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Picking the right bank
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May 27, 2000: 7:00 a.m. ET
Finding a bank that matches your business' needs can be an asset
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CITY (CNNfn) - One of the biggest challenges a small-business owner faces is establishing a good relationship with the right bank. The problem is, bankers are often cast as villains by the small-business community. While the myth is that bankers just don't like entrepreneurs, the reality is that bankers have nothing against entrepreneurs personally. The problem is simple: Bankers are by nature conservative and risk-adverse. Entrepreneurs, on the other hand, are risk-takers and thrive on uncertainty.
 If you look at the problem as a communication gap, not a personality clash, you'll be on your way to building a tremendous relationship with your banker.
But how do you find the right bank for your company?
Step One: Determine exactly what services you need a bank to provide. Your needs will depend on where you are in the business life cycle. In the first year or two, you'll probably need a business checking account, a savings account and, if you process credit card orders, you'll need merchant card services.
Other services you might require:
· Letters of credit (domestic and international)
· Notary service
· Travelers checks
· Commercial line of credit
· Small Business Administration-guaranteed loans
· Wire transfers
· Direct deposit of payroll checks for employees
· Payroll tax deposits
Step Two: Your goal is to match your needs with the right bank in your community. Many entrepreneurs prefer to open their business account at a small community lender. The advantage to being at a small bank is that you will probably get to know the people better. And, if you are lucky, you'll receive better day-to-day service.
The downside to dealing with a smaller bank is that it may be limited when it comes to the amount of money the bank can lend. A smaller bank may not be as financially sophisticated as you would like it to be if you are dealing globally.
After my company completed extensive market research for a major bank, I was surprised to find that the most important thing small-business owners  wanted from their bank was a personal banker-a banker who is responsive to their specific needs and knows their business and their accounts.
Unfortunately, most banks, big and small, are moving toward centralized processing for just about everything. The branch-banking system is shrinking as many people prefer to use ATMs, bank by mail, and move money via electronic-funds transfer.
Despite these drawbacks, it's still possible to create and maintain a good relationship with a banker. Choosing a banker is like choosing a good doctor. You want someone who is competent, personable, and a good listener. Your banker, if he or she is dedicated, will become an integral part of your strategic planning or management team.
Here's how to find a good banker:
· Ask friends and colleagues to recommend their favorite bankers. Many bankers move around, so if you find someone you like, you may be forced to follow them from one financial institution to another.
· Set up interviews with a few potential bankers. Meeting face to face is critical to making an informed decision. You should ask for references and call other business owners who are bank clients. Because changing banks is such a hassle, you want to invest time up-front and make a decision based on research, as well as on gut feeling.
· When you have selected a banker, schedule a time to open all your accounts at once, if possible. Be sure to link your accounts together if you plan to move money back and forth between them. If your deposit is large enough, you'll probably qualify for a free safe-deposit box and other perks.
· Once your money is safely tucked away, a good banker will spend time getting to know as much as they can about you and your business.
Your responsibility is to provide your banker with current and continuous information so there will be no surprises. Invite your banker to visit your office or factory. Send them copies of new catalogs, press releases, annual reports, and so on.
(Excerpted from 201 Great Ideas for Your Small Business, Copyright 1998 by Jane Applegate. Published by arrangement with Bloomberg Press. Excerpts appear on Saturdays on CNNfn.com.) 
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