When COVID hit, most people called their family and friends.
My first phone call was completely different…
…I called the bank managers of the businesses we serve.
Take the heritage railway which I told you about last week.
I’ll never forget the call, because their bank manager was brand-new, and “Hello Brian, I need money,” isn’t exactly a textbook opening line!
But I could do it, because I actually had a very long-standing relationship with his predecessor and with others in the bank.
Brian became instrumental in securing a line of credit which helped us through the pandemic. And since then, I’ve cultivated that relationship, taking him up to see the railway – he’s even become a bit of a fan – and keeping him updated with our management accounts every quarter.
If you don’t have a relationship like that with your bank manager, you need one.
In my past few emails, I’ve been talking about the growth of businesses who seem to be experiencing liquidity problems. They’re not being paid on time – and in some cases, not being paid at all.
Even though it might not have affected you yet, it may still happen in the future.
And if that’s ever the case – or if you ever face any other kind of funding emergency – you’ll need help from your bank manager (or another lender) to help your business survive…
…especially if you don’t have a lot of business savings.
The time to make your bank manager your best friend is now, in the good times, when you’re sure you don’t need them!
If you bang on their door in an emergency, and you’re just one of several businesses desperate for help that week, it’ll be difficult for them to help you.
But if they’ve known you for a long time, and have seen your business in better times as well, they’ll be more inclined to stick their neck out for you.
And no, this isn’t just about favouritism from their point of view. It’s genuinely a safer bet for them, and in the banks’ interests, to help those businesses it knows well.
Now, building a relationship like that takes effort nowadays. Banking has become less personal, and if you’re a relatively small business, the manager in many banks isn’t necessarily going to be bringing out the Champagne when you arrive.
Still, there are many banks where it’s still possible – the “challenger”, less established banks are particularly good at this. It’s important that you find one, and switch if necessary.
Ask for a meeting with your bank manager, and share your management accounts each quarter so they have an understanding of your financials, and can see you’re solid long-term.
Take them on a tour of your facilities if possible, and pick up the phone regularly. Be proactive – the onus here is on you.
This is one of the most important services we offer our clients, when we manage their company’s financial affairs.
We always reach out to their existing banks, and if the managers seem disinterested in developing a close relationship, we move our clients to one of several banks where we already have very tight ties.
Having this relationship with your bank manager is like an insurance policy. Hopefully you’ll never need them, but if financial disaster ever strikes, you’ll be very glad to have them onside.
They may not be the ones making the final decisions about your loans or credit, but they can become your greatest advocate in your time of need.
You see, world-class financial management is about so much more than last year’s accounts (though it’s that too!). It’s about putting in place systems and processes to manage your cash smoothly in the present…
…And making sure you have all the financial information and relationships you need to thrive in the future – in good times and in bad.
If that’s the level of financial management you’d like for your business, get in touch today.
Simply email me or call me on 01279 647 447, and let’s talk about how we might help you.
Warmly,
Garry
