How to achieve your business goals by conducting an annual financial checkup Featured

7:20pm EDT November 30, 2012
How to achieve your business goals by conducting an annual financial checkup

While executives generally recognize the need for a good accountant or lawyer, they often overlook the importance of a strong banking relationship. A bank not only provides the banking services and funds needed to grow, experienced bankers can provide expertise and the financial solutions you need to stay ahead of the competition.

“Your banker can provide a competitive advantage for your company by being a valuable resource for financial expertise,” says Pamela Campbell, senior vice president and San Diego regional manager for California Bank & Trust. “An annual checkup is a great way to see what you could be missing.”

Smart Business spoke with Campbell about the benefits of periodically evaluating your banking relationship.

Why is it important to evaluate your banking relationship on a periodic basis?

Professional bankers can identify potential barriers to success and proactively recommend a customized range of solutions before the need arises. They anticipate your needs as a result of taking time upfront and on a regular basis to meet with you to understand the specifics of your business. They tap into and share industry knowledge and ideally are given the opportunity to analyze your financial position through receipt and review of financial statements. For instance, if your goal is to market products overseas, your banker should, first, understand your goals and, second, suggest appropriate international banking services that will help make your strategic transition into new markets more effective. The relationship you build with your banker today can eliminate uncertainty and assist in achieving your immediate and long-term goals. This forward planning eliminates unnecessary stress and will yield dividends down the road.

What should executives consider when evaluating their banking relationship?

It’s critical to consider not only your business’s current needs, but also its future aspirations by asking these questions:

Is your banker responsive and knowledgeable? Do you have someone at your bank you can rely on when your banker is not available? Your banker, along with the support of his or her team, should return your calls, texts and emails, and take responsibility to answer any questions or solve problems that may arise. He or she should not only understand your industry but also be able to identify appropriate solutions and take a hands-on role in helping you solve your business problems through referral to professionals within your community.

Is the senior management team local and accessible? The fate of your loan may reside with a group of distant strangers. Having the ability to meet the local management team and share your business plan is an important part of building a solid banking relationship.

Is your banker willing to invest time in building a relationship? Does your banker engage in an ongoing dialogue with you? Is he or she willing to meet on a regular basis or whenever the need arises? It takes two willing parties to have a productive relationship.

Can your banker explain the bank’s lending philosophy? If your banker cannot do this, he or she won’t be as effective in serving as your advocate during the loan approval process. A seasoned banker, within a reasonably short period of time, should be able to determine whether the bank will be able to support your company’s lending needs. Their ability to review a transaction upfront and identify the strengths, and mitigate any potential weaknesses, will save your company time and provide the clarity to plan for the future.

Is your banker invested in the local community? They will then not only understand the market and economy but also be committed to the success of their clients.

What would executives hope to uncover or discover during this evaluation process?

The evaluation should reveal whether your bank’s vision, policies, philosophy and staff align with the strategic direction of your company. Determine whether your bank possesses the credit appetite, expertise and services to grow with your company. For example, some banks may not be a good fit because they cater to a specific industry niche or maybe don’t offer the services you need to sell your products online or overseas. Your evaluation should reinforce your decision to stay or highlight the need for change.

What shows that changing banks is warranted?

First, do you have a banker assigned to your relationship? Your banker should be someone you can count on to solve problems, respond to requests in a timely manner, offer guidance, and even refer you to additional resources like attorneys, accountants and/or consultants who can help you develop and/or execute on a financial forecast or a business plan. Your banker should be part of a team of professionals you can rely on for support. You should consider a change if your current banker is unwilling to spend time with you, is nonresponsive when you have a request, or can’t explain the pros and cons of various loan or deposit products or what you need to do to qualify for them. If your bank can’t deliver when opportunities arise, you may need a different bank.

What should executives consider when selecting a new bank?

Certainly services and fees are important, but also consider the bank’s niche, its structure, and chemistry with the management team and staff. A community-oriented bank familiar with your industry may be the best bet for small to mid-sized companies because it is committed to helping the region thrive. This understanding of the local community combined with access to banking professionals who support your company with personalized service and proactive solutions will help you achieve your goals. A solid banking relationship reduces stress and helps you focus on the execution of daily activities. There’s no need to settle for a transaction-oriented bank when it’s possible to gain a competitive advantage through relationship banking.

Pamela Campbell is senior vice president and regional manager for California Bank & Trust. Reach her at (858) 623-1930 or

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