Contrary to what the average small business owner might believe, bankers are people, too; and most of them are very decent and helpful, says Ron Immink, founder of Smallbusinesscan, CEO of Bookbuzz and director Strategy Crowd.
"Business owners underestimate the connectivity banks can provide," he says. "Map their ecosystem and ask for introductions."
Ulster Bank/RBS hired Ron to develop Smallbusinesscan, a portal for advice, information and events for businesspeople by businesspeople.
We recently checked in with him to get more ideas for how business owners can make the most of their relationship with their banking partner. Here's what he had to say:
What's your business background?
I have been an entrepreneur all my life - had my first business when I was 19 while in university studying entrepreneurship; built two training and consultancy companies to substantial valuation; have been in publishing, tech transfer and innovation; and currently work on projects combining social media, narrative, storytelling, dialogue learning, collective wisdom, peer-to-peer and social learning with innovation, change management, strategy and ultimately helping businesses succeed.
How important is it that small business owners find a banking partner they can trust?
We did a lot of research that shows that most business owners don't trust their bank. In fact, the banks are seen as necessary evil. But increasingly, businesses have lots of other avenues for their banking, so there is a lot more choice. Trust is something that is earned and it is mutual.
Where should business owners start when trying to find a bank that will serve their needs?
Check their online capabilities. See what they do to support small business. How active are they online and in the business community?
These are all the reasons why we created Smallbusinesscan for a bank in Ireland. Basically, we get paid to be helpful to small businesses - any business. They don't even have to be a client of the bank we work for.
Find a bank that fits your ambitions.
What should small business owners do to make themselves more attractive to banks?
Make the business model understandable to the bank. Sales is everything. Market research only is not enough. Show that you have the team to execute and grow. Keep lines of communication open.
What sorts of considerations should business owners make when selecting a bank? What questions should they ask?
Who are the experts/mentors I can talk to?
What organizations do you partner with?
How big is your network?
Who is going to by my contact person and for how long?
Who makes the decisions and how?
What are the most common mistakes you think small business owners make when choosing a banking partner? How can they avoid making these mistakes?
Business owners need to understand the business model of the bank; which, for example, means that small companies will not get an account manager - the same way companies don't assign account managers to small clients. It is too expensive.
They are a business just like you. Ask for a quick no. Understand the rules the banks have to comply with. Understand their decision-making process. Do your homework. Regard them as a supplier. Apply vendor ratings.
What types of services can banks offer small business owners beyond providing loans or business accounts?
A bank in Holland supplies sectoral information every three months so you can benchmark. RBS has created ESpark, which is a free business development program. Ulster Bank created Smallbusinesscan. Other banks provide free workspace. I wouldn't underestimate the soft supports that banks can deliver.
What are some of your favorite resources for small business owners who want to make smarter decisions about managing finances?
If you want to be smart about finances, you need to be smart about the future and where things are going.