If the only person you
know at your bank is your
relationship manager, you could be asking for trouble,
says Alan Zang.
“What if that relationship
manager elects to move on
and go to another bank or
moves out of town? All of a
sudden, your relationship
with the bank is tougher now
because you don’t know anyone else,” says Zang, senior
vice president and middle
market executive with
KeyCorp, which has about
4,700 business clients with
revenue from $5 million to
$250 million.
Just as you need to diversify your business to handle
economic ups and downs,
you also need to make sure
your relationship with your
bank is broad-based and has
several points of communication.
“Get to know more folks at
the bank than just your relationship manager,” Zang
says. “The relationship manager is still the critical component in the relationship.
But as the quarterback of the
relationship, they can help
you as a business owner
understand the organization
more broadly. Broaden your
knowledge of the organizational chart. It will help you
understand the bank’s business philosophies, and it will
help you understand how
they make decisions.”
One of the best ways to get
more in touch with your bank
is to regularly have your
banker visit your business so
he or she can see what it is
that you do every day.
“It’s very rare for meetings
to take place at the bank,” Zang says. “We’re at our
clients or prospects 95 percent of the time.”
That allows the bank representatives to see how you
operate, how you create
your product and how the
service you provide is delivered to your customers.
“Being on the shop floor, it
really makes the numbers
come to life,” Zang says. “It
helps us understand what we
need to do to help them. We
get out from the desk and
get with our customers.”
To help you make smart
decisions, your bank needs
to know about the good
things that are happening in
your business, but it also
needs to know about the
bad.
“Communicate both good
news and bad news as early as possible,” Zang says. “It
provides time for the bank
and the company to make
thoughtful decisions together.”
Good news, such as landing a huge contract or learning of an opportunity to buy
out your largest competitor,
can often require just as
much creativity and time as
the phone call that says
you’re going to miss your
sales target by 30 percent.
“It’s the same in any business relationship you would
have with any of your partners or any of your vendors,”
Zang says. “The more you
communicate early what
your plans are and where
you are going, the more you
can get the positive impact
of other folks’ thoughts to
help you get to where you
want to go.”
So how often should you
meet with your bank?
“Most banking relationships are such high-touch,
intensive relationships —
you’re lending money back
and forth — there’s always a
touch,” Zang says. “But from
a formal, ‘let’s sit down and
talk about my business and
where I’ve been and where I
want to go,’ quarterly is very
good for a company that is
moving pretty quickly.”
And when a big deal is
going down, you might want
to meet every other or every
third day for several weeks.
“A bank’s goal is to help
you grow your business,”
Zang says. “Knowing where
you are taking that business
helps the bank get you to
where you are trying to get
to.”
Grading your bank
One of the best ways to judge
the health of your company’s
relationship with your bank is on
your bank’s willingness to speak
with you.
“Are they willing to be a
sounding board?” says Alan
Zang, a senior vice president
and middle market executive
with KeyCorp. “Do they bring
you ideas? If they never come to
you with ideas or never have any
suggestions for you, it may not
be an unhealthy relationship, but
it’s certainly not a relationship
that is helping you grow.”
Zang believes that businesses
should have a basic list of service needs.
“If you are doing a lot of business overseas, does your bank
have the ability to help you with
foreign exchange transactions?”
Zang says. “Do they have the
ability to negotiate import/export
letters of credit for you? Or do
they have to go through someone else?”
The importance of your relationship with your bank is such
that price should not be the sole
determining factor.
“Is price important?” Zang
says. “Absolutely, it’s important.
But in today’s environment, in
particular, for a growing company, credit availability and structure and the bank’s ability to
respond to your needs quickly
and appropriately is far more
important than price alone.”
HOW TO REACH: KeyCorp., (216) 689-6300 or www.key.com
