The Conversations Small Business Owners Should be Having With Their Banker

There have been plenty of bumps in the road to recovery from the Great Recession. For many business owners, the financial partners they have relied on in the past are no longer there, victims of the changes that occurred in the banking landscape as institutions have consolidated and downsized in the name of efficiency and economies of scale.

For business owners in Northeast Wisconsin, that means they may no longer be dealing with a partner who had the depth of knowledge about the local economy or and understanding of their particular business. In some cases, decisions that used to be made locally have been taken offsite, and while there are plenty of products and resources to choose from, finding a partner who can dispense sage advice is at a premium.

It can be a frustrating experience.

Wisconsin’s community banks are working hard to fill this void and provide the small and medium businesses on Main Street with the help they need to keep their companies going until the recovery truly finds its stride. While community banks hold only 39 percent of the nation’s banking deposits, they make nearly 80 percent of all Small Business Administration (SBA) loans, making them critical for small business access to capital.

But it’s more than just access to loans. Community banks can provide the consultative partner many business owners are seeking who has both the knowledge of the local economy and a willingness to understand how their business works for better assessing risks providing more effective assistance.

For small and medium business owners, there are three conversations your banker should be regularly having with you that indicate they understand the challenges and needs you face:

Cash Flow
Cash flow is the lifeblood of any business, large or small. But the conversations need to be deeper than the cash you have on hand at any given point in time. You need a partner that can help you with meaningful projections that anticipate what you will spend and when. The discussion should also cover managing both your receivables and payables to make sure you are maximizing your resources. Of course, you should also be aware of the options that are available so that you can survive a shortfall.

Financial Services
The financial world seems to get more complex by the day, whether it’s new products or regulations, it can be a full time job to try and sort everything out – not really an option for someone who already has a job running their business. You should be getting regular advice on financial issue and tools available to you to help you better run your business, from online tools to manage the books to financial products that can protect your assets.

Fraud
National statistics show that small and medium businesses are 31 percent more likely to be targets of fraud than a large business. You should be having frank discussions about safeguards to protect your business not only from fraud by someone outside the business, but from within as well. Best practices and products to secure your financial information and sensitive documents should be a regular part of your conversations.

 If your regular conversations with your financial partner don’t involve these topics, it may be time to consider other options. A community bank, with it’s local expertise, relationships and decision making, can help you steer a better path for your business success.