Do you know that the growth of your business hinges on your choice of banks?
If you don’t want to build your business with one hand and crash it with the other, you have to know how to choose the right bank for your business.
“I’m not a loyal banking customer” – Kristin Wong.
Kristin, in Signs It’s Time to Leave Your Bank (and How to Choose a New One), said she spent five to six good years changing banks.
But with this post, you don’t need to jump from one bank to the other like Kristin. This guide will show you how to choose the right bank for your business.
As I said earlier, jumping from one bank to the other may not be the best strategy.
Kristin should have set out some criteria based on her business needs, assess every available bank, and pick the one that has the best service or product to offer her.
You can take a look at the video below to hear Bill Lang’s five key factors to consider before choosing the right business bank.
In the short video, Bill made some interviews and got other people’s views on how to choose the right bank for your business.
Now to business, let’s use Nigerian banks as a case study.
How to Choose the Right Bank for your Business in Nigeria
Most people think the best banks are the ones with a large customer base or the ones that send their representatives to public places such as markets and bus terminals to market their services.
If you like banks that bring their services to your doorstep, you should be able to take your time to assess their services to see the one that is most favorable for your business.
If a bank has a lot of customers without value or the strength to manage their customers’ business needs, that alone is a reason to find the right business bank.
Most banks in Nigeria with a large customer base are not user-friendly.
Majority of their customers still visit micro-finance banks to meet their business needs. Though that does not mean micro-finance banks are better off.
But at least, with the kind of financial services small business owners get from micro-finance banks, they stay longer in business.
A business that is on the verge of closure might still last for another one or two years relying on a micro-finance bank. But that doesn’t guarantee the business will survive if it gets no better aid.
The point I’m making is that a banking relationship is not just about accounts opening, and getting funds, but getting the best that will help a business grow.
So, if you want to know how to choose the right bank for your business, consider the following factors in every bank that is available.
Value Added Service of a Business Bank
Some banks are good for small businesses while some are only good for big industries or personal banking.
Those that are good for big companies might not take you seriously if millions are not flowing through your business account.
That’s why you will see some customers walking straight down to the bank manager while you’re wasting your time queuing up in front of a teller.
So, when you don’t consider value while choosing a business bank, your business might go down the primrose path.
Against this problem, you need to get insight into the service different banks offer in other to know which bank will add value to your business.
Accessibility Level of A Business Bank
Your access to your bank is not only through its physical location, but also through its digital channels.
A bank may be close to you and you’re not getting the service you need. Maybe the officer in charge is always on the field.
There must be other means to reach your bank than going there physically. That concerns an effective use of online banking.
Find out how easily you can reach your bank.
Is there a functioning website, email address, mobile phone number, social media page for effective communication? Does the bank reply emails, pick live calls, give you audience when you seek attention?
You can’t ignore all this and expect good banking relationships with your bank. Let your findings about each bank help you on how to choose the right bank for your business.
Costs and Service Charges of a Business Bank
Your research should also look into the fee structures of each bank.
Try to compare and contrast how much each bank charges on processing credit or debit cards, using ATM, POS, online banking, live chart, statement of account, cheque book, commission on inter-bank transactions, utility bills, and so on.
Before you can say a bank is right for your business, the cost of using the bank must not be overwhelming. If you will need a loan down the road, find out first what each bank charges.
The reputation of a Business Bank
If you have no prior banking relationship with a bank, don’t believe the sweet conversations you have with its customer representatives completely.
Engage other potential customers who are also small business owners in a discussion to get the actual fact about their experience with the bank so far. This is to know if the bank can really offer its promises.
Conclusion on How to Choose the Right Bank
The need to consider these factors would guide you on how to choose the right bank for your business. And to also ensure, your banking relationship doesn’t have an adverse effect on your business.
As a good entrepreneur, using a bank that puts its customers first will help you boost your business growth and safeguard your reputation.
If you tell a supplier his money will be ready in two hours time and that doesn’t happen in a week’s time, it leads to a misunderstanding between you or even gives you a bad name.
So, you need a reliable bank to protect your business image.