Kim Carrasquillo

Monday, 26 October 2009 20:00

Firm commitment

Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.

During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.

“Legal advice can help you both where you are already doing things and where you’re not,” says Laura E. Ellsworth, partner-in-charge, Pittsburgh office, Jones Day. “If you’re entering into some kind of legal relationship with someone, talking to a lawyer in advance can help with terms and conditions.”

Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner — and his or her fee as an investment in your company — you can capitalize on your lawyer’s legal training and experience.

Develop an effective relationship

By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.

“In any situation the lawyer is going to want to have the facts,” says Daniel I. Booker, partner, Reed Smith LLP. “Who is involved? Who did what to whom? What are the key documents?”

While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.

“You want to bring in your lawyer when the two of you can decide where you want to drive this train,” Ellsworth says. “If you bring in your lawyer when you’re putting the train on the tracks, you figure how to position it and where the switches are. That’s a lot better than calling your lawyers after it has run off the tracks and you’re trying to force this multi-ton thing back on the tracks.”

The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.

If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him or her come prepared to address the issue. Ensuring that the appropriate people are in the meeting or available on-call can avoid a costly follow-up.

“Come into the meeting with clear business objectives and be prepared to explain them to the lawyers,” Ellsworth says.

Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.

If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss fee structures.

“Most lawyers will, in order to get a client to come to know them, agree to a flat fee,” Booker says.

The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.

“There are situations where no one, in advance, can predict how much time and effort is going to be required,” Ellsworth says. “You don’t want to work yourself into a billable corner, when a law firm is going to have a problem throwing the very best people at your matter to give you the best service.”

No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.

“Part of the chemistry with the lawyer has got to be that the business leader and the lawyer are both willing to be upfront and open to talk about fees,” Booker says.

When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.

“The most important thing a company can do to managing its legal risk is for the business leader to find a legal adviser who he trusts, who he can bounce things off of, and won’t get charged an arm and a leg,” Booker says.

Find the right fit

Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.

“You need to think about what is the best outcome for your company, and then devise the relationship with that lawyer that is going to achieve that objective,” Ellsworth says.

Finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful.

Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.

“Find an existing client of that lawyer or firm who either has your issues or works for a company like yours,” Ellsworth says. “Then pick up the phone and ask them what they think. That kind of conversation is worth a thousand words of law firm brochures.”

Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.

“The way a lawyer really wins points with a client is just to tell a client one time that we’re not the best people in this matter,” Booker says. “If you find a lawyer willing to tell you that, you should develop that relationship. Go back to him the next time you need general advice.”

Monday, 26 October 2009 20:00

Firm commitment

Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.

During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.

“We can, as the company’s trusted adviser, help the leaders think about what their growth will look like, how they should be thinking about their future legal needs and help them avoid costly litigation later,” says Gary Singer, co-chairman, transactions department, O’Melveny & Myers LLP.

Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner — and his or her fee as an investment in your company — you can capitalize on your lawyer’s legal training and experience.

Develop an effective relationship

By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.

“We welcome a chance to confer with clients, to serve as their sounding board, and we don’t necessarily charge for that day-to-day or minute-to-minute,” Singer says.

While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.

“There are things you need to do to be prepared for the fact that California is very litigious and employers are often targets,” says Charles L. Harris, managing partner of Orange County office, Lewis Brisbois Bisgaard & Smith LLP. “There are things you can do to prevent lawsuits from being brought against your company, and if they are brought, to enhance your position in the lawsuit.”

The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.

If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him or her come prepared to address the issue. Ensuring that the appropriate people are in the meeting or available on-call can avoid a costly follow-up.

“Probably the most important is for them, before contacting legal counsel, to really think about the questions that they have for counsel,” Singer says. “And to discuss the questions and issues among executives or businesspeople at the company and make sure everyone agrees that these are the right legal questions for the law firm.”

Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.

If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss fee structures.

“We are open to alternative fee arrangements that, in effect, reward our efficiency and, as importantly, make the legal spending more predictable for clients,” Singer says. “The goal is to make sure our clients’ interests and those of our firm are aligned.”

The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.

No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.

“There are all sorts of ways to manage both the expectations and the resulting billing, which are appropriate to discuss at the outset of a relationship,” Harris says.

When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.

Find the right fit

Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.

“It’s important that the attorneys know going in what the client’s expectations are,” Harris says. “Asking hard questions gets the good answers, and the only right answer is the answer that everybody agrees upon.”

Finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful. Also consider the lawyer’s role in the community.

“With our electronic communication, there is lot of opportunity to learn about law firms on the Internet,” Harris says. “Ask around and schedule multiple interviews and interview more than one firm. Many times, personalities are a better fit with one firm as opposed to another.”

Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.

Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.

“Any firm that is interested in earning your business would be happy to sit down with you for a short time and discuss their capabilities and the issues facing the client and be prepared to present a proposal on how they can service that client in a cost-efficient manner,” Harris says.

Monday, 26 October 2009 20:00

Firm commitment

Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.

During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.

“A good lawyer, thinking about long-term relationships, should be sympathetic to the client’s need to control cost and maximize the value of legal service,” says Bill Kleinman, partner in the corporate practice group, Haynes and Boone LLP.

Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner — and his or her fee as an investment in your company — you can capitalize on your lawyer’s legal training and experience.

Develop an effective relationship

By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.

“A good lawyer is going to want to know as much about the company and the business and the challenges the business faces as possible; that helps the lawyer do his job,” Kleinman says. “A company should pull together some background materials about the company generally … and talk about the key challenges and opportunities that a company is facing.”

While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.

“It would be best to get a good counsel at the beginning and determine what’s necessary for their business and periodically get with counsel to review what’s going on and where there might be a need for preventive legal advice as well as actual things that are occurring or transactions that give rise to legal issues,” says Thomas R. Helfand, shareholder and chair of the taxation, employee benefits and private business practice group, Winstead PC.

The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.

“The place businesses should not try to do it themselves is anything with litigation or the threat of litigation,” Kleinman says. “Once there is a threat of litigation, anything that passes back and forth between the parties will become evidence.”

If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him come prepared to address the issue. Ensuring that the appropriate people are in the meeting, or available on-call, can avoid a costly follow-up.

“The best thing would be to give the lawyer as much information as possible ahead of time so that the lawyer can actually have at the meeting the particular people from an expertise standpoint necessary for the meeting,” Helfand says.

Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.

If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss fee structures.

The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.

“Most of the time, clients focus only on the hours and they don’t focus on the rates and the staffing associated with those hours,” Helfand says. “Efficiency is a function of the amount of time, who is doing it and their rate.”

No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.

“The best suggestion is to try to establish a target number of hours with the lawyer at the outset of the project,” says Kleinman. “A businessperson might expect that a project might take 100 hours but might say to the lawyer, ‘Spend 15 hours, and then let’s talk about where we are and what you see.’”

When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.

“A lawyer should be a partner, recognizing that there are times when minimizing cost is the most important objective for a company, like in a down economy,” Kleinman says.

Find the right fit

Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.

“Think about what your business needs in a lawyer,” Kleinman says. “Businesses are different; lawyers are different. Some people want simple, clean, practical advice. Other businesspeople want complete protection against a variety of risks.”

Finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful.

Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.

Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.

“Once you get some names, you don’t just hire them,” Helfand says. “You need to talk to them, visit them and develop a trusting relationship.”

Monday, 26 October 2009 20:00

Firm commitment

Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.

During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.

“When a business owner sees a potential legal problem, reaching out sooner rather than later is much more cost effective for the business owner,” says Stephen W. Riddell, managing partner of Atlanta office, Troutman Sanders LLP.

Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner — and his or her fee as an investment in your company — you can capitalize on your lawyer’s legal training and experience.

Develop an effective relationship

By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.

“It’s more preventative medicine; the lawyers can help you with the day-to-day policies and products in play to help you avoid stupid litigation,” says George C. Gaskin, partner, Business Transactions, Corporate & Taxation Department, Taylor English Duma LLP.

While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.

“Many times, problems that fester and bounce along without a lawyer taking a look get a lot more complicated and a lot more difficult to solve or resolve because a lawyer hasn’t been brought in,” Riddell says.

The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.

“A lot of companies are involved with layoffs right now,” Gaskin says. “They would want to consult their lawyer to make sure they’re doing it properly and following the procedures … and making sure it’s done in a way that they are not going to face a lawsuit.”

If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him or her come prepared to address the issue. Ensuring that the appropriate people are in the meeting or available on-call can avoid a costly follow-up.

Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.

If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss fee structures.

“We can help and price it on a flat-fee basis,” Riddell says. “It saves them time and money and gives them what they need.”

The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.

“The most efficient lawyer in a big expensive firm is a senior associate/junior partner,” Gaskin says. “Their rate is not quite out of control yet, and they are the most efficient people you’ll get for the money.”

No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.

When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.

“In today’s legal and economic times, we need to help companies solve problems at a very reasonable rate,” Gaskin says. “Companies don’t have money to throw around and they don’t like throwing money at legal problems.”

Find the right fit

Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.

“If you’ve got a lawyer that’s fairly aggressive meeting with a client that’s very conservative, that’s not going to be a good fit,” Riddell says. “A fit where you’ve got someone that you’re comfortable with personally and professionally can enhance the relationship.”

Finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful. Also consider the lawyer’s role in the area.

Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.

“The key is trying to find someone who practices in their industry,” Riddell says. “That industry expertise can be very, very valuable. If they have a lawyer that understands their industry, that can be helpful to the company.”

Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.

“If you get some legal advice and good policies and procedures in place, that can save you money,” Riddell says.

Friday, 25 September 2009 20:00

Space exploration

Amid the rain clouds of today’s market, there may be a silver lining. With commercial real estate tanking, savvy CEOs can take advantage of the downturn and finally cash in on the soaked economy.

Second quarter national commercial real estate prices dropped 18.1 percent compared to the previous quarter, according to a study by the Massachusetts Institute of Technology Center for Real Estate. The plunge sunk the price index 39.2 percent below its peak in 2007. These falls add up to tremendous opportunity for space users.

“It’s a terrific opportunity,” says Jeff Manley, managing principal, CresaPartners LLC. “Talk about the perfect storm for people who are users of commercial real estate.”

Slashing real estate overhead — often a company’s second-largest cost — can provide a noticeable return on your bottom line. Whether you’re already pounding the pavement looking for a new pad or you haven’t yet evaluated your space, it’s worth exploring your prospects as the market continues to decline.

Decide to buy or lease

Before you go running into the marketplace, take time to analyze your current needs and future projections. There are deals for buyers and tenants, and a seasoned real estate expert can help you weigh your options.

If your company is changing — either growing or downsizing — a lease offers valuable flexibility.

“So, we now have a unique opportunity to help companies weather the storm if they are in the market, because we have now opportunity for historically low rental rates and concessions from landlords willing to do virtually anything to get tenants,” Manley says.

Conversely, if you are well established now may be the time to buy — provided you have a large amount of capital.

“There is an anticipated tsunami of bad commercial real estate debt that will be coming back to the market probably in six to 12 months,” Manley says. “People who are positioned with cash are going to kill it.”

Even if you aren’t sitting on a mattress stuffed with cash, you may still find a deal. Subleases are flooding the market, and they offer a unique opportunity for the right kind of operation. Subleasing may benefit a younger company or one with less-than-stellar credit. However, the perks aren’t without risks. Keep in mind that subleasing could mean taking on someone else’s problems, such as a shaky landlord or hidden costs.

If you find yourself with extra space that you’re thinking of subleasing for additional income, keep in mind that you will likely suffer the wrath of the market and may have to accept rates that are lower than your own rent. Still, in a pinch, many CEOs may decide that some rental income is better than none.

Every market is unique, and cost can vary significantly between downtown and suburban locations. You may find an urban steal, but be mindful of other aspects, such as parking and access to transportation.

Renegotiate to save

If you are comfortable in your currently leased space, you may have one of the best advantages in today’s environment. Fearing empty buildings, many landlords are willing to renegotiate a lower rate in exchange for additional years on your term. The process, known as “blend and extend,” is best for renters with about two years left in their lease, but some owners will talk with more time remaining — especially if the property has a mortgage coming due in the next few years. Having solid tenants in place makes the owner more attractive to lenders, and that can give you an upper hand in negotiations.

“The challenge for the tenant in this economic environment is to understand where you’re at now versus where you’re going to be in two to four years,” says Kurt Strasmann, executive vice president and managing director, Grubb & Ellis Co.

Even with the scales tipped to the tenant, it’s unlikely the proprietor will reduce rates without you first doing some legwork. It’s wise to have your financial statements ready and be willing to talk about your long-term plan on the property.

Before you approach the owner, think about things from his or her perspective and be prepared to appeal to the owner’s needs, rather than pleading your own case for cheaper rent.

Your current occupancy gives you leverage for a contract that benefits both you and the titleholder. Still, should a landlord shoot down your proposal, you likely have options down the street.

Consider more than cost

With the uncertainty of how long low rates will hang around, you may be tempted to commit to the offer with the lowest price tag. However, there are factors that can inflate your actual cost. Utility, maintenance and improvement fees can hide within a hastily signed document.

A careful review with a real estate professional can weed out deals that are too good to be true and help you bargain for favorable terms. For example, a clause that ties rent increases to tangible market figures can avoid exaggerated rate spikes. You can also work to include exit or expansion options.

“Some of the variables to consider when analyzing a new lease include cost, flow-through obligations, taxes and maintenance,” says Martin Pupil, senior managing director, Colliers International Orange County. “I strongly recommend to companies that they get their attorneys involved and partnered with their broker to find out how they can properly use their leverage with a landlord to get a better deal.”

Many property owners are struggling financially, so it is imperative that you research the stability of the landlord. If the building goes into foreclosure, you may be liable for additional costs or be shuffled around by a new owner.

“When a tenant is moving into a building, it’s like a marriage,” Strasmann says. “You’ve got to feel comfortable with the ownership and the ownership has to feel comfortable with the tenant. You’ve got to make sure they have a good reputation and they run their properties with quality and they have a good reputation in the market.”

Open layouts and flexible equipment can squeeze more productivity from fewer square feet, and utilizing new technology and energy-efficient fixtures can trim your overall expenses. Some companies are implementing strategies, such as hoteling, that don’t strap employees to a certain workspace.

And don’t downplay the importance of location. Though you may be able to get deep discounts in a less desirable area, you need a place that employees and customers enjoy. Favorable factors, such as ample natural lighting, can increase productivity and add to your bottom line.

Also, consider the benefits of moving across city lines, as business-hungry municipalities may offer tax incentives. But before you pack up, calculate the total charge of such a venture. A low rate may be enticing, but the cost to resettle may outweigh the discount.

Overall, there are savings in real estate, as long as you take the time to evaluate your company’s long-term needs.

“Companies have to understand their needs and their goals in order to best maximize their space and operate at their most efficient,” Pupil says.

Friday, 25 September 2009 20:00

Space exploration

Amid the rain clouds of today’s market, there may be a silver lining. With commercial real estate tanking, savvy CEOs can take advantage of the perfect storm and finally cash in on the soaked economy.

Second quarter national commercial real estate prices dropped 18.1 percent compared to the previous quarter, according to a study by the Massachusetts Institute of Technology Center for Real Estate. The plunge sunk the price index 39.2 percent below its peak in 2007. These falls add up to tremendous opportunity for space users.

“It’s all about the access to capital and the ability for landlords to make new deals or renew deals and do things that are germane to keeping a building occupied and full and viable,” says James C. Becker, market director for Michigan, Ohio and Minnesota, Jones Lang LaSalle.

Slashing real estate overhead — often a company’s second-largest cost — can provide a noticeable return on your bottom line. Whether you’re already pounding the pavement looking for a new pad or you haven’t yet evaluated your space, it’s worth exploring your prospects as the market continues to decline.

Decide to buy or lease

Before you go running into the marketplace, take time to analyze your current needs and future projections. There are deals for buyers and tenants, and a seasoned real estate expert can help you weigh your options.

If your company is changing — either growing or downsizing — a lease offers valuable flexibility. If you have a good track record as a solid tenant that pays rent on time, you are positioned to make a great deal.

Conversely, if you are well established, now may be the time to buy, provided you have a large amount of capital.

“If you’ve got cash and are able to purchase, it’s been decades since purchases have looked this attractive,” says Fred Liesveld, executive vice president and managing director of Detroit office, Grubb & Ellis Co.

Even if you aren’t sitting on a mattress stuffed with cash, you may still find a deal. Subleases are flooding the market, and they offer a unique opportunity for the right kind of operation. Subleasing may benefit a younger company or one with less-than-stellar credit. However, the perks aren’t without risks. Keep in mind that subleasing could mean taking on someone else’s problems, such as a shaky landlord or hidden costs.

If you find yourself with extra space that you’re thinking of subleasing for additional income, keep in mind that you will likely suffer the wrath of the market and may have to accept rates that are lower than your own rent. Still, in a pinch, many CEOs may decide that some rental income is better than none.

Every market is unique, and cost can vary significantly between downtown and suburban locations. You may find an urban steal, but be mindful of other aspects, such as parking and access to transportation.

Renegotiate to save

If you are comfortable in your currently leased space, you may have one of the best advantages in today’s environment. Fearing empty buildings, many landlords are willing to renegotiate a lower rate in exchange for additional years on your term. The process, known as “blend and extend,” is best for renters with about two years left in their lease, but some owners will talk with more time remaining — especially if the property has a mortgage coming due in the next few years. Having solid tenants in place makes the owner more attractive to lenders, and that can give you an upper hand in negotiations.

Even with the scales tipped to the tenant, it’s unlikely the proprietor will reduce rates without you first doing some legwork.

“Be prepared,” Becker says. “Make sure your adviser is doing all the due diligence necessary so you have answers and you understand what the points of leverage are before you go to that meeting.”

Before you approach the owner, think about things from his or her perspective and be prepared to appeal to the owner’s needs, rather than pleading your own case for cheaper rent. Your current occupancy gives you leverage for a contract that benefits both you and the titleholder. Still, should a landlord shoot down your proposal, you likely have options down the street.

Consider more than cost

With the uncertainty of how long low rates will hang around, you may be tempted to commit to the offer with the lowest price tag. However, there are factors that can inflate your actual cost. Utility, maintenance and improvement fees can hide within a hastily signed document.

A careful review with a real estate professional can weed out deals that are too good to be true and help you bargain for favorable terms. For example, a clause that ties rent increases to tangible market figures can avoid exaggerated rate spikes. You can also work to include exit or expansion options.

“Be flexible in terms of what the outcome may be,” Becker says. “You may find value in some other things related to your occupancy that aren’t monetarily related.”

Many property owners are struggling financially, so it is imperative that you research the stability of the landlord. If the building goes into foreclosure, you may be liable for additional costs or be shuffled around by a new owner.

Open layouts and flexible equipment can squeeze more productivity from fewer square feet, and utilizing new technology and energy-efficient fixtures can trim your overall expenses. Some companies are implementing strategies, such as hoteling, that don’t strap employees to a certain workspace.

And don’t downplay the importance of location. Though you may be able to get deep discounts in a less desirable area, you need a place that employees and customers enjoy. Favorable factors, such as ample natural lighting, can increase productivity and add to your bottom line.

Also, consider the benefits of moving across city lines, as business-hungry municipalities may offer tax incentives. But before you pack up, calculate the total charge of such a venture. A low rate may be enticing, but the cost to resettle may outweigh the discount.

“They should be looking at ways to make use of the incentives that are being offered,” Liesveld says. “Make sure the incentives offered match up to the needs.”

Overall, there are savings in real estate, as long as you take the time to evaluate your company’s long-term needs.

“Many of the businesses in this area have changed or evolved greatly over the last five years and should take a look at how they use space and determine if they are using it to its best use,” Liesveld says.

Friday, 25 September 2009 20:00

Space exploration

Amid the rain clouds of today’s market, there may be a silver lining. With commercial real estate tanking, savvy CEOs can take advantage of the perfect storm and finally cash in on the soaked economy.

Second quarter national commercial real estate prices dropped 18.1 percent compared to the previous quarter, according to a study by the Massachusetts Institute of Technology Center for Real Estate. The plunge sunk the price index 39.2 percent below its peak in 2007. These falls add up to tremendous opportunity for space users.

“There is clearly an opportunity to decrease your overall cost of occupancy,” says John Gates, president of Brokerage Americas, Jones Lang LaSalle. “It’s a soft environment, and tenants can negotiate provisions that they cannot get in a more stable environment.”

Slashing real estate overhead — often a company’s second-largest cost — can provide a noticeable return on your bottom line. Whether you’re already pounding the pavement looking for a new pad or you haven’t yet evaluated your space, it’s worth exploring your prospects as the market continues to decline.

Decide to buy or lease

Before you go running into the marketplace, take time to analyze your current needs and future projections. There are deals for buyers and tenants, and a seasoned real estate expert can help you weigh your options.

If your company is changing — either growing or downsizing — a lease offers valuable flexibility.

“The vast majority of opportunity is on the tenant’s side of the table,” Gates says. “Prices have declined quite a bit and are still declining.”

Conversely, if you are well established now may be the time to buy — provided you have a large amount of capital.

“If it’s a pretty stable business and they don’t see much change in their future, it might make sense to buy, and there are very good buying opportunities out there,” says Moody Younger, executive managing director, Texas, Grubb & Ellis Co.

Even if you aren’t sitting on a mattress stuffed with cash, you may still find a deal. Subleases are flooding the market, and they offer a unique opportunity for the right kind of operation. Subleasing may benefit a younger company or one with less-than-stellar credit. However, the perks aren’t without risks. Keep in mind that subleasing could mean taking on someone else’s problems, such as a shaky landlord or hidden costs.

If you find yourself with extra space that you’re thinking of subleasing for additional income, keep in mind that you will likely suffer the wrath of the market and may have to accept rates that are lower than your own rent. Still, in a pinch, many CEOs may decide that some rental income is better than none.

Every market is unique, and cost can vary significantly between downtown and suburban locations. You may find an urban steal, but be mindful of other aspects, such as parking and access to transportation.

Renegotiate to save

If you are comfortable in your currently leased space, you may have one of the best advantages in today’s environment. Fearing empty buildings, many landlords are willing to renegotiate a lower rate in exchange for additional years on your term. The process, known as “blend and extend,” is best for renters with about two years left in their lease, but some owners will talk with more time remaining — especially if the property has a mortgage coming due in the next few years. Having solid tenants in place makes the owner more attractive to lenders, and that can give you an upper hand in negotiations.

Even with the scales tipped to the tenant, it’s unlikely the proprietor will reduce rates without you first doing some legwork. It’s wise to have your financial statements ready and be willing to talk about your long-term plan on the property.

Before you approach the owner, think about things from his or her perspective and be prepared to appeal to the owner’s needs, rather than pleading your own case for cheaper rent.

Your current occupancy gives you leverage for a contract that benefits both you and the titleholder. Still, should a landlord shoot down your proposal, you likely have options down the street.

Consider more than cost

With the uncertainty of how long low rates will hang around, you may be tempted to commit to the offer with the lowest price tag. However, there are factors that can inflate your actual cost. Utility, maintenance and improvement fees can hide within a hastily signed document.

“The single best advice I can give is hire someone who has done it and understands the spectrum that we’re looking at and can gauge and represent your interest vigorously,” Gates says.

A careful review with a real estate professional can weed out deals that are too good to be true and help you bargain for favorable terms. For example, a clause that ties rent increases to tangible market figures can avoid exaggerated rate spikes. You can also work to include exit or expansion options.

Many property owners are struggling financially, so it is imperative that you research the stability of the landlord. If the building goes into foreclosure, you may be liable for additional costs or be shuffled around by a new owner.

Open layouts and flexible equipment can squeeze more productivity from fewer square feet, and utilizing new technology and energy-efficient fixtures can trim your overall expenses. Some companies are implementing strategies, such as hoteling, that don’t strap employees to a certain workspace.

“Not following a traditional rigid use of space is something that can gain more density,” says Ted Fredericks, president and COO, Mohr Partners Inc. “Open flow with cubicles can create clustering, where teams can work with each other and can use walkways and aisleways as meeting areas without having to create separate meeting areas.”

And don’t downplay the importance of location. Though you may be able to get deep discounts in a less desirable area, you need a place that employees and customers enjoy.

“They need to take into mind their work force and is their location going to able them to attract a stronger employee than their competition can attract?” Younger says.

Favorable factors, such as ample natural lighting, can increase productivity and add to your bottom line.

Also, consider the benefits of moving across city lines, as business-hungry municipalities may offer tax incentives. But before you pack up, calculate the total charge of such a venture. A low rate may be enticing, but the cost to resettle may outweigh the discount.

Overall, there are savings in real estate, as long as you take the time to evaluate your company’s long-term needs.

“It doesn’t cost you anything to take a look and get engaged and see if you can make something happen that works to your business’s advantage,” Gates says.

Special Report

Dallas

Friday, 25 September 2009 20:00

Space exploration

Amid the rain clouds of today’s market, there may be a silver lining. With commercial real estate tanking, savvy CEOs can take advantage of the perfect storm and finally cash in on the soaked economy.

Second quarter national commercial real estate prices dropped 18.1 percent compared to the previous quarter, according to a study by the Massachusetts Institute of Technology Center for Real Estate. The plunge sunk the price index 39.2 percent below its peak in 2007. These falls add up to tremendous opportunity for space users.

“For the most part, the tenant or buyer is in the driver’s seat with declining values and higher vacancies,” says Alan Piker, managing principal of the Cincinnati office, CresaPartners LLC. “So, the opportunity for the user is significantly better than it’s been in recent years.”

Slashing real estate overhead — often a company’s second-largest cost — can provide a noticeable return on your bottom line. Whether you’re already pounding the pavement looking for a new pad or you haven’t yet evaluated your space, it’s worth exploring your prospects as the market continues to decline.

Decide to buy or lease

Before you go running into the marketplace, take time to analyze your current needs and future projections. There are deals for buyers and tenants, and a seasoned real estate expert can help you weigh your options.

If your company is changing — either growing or downsizing — a lease offers valuable flexibility.

“It’s a tenant’s market,” says Andrew Kahn, a senior office associate at NAI Bergman, a Cincinnati-based real estate firm. “You can get very favorable lease terms right now if you have a good track record as an existing company that doesn’t late-pay, stays on top of their bills and is managing their business well.”

Conversely, if you are well established, now may be the time to buy — provided you have a large amount of capital.

“This market is an opportunity for those companies, people or organizations that have cash,” says Albert Bolter, real estate market analyst at Colliers Abood Wood-Fay in Miami. “They’re king because they can come in and get these properties and assets at reduced prices or markdowns.”

Even if you aren’t sitting on a mattress stuffed with cash, you may still find a deal. Subleases are flooding the market, and they offer a unique opportunity for the right kind of operation. Subleasing may benefit a younger company or one with less-than-stellar credit. However, the perks aren’t without risks. Keep in mind that subleasing could mean taking on someone else’s problems, such as a shaky landlord or hidden costs.

If you find yourself with extra space that you’re thinking of subleasing for additional income, keep in mind that you will likely suffer the wrath of the market and may have to accept rates that are lower than your own rent. Still, in a pinch, many CEOs may decide that some rental income is better than none.

Every market is unique, and cost can vary significantly between downtown and suburban locations. You may find an urban steal, but be mindful of other aspects, such as parking and access to transportation.

Renegotiate to save

If you are comfortable in your currently leased space, you may have one of the best advantages in today’s environment. Fearing empty buildings, many landlords are willing to renegotiate a lower rate in exchange for additional years on your term. The process, known as “blend and extend,” is best for renters with about two years left in their lease, but some owners will talk with more time remaining — especially if the property has a mortgage coming due in the next few years. Having solid tenants in place makes the owner more attractive to lenders, and that can give you an upper hand in negotiations.

“If you say you will stay another five years and lock in and negotiate a more attractive rental rate, the landlord will most likely — especially if there is pressure from the bank — say they want the longer-term deal,” Bolter says. “That will bring stability to the property and the tenant can use that to their advantage.”

Even with the scales tipped to the tenant, it’s unlikely the proprietor will reduce rates without you first doing some legwork. It’s wise to have your financial statements ready and be willing to talk about your long-term plan on the property.

Before you approach the owner, think about things from his or her perspective and be prepared to appeal to the owner’s needs, rather than pleading your own case for cheaper rent.

Your current occupancy gives you leverage for a contract that benefits both you and the titleholder. Still, should a landlord shoot down your proposal, you likely have options down the street.

Consider more than cost

With the uncertainty of how long low rates will hang around, you may be tempted to commit to the offer with the lowest price tag. However, there are factors that can inflate your actual cost. Utility, maintenance and improvement fees can hide within a hastily signed document.

A careful review with a real estate professional can weed out deals that are too good to be true and help you bargain for favorable terms. For example, a clause that ties rent increases to tangible market figures can avoid exaggerated rate spikes. You can also work to include exit or expansion options.

“Rate is very important right now, but I feel like the flexibility in the lease now, more than ever, is something tenants really need to keep an eye on,” Kahn says.

Many property owners are struggling financially, so it is imperative that you research the stability of the landlord. If the building goes into foreclosure, you may be liable for additional costs or be shuffled around by a new owner.

Open layouts and flexible equipment can squeeze more productivity from fewer square feet, and utilizing new technology and energy-efficient fixtures can trim your overall expenses. Some companies are implementing strategies, such as hoteling, that don’t strap employees to a certain workspace.

And don’t downplay the importance of location. Though you may be able to get deep discounts in a less desirable area, you need a place that employees and customers enjoy. Favorable factors, such as ample natural lighting, can increase productivity and add to your bottom line.

Also, consider the benefits of moving across city lines, as business-hungry municipalities may offer tax incentives. But before you pack up, calculate the total charge of such a venture. A low rate may be enticing, but the cost to resettle may outweigh the discount.

Overall, there are savings in real estate, as long as you take the time to evaluate your company’s long-term needs.

“Each tenant has different needs, and it’s critical that those needs are taken into consideration before adapting a one-for-all technique,” Bolter says.

Wednesday, 26 August 2009 20:00

Risky business

Unexpected events can pop up at any time — often with a hefty price tag. But having appropriate risk management strategies in place can prevent a bump in the road from becoming a detrimental blow to your bottom line.

With today’s shaky economy, it’s likely your budget is slimmer than ever. You’re not alone. According to the Aon 2009 Global Risk Management Survey, 57 percent of those surveyed reported suffering losses due to the economic slowdown. With less cash in your line items, you may be tempted to skimp on insurance to cut costs. But implementing a prevention program and carrying the right amount of coverage can actually save you money in the long run.

“Businesses in Orange County and across the country are using a number of approaches today to understand and assess their exposures,” says Stephen J. Flynn, managing director and head of the Newport Beach office, Marsh Inc. “They range from risk assessments and risk mapping to sophisticated processes, such as enterprise risk management.”

It’s likely your business already has at least basic insurance policies in place. But risk management goes beyond paying workers’ compensation premiums. A few basic pre-emptive measures now could prevent a costly incident from ever occurring — and can save you the hassle of dealing with a startling loss.

Determine your risk

Before you settle on what policies and strategies to implement, you must first determine which areas pose the greatest threats to your company’s livelihood. A thorough examination of all aspects of your operation, known as enterprise risk management, will uncover vulnerabilities.

“Effective risk assessments also can help companies make critical decisions about investments to mitigate risk, including those involving workplace safety and related training, ergonomics, facility and information security, and engineering and other measures to protect and safeguard physical plant and equipment,” Flynn says.

With peril lurking around every turn, you may feel overwhelmed. Your insurance broker or carrier can help you analyze how to best prevent disaster. You’re already paying for his or her service through premiums, so including your broker in risk planning is a cost-effective way to bring an expert to your side of the table.

“Risk is married to innovation, exploration and expansion,” says John Barrett, resident managing director, Aon Risk Insurance Services West Inc. “Companies need to take on risk in order to innovate, explore and expand.”

The slumping economy has exaggerated the market for some risks. Strapped with smaller budgets, many CEOs are reducing staff and facing the hazards that come with such measures. Wrongful termination lawsuits can soar during layoffs, and employees who fear they’re next on the chopping block could suddenly fall victim to a fabricated injury.

To protect your business from frivolous claims, consult with your insurance agent and attorney to ensure you are properly covered through employment practices liability and workers’ compensation insurance and that the actions you intend to take are legal. Directors and officers coverage may also be valuable during these times, as executives are forced to make tough decisions that deeply affect the company.

Additionally, you may be interested in credit insurance to keep your business running if your receivables are late. While many carriers have pulled back on providing such coverage, you can still take measures to protect yourself, you can still protect yourself by running credit reports on customers and reducing the amount of debt you take on.

For each risk area, map out worst-case scenarios to determine which exposures you can tolerate and which components will require more in-depth attention. Once you have pinpointed the most dangerous aspects, you can begin examining insurance policies and preventive measures.

Save money

If you’re concerned about the cost of managing risk, there may be good news on the horizon. A recent survey by the Risk and Insurance Management Society found that the average total cost of risk — which is composed of insurance premiums, retained losses and risk administrative costs — fell 9.4 percent per $1,000 of revenue in 2008.

Still, you can’t afford to pay for coverage you don’t need, so it is imperative to create a risk management plan that works for your company. If you’re willing to put in the time to calculate your options, it’s likely you can save money on premiums and avoid loss events altogether.

While some minimum levels of insurance may be mandated by your state, it is up to you to decide how much additional coverage you require. By bulking up your policy in areas that are most prone to loss and by peeling back your insurance on more stable items, you can devise a plan that optimizes coverage and minimizes your out-of-pocket cost.

However, if you choose to reduce your premiums or take on higher deductibles, you must ensure you have accounted for the potential gaps in your budget should the loss occur.

A common way to reduce risk exposure is to transfer the obligation to a third party, such as requiring tenants to provide their own insurance. You may also want to consider implementing safety measures in your business plan, such as employee workshops. These actions can improve your risk profile and make you more attractive to a carrier — and more apt to get a better rate.

To ensure you have the proper coverage in the adequate amounts, you should step back and review your strategies at least once a year. It’s recommended that you reanalyze your plan each time a major change occurs, such as a new acquisition or new product.

And don’t hesitate to reach out to your agent or carrier any time you have questions or concerns. Regular discussions help build a meaningful relationship that ensures the broker has your best interests in mind.

“If there are no changes to its operations or business model, a firm should conduct a thorough risk assessment at least once a year in preparation for its insurance renewal,” Flynn says. “In addition, firms may need to conduct risk assessments associated with any new product or service, changes in operations or business model, or in the event of any acquisition, merger or divestiture.”

In the long run, maintaining a stable partnership with your insurance provider makes sense for both sides: You benefit from receiving better service and pricing, and the broker is saved the time and effort of cultivating new clients.

“This is where the real value of a broker comes in here,” Barrett says. “The broker shouldn’t just be viewed as a transactional arrangement.”

Sunday, 26 July 2009 20:00

Balance of power

Chances are you’re feeling the pinch of today’s economy in ways you never expected. With the recent banking crisis, you may be hesitant to share your worries with your bank for fear that it may see you as a risk. And your concern may be well-founded, as more than 40 percent of banks reported a reduction in credit lines to small businesses, according to a survey by the Federal Reserve.

But now, more than ever, is the best time to buddy up with your banker to develop a strong relationship that can help pull you through hard times and can ultimately save you money.

Forming a partnership with your banker makes sense, as you both share a common goal: the financial strength of your business. By talking candidly with your banker about all aspects of your business, you bring a financial expert to your inner circle of decision-making. Along with your accountant and attorney, your banker can help you streamline efficiency and keep you on the track to financial soundness.

“We play a role as a financial adviser, whether in a good economy or a down economy,” says Mayling Exposito, director of business and corporate lending, Great Florida Bank.

“And now, it’s more important than ever to try and build those relationships and try to explain that we can help their business survive these times.”

When you make time to talk with your banker regularly, you ensure that you receive the best services possible as well as the advice you need to keep your company running smoothly — even when the economy is bumpy.

Building blocks

Communication is key during any climate, but keeping the lines open becomes of utmost importance during downtimes, says Lisa Gonzalez, business and community banking executive for South Florida, Regions Bank.

“The mutual communication is very important so that a bank can learn more about the business and better assess the financial needs of the company,” Gonzalez says.

Like in any new relationship, those first discussions can feel a bit awkward. But each time you sit down with your banker — whether during a quarterly meeting or through a monthly phone call — it becomes more of a friendship. The most basic way to begin building the relationship is by inviting your banker to visit your business, so that he or she can visualize your passion.

“We like to play a very consultative role,” Gonzalez says. “It’s not like back in the day when the banker sat behind a desk and you just came. We like to take a more aggressive approach, where we like to go out and visit the business and understand it.”

From the onset, you must convey to your banker a sense of openness and eagerness to discuss the various aspects of your company. Additionally, there should be an understanding that both sides are in it for the long haul, says Jarett Levan, president and CEO, BankAtlantic.

“The banker has to demonstrate to the business that they know about their business and care about their business,” Levan says. “The business owner needs to demonstrate to the bank that they want to create a partnership and a relationship. Both parties need to understand and believe that there’s a long-term relationship that can be established.”

Discussing a vast amount of information will help your banker understand that you respect the partnership and are looking to the future.

“We want to know the good, the bad and the ugly,” says Exposito.

While it’s easy to share positive news, such as unexpected revenue, some business owners may find their heart racing when they think about telling their banker that a major account is hovering near bankruptcy. However, discussing matters quickly and honestly can pave the road to an amicable solution. Bankers detest surprises, so ensuring that you are their first line of communication is paramount.

“When you find out something by surprise — when you read it in the paper or get a letter from an attorney — now your banker feels like you were hiding something,” Exposito says. “There’s a better chance of working something out if we would have known upfront.”

Maximize the relationship

With a trusted adviser on your side, you can work together to develop a plan to prosper. To make the most of the partnership, go over your business plan together and discuss how to improve efficiency. Even if your company is thriving, you can always benefit from the sound advice of a financial professional who can help you look to tomorrow.

From there, you can analyze the effectiveness of your current plan and figure out what changes you could make to improve your overall success.

As a CEO, it’s your job to update the bank on any changes in your industry. Your banker can then help you plan your next best step, whether it be trimming costs or planning an expansion. It’s also a good idea to ask for your banker’s opinion on how you can take advantage of the low interest rates offered today. Refinancing may lessen your payments and free up cash for other investments.

“They should ask their banker how to make themselves financially stronger,” Gonzalez says. “The customer should want to know, ‘How can I streamline my payroll process? How can I pay my suppliers faster? What are others in my industry experiencing?’”

Once you have a relationship with a bank, it may be tempting to shop around for additional services. However, remaining loyal to one bank for a variety of products — even when you could get a slightly cheaper price elsewhere — may actually save money in the long run. When a company has a variety of services throughout different departments of the bank, that company becomes a household name inside the bank and may be considered for special offers.

“Trust and loyalty has benefits on both sides, and overall, you’ll get better pricing,” Exposito says.

Find the right products

Banks today offer more services than ever before, and tackling the list on your own can be overwhelming. Once your banker understands your company, he or she can assist you in selecting products and services that can streamline your workday and improve your bottom line.

“Banks typically provide services that can then create efficiencies in any economy, such as remote deposits, where the business customers can deposit an image of their checks directly from their place of business,” Levan says. “Also, the use of online banking or cash management solutions can save money.”

Though some services have a fee, the benefits can outweigh the costs. For example, compared to traditional check depositing, remote deposits can save time and money by eliminating the need for an employee to drive to the bank.

In today’s market, cash is king. Products are available that can maximize your cash flow. Your banker can also provide advice on the best use for additional money — such as investments or paying down loans.

With the nature of banking constantly evolving, a business must trust its banker to match the business with appropriate products. A company should review its banking products annually to stay fresh on the offerings.

“We shouldn’t just be a product pusher and sell everyone everything that we have,” Exposito says “A good banker is one who analyzes the company and sells products as they are needed.”

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