Turn Your Banker into a Real Asset

Classic Cincinnati Post column from 1998

Entrepreneurs spend more time developing a solid relationship with their Federal Express courier than with their banker.

Many fear getting to know their banker. Why?

The business owners know that banks have thousands of rules and guidelines that must be strictly followed and they probably feel they are not in compliance with 90 percent of them. They operate on a modified ”don’t ask, don’t tell” philosophy: ”If the bank hasn’t told me, I must be OK!”

This approach is as valid as ”I still have checks left, so there must be money in the account.”

Entrepreneurial life doesn’t have to be that way.

You can change the ruthless headmaster/incorrigible student relationship into an asset to grow your business. First of all, choose you banker as well as your bank. Ask about the many services each bank can offer a small business. In addition to offering checking and secured loans, they have revolving credit lines, credit card processing, integrated services, online banking and the list goes on.

Then choose your banker.

Upgrade Your Business Toolkit

Classic Cincinnati Post column from 1998

When my wife and I bought our first house some 20 years ago, we quickly discovered how woefully inadequate our apartment dwellers’ tool kit was for the demands of home ownership.

Two screwdrivers, a hammer, and an adjustable crescent wrench simply weren’t sufficient for the kinds of problems that we had to solve.

Most small business owners have a similar kind of experience. The tool kit that may have served them well as consumers, or even as novice business owners, is often no longer equal to the tasks at hand and needs to be upgraded.

The business tool that most often needs upgrading is the accounting system.

Many small business owners assume that this means changing from a manual to a computerized accounting system, but that is not necessarily the case.

The key upgrade is to go from a cash basis accounting system to an accrual basis system. Only an accrual basis system, one which accurately matches revenues with direct costs regardless of when cash is received or paid out, provides business owners with information they need to effectively manage. Only an accrual system can pinpoint problems, like those with pricing, that directly affect profitability.