Where and how a small business owner chooses to manage their money can play an important part in the overall success of the company. So often, entrepreneurs disregard the importance of shopping around for the right bank for the business and end up paying for it in the long run. Understanding what services your business requires is part of Small Business Banking 101.
Common small business banking needs often include:
- Basic Services - including credit cards, savings and cheque accounts
- Lending Services - lines of credit, equipment and term loans
- Cash Management - wire transfers, merchant services, lockbox
- Others - payroll, superannuation, insurance, import/export, etc.
If your bank cannot offer all of the services you need, shop around. These are the bare bones of necessity and trying to operate without one or the other will be a painful process.
On the other hand, it can be useful to use a different bank for some services - especially specialist services.
Talk about fees. Request a list of fee incurring services and make sure your accounting team are aware of them all. These add up!
Ask about fee bundling and compare amongst banks. Recognise your bargaining power as a new client to the bank and negotiate.
View banking relationships as marriages - you are (with the best intentions) in this for the long haul and you want to air the dirty laundry before you make a commitment.
Go with a banker who understands your industry and has the foresight and experience to make predictions and stay ahead of the game.
Experience also leads to better crisis management and informed decision-making in heated situations.
Do the research and reach out to other bank customers if possible. Enquiring as to their sentiments regarding the handling of their accounts can shed some truthful light on an otherwise sales-pitchy-pitch by the bank.
Don't be scared to let them know you are shopping around. Your business is valuable and should be viewed as such.
A big consideration is whether to go local or offshore. There are pluses and minuses to each, weigh the benefits to your business, specifically.
Changing banks is an unwanted hassle so take time and don't rush the process.