Your business had a storybook beginning. It started as an idea on a cocktail napkin. World headquarters was the garage at home. And office hours were before sunrise to well past bedtime.
Now, your company is taking off. Sales are growing. You're adding employees, scouting for new office space and keeping the same office hours. You're starting the next chapter of your company's story, and that's exactly when you should ask: Is my financial services provider on the same page? Or is it still serving the needs of a start-up? And how do I know when I need more?
If you already have a great relationship with your business banker, you may know the answers already because your banker is asking you the right questions. Yet, business owners should know the signs that show their business banking needs are changing and growing.
One major indicator that your business has advanced is credit needs. As your credit needs become more complex, you should have more than an annual review with your banker. For many businesses, when credit requirements approach or exceed $100,000, it's important to work with a financial services company that offers a full array of services and options for business owners.
For the growing business, credit lines and loans can be used to expand office space, purchase inventory, and finance receivables and daily operating needs. In the beginning, a basic revolving line of credit or term loan may have met your requirements. Yet with rapid growth and significant working capital needs, your business may benefit from customized solutions, such as asset-based lending secured by your business accounts receivable, inventory or other assets and specialized equipment lending and leasing.
Another sign that you're ready for an expanded business banking relationship is the growth of your business deposit accounts. When a company's bank deposits reach the thousands, and especially when those deposits reach $100,000, the business should have ongoing account analysis services. This would include regular reports from your financial services provider that detail balances, trends and activity for all of your accounts.
Also, when your business has higher deposit balances, your business banker should offer recommendations for actively managing your account, such as an overnight sweep service that routinely moves funds from your checking account into a higher interest earning account.
When your business is ready to build or expand an office or plant, it's one more signal that you are beginning the next stage. Make sure your business banker is providing the support you need, such as exploring all options for financing the expansion and getting the best rates.
If your financial services needs are handled by more than one provider today, it's a good time to start considering the option of bringing all of your business to one financial services company. As your business grows, a full-service provider can offer convenience. As you grow your business with the company, it's likely you'll also earn added value such as discounts and savings.
What's more, as you grow, you will want a business banker who can access a full array of resources to help your business. Hiring more employees? Check to see if your provider has payroll services, and benefits and retirement plan consultants to assist. Looking to expand payment options for customers? Your provider should offer merchant card services. Are you ready to buy supplies or do business overseas? You need a business banker who can take care of issuing trade bank letters of credit to make it possible.
The best way to know if you need more is to talk with your banker. Many new businesses miss opportunities to rise above start-up status because they don't ask for help. Some don't take the time to develop and share business plan with a banker when they need access to capital. Others operate their business from a personal account instead of a business account using up personal credit and home equity instead of building a credit history for their business.
Business is a team sport, and a full-service business banker should be in every company's line-up. The right financial services provider can be the key to helping your business reach the next chapter in its success story.
Chad A. Osorno is the northern Nevada regional president for Wells Fargo.