Last week, I spoke at a virtual event about scaling companies through acquisitions.
It was a timely talk, as there’s (understandably) a lot of uncertainty and distrust towards many banks given the recent turmoil in the global banking system.
After my talk, I had dozens of people reach out to me for advice on how to navigate the process of working with their bank, both specific to their own situation and in regards to the overall uncertainty they are feeling in the current economic environment.
From either angle, I start with the same answer: you need to maximize the relationship you have with your bank (or develop a deep relationship with one if you haven’t already!)
I feel so strongly about this topic that I want to share this video I recorded over a year ago (in the drastically different market conditions of low interest rates and easy money). Even today, the lessons in this video are more important than ever.
If you watch the news or spend time on social media, it’s easy to look at banks with suspicion. But if you simply take the approach of developing that human relationship with your local bank, I promise you’ll be able to sleep much better at night
But it all starts with these four critical rules:
- Treat your bank like a partner, not a vendor.
- Choose a bank where you could actually have lunch with the CEO.
- Does your bank support cash-flow-based lending?
- Ask for capital from the bank before you need it.
Now, more than ever, is the time to be pinpoint focused on who you bank with.
Even if you aren’t thinking about acquisitions.
Even if you aren’t thinking about large purchases or investments.
Your banking relationship is your most important business relationship.
Don’t automate it.
Don’t outsource it.
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