Terminology Library Now Live

What a Banker Should Be: A Financial Confidant

Uncategorized Jan 10, 2024

Business owners are searching for someone, and I’m not talking about new customers (but they’d probably like them too :).  Business ownership can be lonely.  How is this true?  Businesses can consist of many employees and customers; how can it be lonely?  Because many business owners do not have someone they can talk to about the inner workings of their business.  As a business owner, can you talk to your staff about worries of meeting payroll in two weeks?  Or can you talk with your team about the debt load your business has as a result of past mistakes?  If you can, great, but if you are like most business owners, you can’t.  There are somethings you cannot share with your team because your team lacks the full context, and if they misunderstand what they’re told, at best they keep working and at worst, they leave and tell your customers why.  When an employee hears “I’m worried about making payroll” that employee will start applying for new jobs, and they might tell other coworkers to do the same, but in reality, the business owner’s worry could be caused by a simple delay in receipt of an invoice.  Without the right context, a person may come to the wrong conclusion.

Business ownership is tough, and to help them through, business owners are searching for someone.  Business owners want that person they can talk through their business with.  Not talk “about” their business, but rather to talk “through” their business.  Business owners, especially small business owners, are searching for a financial confidant.  They are searching for someone to share the inner workings of their business and to bounce potential solutions off of.  On the path of business ownership, having this person can be immensely valuable.  

A Community Banker can be this person.  Bankers already possess much of the information a business owner is scared to share, but unless the banker actually understands how the business works, they will not be able to be that financial confidant.  

So why don’t bankers fill the void?  Community Banking has lost its way.  We have transformed from one of the central pieces of our community to a cash commodity salesman getting undercut by our least intelligent competitors and fast cash online lenders.  Why has this shift occurred?  Because we got lazy.  It was easy when Community Bankers had a monopoly on a money.  Regardless of how good we were, business owners in our towns had to deal with us because they didn’t have other options, but now, they do have choices.  Unless we give them a reason to choose us, they will choose whoever is the fastest or the cheapest.  In order for them to choose us and us to have a chance at being their financial confidant, we need to provide them something our stupid competitors can’t and online lenders won’t.  We need to provide them value.    

What does value look like?  Prepare yourself for a gray answer.  Value is in the eye of the customer.  Just like how a $1,000 purse is valuable to some, but a broccoli rubber band works for others, to really provide value, you need to match your strengths with what matters to a customer. 

Here are some examples:

  1. If the customer is a financials guy, team him up with someone who can keep up with his numbers crunching
  2. If someone is looking to jump into a new industry, use your network to connect them with someone who has done it before
  3. If someone is looking to bring on new revenue sources, team them up with someone who thinks out of the box
  4. If someone is looking for the lowest rate, team them up with the bank across the street

The options for adding value are huge, but the potential for getting intimidated by how that happens is huge as well.  The process of value creation begins with recognizing what makes you unique, then identify how that uniqueness will benefit someone, and then finding someone who values that benefit.  Will you get it wrong?  Yep.  Will you meet people who aren’t a match? Yep.  Will you need to refer business to others? Yep.  Will you ultimately be more successful than otherwise possible? Yep.  

Community Banking should be a major component of their community, and it can be that again.  Identify you strengths, figure out who will benefit from them, and then find those business owners.  By providing value, you then get the opportunity to become that businesses financial confidant. If you can do that, they will be better off, you will be better off, and your community will be better off as well. 


Claim your DSCR Cheat Sheet

No other ratio get's as much attention as the Debt Service Coverage Ratio (DSCR).  Get actionable results with our DSCR Cheat Sheet.