Friday, March 4, 2022

5 Questions Every CEO Should Ask their Banker

five key questions

As business leaders, it is imperative to have an inner circle of advisors you trust. In addition to a CFO, you often seek advice from attorneys, CPAs, and insurance agents to name a few. Adding a local banker to your list who lives and works in your market is smart and strategic.

Of course, a banker will discuss your business finances and help you gain access to capital. A trusted banker also has vast knowledge of the market, is up to date on the latest business deals and happenings and can share a wide network of contacts to help your business grow. With a community bank, decisions are made locally and often, much quicker, than at larger national financial institutions.

I would encourage any business leader to ask these questions of their current or prospective banker.

1. Is now a good time to expand my business?

Your banker should walk through different scenarios with you. What is the current demand for your products or services? Are customers requesting a new product line? Do you have customer support to grow? Are you growing so fast that you can hardly manage current business? Do you see an unprecedented opportunity that is exciting and difficult to pass up? Is your overall industry growing and is the opportunity ripe?

2. What precautions should I put in place to help my business with the concern of inflation and a potential recession?

Dollar moving up. Money finance growth chart graph stock market

Your banker understands that the effect of inflation on small to medium-sized businesses may seem somewhat insignificant in the short term; however, it can quickly have an impact on your bottom line. Reduced purchasing power means that businesses will sell less and potentially lower profits. Lower profits mean a decreased ability to grow or invest in the business itself. Credit control can help offset inflation. Your banker may direct you to increase savings and reduce unnecessary expenditures.

3. Can you offer my business options outside of traditional banking?

A community banker should detail any new technology and additional services they offer. Such services can help you cut costs and be more efficient. There are multiple treasury management solutions that can efficiently help you manage your business budget, improve cash flow, protect against fraud, and reduce processing delays. Definitely inquire about remote and mobile deposit, ACH and wire management systems that will save you time and money.

4. Can you help me with supply chain issues?

Your local banker can tell you about certain lending tools it can recommend to offset this rising challenge. Supply chain financing can support the trade relationships of middle market companies as a way to help stabilize supply chains and improve working capital.

5. How can you support my growth plans?

A trusted banker should understand your business and industry. He or she can assist in reviewing financial forecasting and projections. Ask about cash flow analysis and tips to gain financial efficiencies. Moreover, your banker should be a good sounding board and offer advice.

I believe if you focus on building a positive relationship with an experienced community banker, your business will succeed and grow.

Too many leaders navigate the financial arena with little personalized support. Sadly, 20% of companies fail within the first two years, according to Forbes. While opening a new business can be exciting and is more popular than ever, getting sound banking advice at the start, or even years after launch, can propel your business forward and help you serve your customers far into the future. I believe if you focus on building a positive relationship with an experienced community banker, your business will succeed and grow.

About the Author & Blue Ridge Bank

Chris Layne, market president at Blue Ridge Bank is a professional who primarily works with closely-held and non-profit organizations in and throughout the Richmond Metro region. If you have any questions for Chris. please feel free to reach out to him at 804-518-2625 or chris.layne@mybrb.bank.

Blue Ridge Bank is a Virginia bank with a national reputation, Blue Ridge Bank is all about business. Our team exudes an enterprising spirit in each local market so we can best serve our business clients. We provide a wide range of financial services including retail and commercial banking, private banking and wealth management, mortgage lending, and government-guaranteed lending. 

About Virginia Council of CEOs (VACEOs)

Virginia Council of CEOs (VACEOs) is a nonprofit organization connecting CEOs for learning and growth. Formed more than 20 years ago, member benefits include placement in a peer roundtable group and access to a thought leader network, and a robust program of events for learning and growth. This is not a networking group, but rather a group of CEO peers who are invested in the success of each member. To qualify for membership CEOs must run a business with $1M+ revenue and 5+FTEs. Learn more at www.vaceos.org.

Posted by Scot McRoberts at 10:55 am

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