Few things can make a bigger impact on your business’ financial health than finding the right business banking services to help manage your money. Of course, making your business banking relationship work is another matter entirely, but Consumers is here to help!

 

0:00:06.8 Lynne Jarman-Johnson: Money, I’m Home! Hi there. I’m Lynne Jarman-Johnson with Consumers Credit Union. Welcome on in. From finance to fitness, we have it all. And you know what else we have? We have business banking just for you and the business that you’re running. Joining us today is Gary Ferguson, our vice president of business services, and Darci Robinson, director of cash management. Thanks you guys for joining us today.

0:00:30.6 Gary Ferguson: You’re welcome.

0:00:30.6 LJJ: Our topic today is the following: What happens if you’re not happy with the current banking relationship that you have as a business? It seems to me that businesses. I ran my own business for 21 years, and you really do have to have a partnership to really help you grow. Gary, have … You know, you’ve been in this business for so many years. Tell us a little bit about the bumps that happen where all of a sudden you think, hmmm, maybe it’s time to change.

0:00:56.9 GF: Yeah. If you’re not getting the service and feedback from your banker, and they’re being non-responsive, it may be a good idea to take a look at what your options are. We have a ton of different options here at Consumers, and we like to think of ourselves as being able to come up with solutions for businesses, help them grow. We want to grow with them throughout their lifespan. And, you know, because of that, we have opportunities that we can help them with deposits, lend them money of all different types and be there throughout their cycle as they evolve and grow.

0:01:36.5 LJJ: You know, Darci, you really help businesses grow. And one of the things that I find very intriguing is it’s really tough for change. People don’t like to change. And looking ahead to change a banking relationship can be a little bit daunting. How do you help ease that pain?

0:01:52.5 Darci Robinson: Although sometimes change can be difficult, it can also be a really good thing. And to change a bank account isn’t that difficult. It sometimes does take a little bit of work. You might run your two accounts side-by-side for a while, but depending on where you’re moving, the services they offer, they can make life easier. Might be able to improve your working capital by using different products or services. And relationship is everything. Having a banker that understands your business, what your goals are, where you’re going, makes a huge difference. And if you’re not getting that from your current institution, it might be time to look around.

0:02:36.2 LJJ: You know, Gary, I assume that you have seen many changes in the banking world. You’ve been leading our wonderful team here at Consumers. What have you seen out in the landscape right now? You know, interest rates are higher. Things are tightening up a little bit. Are you feeling that with our partners?

0:02:54.1 GF: Yeah. There’s a lot of businesses seem to be on the sidelines. One of the things we don’t know is what the real demand is out there. You know, for example, if last year there’s a half a billion dollars of business in this area that’s available, you know, our slice may be X that may have shrunk down to a hundred this year, but that doesn’t mean we’re not willing and able to lend. It’s one of those things that interest rates have escalated. A lot of people feel substantially ’cause we were at a low environment for so long, they thought that was the norm. That’s not the norm. They’re probably almost at a point that is a little bit normalized, but it makes it difficult that they’re looking at projects, you know, interest rates have doubled. That’s just one component of it. You know, if you’re doing a construction project, those costs have probably doubled, or continued to escalate. They haven’t really eased up. The demand is strong, you know, for housing and everything. So there’s just nothing to push this stuff down. So, you know, we’re all trying to adjust and trying to find ways to make these things happen.

0:04:00.3 LJJ: Darci, tell us a little bit about, you mentioned capital. What are the items and what are the … what’s the paperwork, I guess to say that people should have ready if they’re thinking, “Hey, it’s time for me to have options.” I keep hearing the words from some of my business partner friends, “You know what, I’m just so tired of being a number. If I don’t look like this on paper, I just … I feel treated poorly.” And that’s the one thing that I’m so proud about with Consumers. We offer so much in so many ways that’s almost a story to hear.

0:04:30.2 DR: Oh yeah, definitely. As far as paperwork, it’s the basic things that you’re going to need. You’re going to need your business entity documents, your tax identification number, personal ID to open a deposit account. As far as working capitals, there’s different tools that businesses can put in place, such as ACH, that can help with your receivables, as well as your payables. And it makes account reconciliation easier. Working capital can also be having a savings account, having a backup plan, having a line of credit. Depending on each individual business, it will determine what’s right for that business and what they need their cash flow to look at. Most businesses when they start out, they create a business plan, which is perfect, which is exactly what you need to do. You have your competitors. What’s my goals? But then after a business is up and running, that business plan kind of gets put in the background. And it’s something that you probably want to review every year. Are you on track? Has anything’s changed? Have any new competitors come into the market that you’re not aware of? ‘Cause everything is evolving, whether it’s pricing competition or if you think, hey, I sell VCR tapes.

[laughter]

0:05:53.6 GF: Huh?

0:05:56.8 DR: Exactly. Right? [laughter]

0:05:58.1 LJJ: That was …

0:06:00.0 DR: So [laughter], some things become obsolete. And seeing into the future, do I need to pivot based on what’s happening in the economy or with technology?

0:06:09.5 LJJ: Well, I’ll tell you, pivoting is one thing I think that is so important right now, especially with what’s going on. We were just talking. I saw a speaker talk about AI and artificial intelligence and how that can help a business, especially in trying times with talent. But I’ll tell you, it, it … everything seems to be going so fast. Gary, have, have you seen that fear of people thinking like there’s such great change coming? Or do you think it’s just that? Yeah, it’s just the environment’s just a little bit, you know, off right now, but we’re going to get there.

0:06:40.0 GF: Yeah, I think everybody’s a little concerned and, and I’m not sure they really know how to read a lot of the AI stuff that’s out there. It’s just to me, a lot of times, ’cause I’ve been in the industry for so long, almost feels like information overload. So you just kind of have to weed through it. What’s pertinent to you for that day or what makes the most sense. You know, there’s just too much sometimes, you know, yeah, break it down, keep it simple.

0:07:04.3 LJJ: And dusting off the business plan and going back and having a partner that will help you look at it through a different lens. How, valuable is that?

0:07:13.7 GF: That’s huge. I think a lot of times, business, they’re very passionate when they get into business. They love what they’re doing and that works today. But as you grow and try to scale up in everything, the dynamics change. You need to bring more partners in. Yes, it’s expensive, but you can’t grow without the necessary tools. When you look at your business plan, whether it’s today or five years from now, I think it’s always interesting to say, you know, did I hit the mark? You know, did I do what I really thought I … You know, maybe not. Maybe there’s external environments that prevented that. But as I look at businesses today, a lot of times the business owner is very good at what he does, but oh, can he read the financial statement? And not all of them can. And …

0:08:01.6 LJJ: They’re very talented.

0:08:03.6 GF: They are.

0:08:04.8 LJJ: And perhaps making something work.

0:08:06.9 GF: They’re very good at what they do, but it’s … it’s, by the way, this is your scorecard, and you need to look at that probably weekly, you know, to know, am I making money or I’m not making money? And if I’m not, I need to make some adjustments, whether it’s to cut expenses or increase my sales by increasing the pricing. You know? ‘Cause the inevitable will be out there. [laughter]

0:08:28.1 LJJ: Absolutely. You mentioned ACH as a tool that companies can use. How many companies … do you have any ballpark. Truly just aren’t. They’re still on the paper and the ledger, and it’s just, it really is a game changer for businesses.

0:08:41.5 DR: It is. There’s quite a few businesses that are still doing things by paper. For a while, it’s always going to have its place, I think. But especially with fraud, nowadays, the more paper that you’re putting in the mail, the more chances of having it fall into the wrong hands. Every time you write a check, you’re giving away your routing number and your account number. With ACH, it’s a more secure type of payment. It’s faster. It’s going directly into the account you’re sending it to. You don’t have to rely on the mail. So, all those things come to play when you’re looking at paper, whereas electronic, it cuts down on some of that risk.

0:09:23.3 LJJ: And it sounds to me like security is just as important for as an individual, you know? Right?

0:09:28.7 GF: Absolutely.

0:09:29.6 LJJ: With ID that … As it is for a business running.

0:09:33.2 GF: Yes.

0:09:33.7 LJJ: I love the stories of the mom-and-pop business, right? That all of a sudden grew. When is it that we recommend to people who have started a business that was just for them to have some fun with, and they’ve been doing it all through personal accounts. You know, when is it important to say, “Hey, this is a business entity, and you really need the business paperwork and legalization of it?”

0:09:55.2 GF: Probably about the … that time when they actually create that entity and get a separate tax ID number. You can run it through your personal for a while, but you want to be able to separate your personal balances and assets versus your business. The whole point of creating a corporation in that is to insulate you to some extent, you know, from creditors, you know, something goes sideways in that, but, most small businesses, you’re one and the same. So, there’s only so much you can do, but still, it makes more sense to track and monitor that through the entity than it is through you personally.

0:10:32.5 LJJ: Tell us really quickly, Darci, do you have any stories of a business that you look at that maybe changed their relationship and came over to Consumers and it just makes you smile?

0:10:45.2 DR: There’s a business that I worked with recently. They’re larger and because we’re a credit union, they hadn’t ever had accounts with credit unions. Had a few meetings with them, showed them our great online banking, the different products that we used. We were able to save them $20,000 a year in bank fees, which …

0:11:05.3 LJJ: Wow.

0:11:06.5 DR: Yeah, it’s …

0:11:06.8 GF: It’s huge.

[laughter]

0:11:07.6 DR: That’s amazing. So with them being a non-profit that allows them to give back to the community and do what they’re best at doing, it was a twofold. I was able to make them happy, as well as help the community because they’re saving money.

0:11:28.2 LJJ: That is amazing. Gary and Darci, thank you so much. Next month we’re going to actually be focusing on what you need to do and you know, Darci mentioned a little bit. What does a credit union do for business? We’re going to tell you that next month. Thank you, Gary. Thank you, Darci.

0:11:42.3 DR: Thank you.

0:11:42.6 GF: Thanks Lynne.

0:11:43.1 LJJ: I’m Lynne Jarman-Johnson Thank you for listening. Thank you, Jake Esselink, for your production skills, and I hope everybody has a safe week. We’ll see you next week on Money, I’m Home.

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