Bizstartup.ie - Start Up Kit

Your new business is only the beginning of a journey and it’s likely that initially the outflows will exceed the inflows, so do expect to have cash deficiencies and borrowings. Enter the bank manager and one of your most significant stakeholders in the start-up stage. Yes, he needs the numbers but don’t stop there. Your ‘new baby’ is more than just numbers and it's the story behind the numbers that will influence your future with your banker.

Consider the relationship you have with the significant people in your life. I bet it’s based on trust, respect and openness. Don’t kid yourself your relationship with your bank is going to be any different. Here are a few points to start that relationship:

• If meeting face to face then dress appropriately to show the meeting is an important event for you and you take it seriously. I’m not saying it needs to be your Sunday best, but remember he will be making judgements on your appearance. After all he probably will have no other information on you at this initial stage. There is very good scientific evidence to show that first impressions do count, they stick easily and can take a long time to change.
• Stories are compelling and a good story sticks in our head and influences how well we remember it. What do you want your bank manager to remember about you and your business? At the very least he must remember your commitment, knowledge, experience and – above all else – your passion for your new project. After all when times get tough, which they will, it is your capacity to keep going, your resilience not to give up that will sustain your business and safeguard your investors, including the bank. When you leave the banker’s office he needs to remember you as a person he trusts and respects and he believes in you to look out for his money.
• Think also what it’s like for him. Head office may not be encouraging him to lend too easily or quickly at present. Think of the people at head office that he may have to convince you’re a safe bet. You’re competing with many other people for scarce resources. Give him the arguments he can use to make your case. Give him the courage to go out on a limb for you if necessary.
• Finally if he refuses to give you that overdraft learn from the experience. Listen to the feedback he gives you regarding your loan application. Don’t be defensive, it isn’t personal. So if he has some comments to make about your product listen attentively – he may know something about the market that you have yet to learn. His advice may help you to improve your business plan or presentation. Take it, it’s free.

If at first you don’t succeed then try again. Apply what you have learned from this relationship and redo the plan. Try the next bank, there’s still a lot of them out there. After all how many relationships did you try before you met your husband or wife (if you’re married that is!)?