips for both start ups and existing businesses from a banker’s and entrepreneur’s perspective. Today’s article discusses the importance of visibility in the community.
Banking is a Contact Sport
Having the right contacts is crucial in the business realm, and in banking, it’s one of the most important assets you can have. From the bankers’ standpoint, the more they put themselves out in the community, the more people they’re going to meet — and the better their chances are of converting acquaintances into customers.
As a businessperson, it’s important to be visible to the banker. So it stands to reason that if the banker is active in the community, a good way to stay on that banker’s radar screen is also to be involved in civic and social activities. This will pay off in many other ways; it’s likely that you will meet potential customers or other professionals who can boost your business.
See and Be Seen
Ron: It’s not who you know, it’s who knows you. In other words, I might not know a certain banker, but if I’m out in the community doing things, the banker might know who I am and would want to get my business.
Greg: That’s how I met you — you didn’t know me, but I knew who you were. From a banker’s standpoint, I want to be out in the community, meeting people. Then if you need to borrow money, you’re going to think of me, and I will probably know who you are. That’s going to help move the banking relationship forward.
Ron: Okay, so once you know who someone is, what kinds of things do you want to know about the customer?
Greg: I want to know that you’re confident, that you’re experienced in what you do and that your credit report is clean. I want to know that you’re a person of your word. It’s also a big plus for me if you’re active in the community. I’m a firm believer that your rent to society is your community service. So, if I see somebody being a troop leader, they are out there paying their rent to society. That factors into my decision.
Ron: That first meeting is really important. I call it a leg sniff because you’re sizing each other up. At that point, it’s less about how many widgets you’re going to produce and how much profit that’s going to make, and more about your character and how they feel about you. Bankers all have their own little hot spot and their own little things that help them determine on the leg sniff whether they like you or not. I cannot emphasize enough the importance of preparing for this meeting, and being buttoned up on the presentation. I always tell people they should send the presentation at least two days before the meeting. The banker isn’t interested in hearing a presentation about a bunch of boring (but necessary) stuff.
Ron: The meeting will be much more productive if he’s had time to review the materials, including a personal financial statement and a printout of a tri-bureau credit report (which will speak indirectly to your character, and keeps him from wondering or running a report, adding to your inquiries). You do monitor your credit report at least quarterly, right, including scores? But if you aren’t buttoned up and ready to discuss the material, you may lose all credibility. Bankers have an uncanny knack to go right to the one aspect of the presentation where you are weakest. You should consider presenting it to a knowledgeable friend, or present it to a bank you don’t expect to do business with, and after you get your teeth in your throat with a strong “No,” you will be ready for a banker you like and think you are most likely to do business with.
Greg: I always love a customer who knows their stuff, and having the presentation in advance lets me know they are serious, and doesn’t want to waste either of our time.
Ron: After they’ve created that relationship, customers need to be seen in the bank. You don’t even have to speak to the banker; they just need to see you.
Greg: It’s important to keep building that relationship. At our banks, we put the coffee machine in the back on purpose. I want the customer to have to walk all the way through our building and see every employee. And I tell every employee that I don’t want the customer to see the part of their hair; they’d better have their heads up and tell that customer “hello.” I want every administrative assistant and teller to say “hello” before that customer makes it to the back.
Ron: Customers need to understand that it’s all about the relationship.
Greg: It is. The customer needs to feel welcomed. But as a customer, you should want to go into the bank because you want the teller to tell everyone what a good customer or nice person you are. Then, when the doors close at five o’clock, everyone else is going to hear that from them. Those are the kinds of comments that get heard by your banker and they truly do factor into the kind of relationship you’re going to have with your bank.
Greg: If you come into my bank and you’re a jerk to my employees, that’s going to get back to me. And it could cost you the business, because why would I want to do business with someone my employees don’t like? We have plenty of people who want us to loan them money, so jerks aren’t the kind of people we’re going to do business with.
Next time, we will talk about the personal financial statement and how to prepare it properly.
Ron Sturgeon, founder of Mr. Mission Possible small business consulting, combines over 35 years of entrepreneurship with an extensive resume in consulting, speaking, and business writing, with 3 books published and 2 more expected in 2011. A business owner since age 17, Ron sold his chain of salvage yards to Ford Motor Company in 1999, and his innovations in database-driven direct marketing have been profiled in Inc. Magazine. After the repurchase of GreenLeaf Auto Recyclers from Ford and sale to Schnitzer Industries, Ron is now owner of the DFW Elite Auto suite of businesses and a successful real estate investor. As a consultant and peer benchmarking leader, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plain-spoken style, providing field-proven, high-profit best practices well ahead of the business news curve.
To inquire about peer benchmarking, consultations, expanding your business on the web or keynote speaking, contact Ron by calling 817-834-3625, by emailing rons@MrMissionPossible.com, by mailing 5940 Eden, Haltom City, TX 76117, or online at Mr. Mission Possible.