Impressing your bank manager

In recessionary times you need the bank on your side.

Whether you need to get a loan, top up your overdraft or just keep your current facilities in place, you will need to have a good relationship with your bank manager.

Here is my list of ten top tips for dealing with your bank:

Be upfront with your bank manager
Bankers don’t like surprises. Don’t wait until you are in trouble – keep the bank informed and up-to-date. Many small business owners will do anything rather than admit they may be heading for problems, but it is much easier to turn around a business dealing with early stage difficulties than one which has already hit the rocks.

Keep an eye on your bank account on a daily basis
There are no excuses with internet banking available to all.

Prepare an honest and open business plan
You wouldn’t build a house without drawing up the plans first. It should be consistent and evolve over time as you revise and change your initial assumptions, but not be subject to knee jerk changes.

Measure your performance
Use the business plan to measure performance, keeping track of the key areas where you need to deliver.

Understand your own numbers
Get a handle on pricing, turnover, margins, costs and profit and how they all link together. Operate a basic but sound book-keeping system.

Adopt a rigorous approach to working capital and cash management
Prepare basic cashflow forecasts and understand the working capital needs of your business.

Share your financial information with your bank
Produce regular management accounts (they only need to be basic). Produce forecasts covering profit and cash-flow. Show your assumptions and a best and worst case scenario. Keep it simple and make sure you understand it yourself. Share all information with your bank manager.

Be consistent, reliable and honest
A bank’s systems will already be telling them a pretty clear story about the finances of your business, so there is no point fibbing.

Show the bank you are going the extra mile
Tell your bank why they should continue to invest their money and stake their reputation on you.

Remember to treat the bank manager as if they are on your side
If you treat them like the enemy, then that is how they will behave! Treat them as one of your closest and most important business partners.

Karin Wilson