Familiarizing a company's banker with its industry.
In February we published a table in this column ("How Companies Interact with Bankers," No. 02921061) showing how six companies keep their lenders abreast of what's happening in their businesses. But it struck us there's another side to interacting with bankers, perhaps best described as educating them. So we asked some company owners how they teach bankers about their businesses. Here are some of their techniques:
* Insisting on a site visit. "It takes persistence," says Rick Clinton, founder of Intellipro, an educational-software start-up in New Brunswick, N.J., "but we finally got a banker to visit the company. We walked him through our product demo and explained why our products were different from others. We made sure he understood every number in our budget and how the money would be spent. And we got the $60,000 we applied for."
* Sending mail (lots of it). "Besides the numbers, we try to give our bankers a sense of our vision for the business," says Mitchell Goldstone, president of Thirty-Minute Photos Etc., in Irvine, Calif. "One of the ways we do that is through our mailings. Every three or four weeks we send out customized mailings to our customers -- brochures about sales. We'll send the same mailings to our bankers so they know we're thinking about opportunities to generate money."
* Sending samples of what you make. "I try to make my banker feel as if he's a partner," says Drew Santin, president of Santin Engineering, a $3.6-million product-development company in Beverly, Mass. "Whenever we get a new machine, I go out of my way to show the banker what it does -- even if the bank wasn't involved in financing it. I'll send him samples of what the machine makes. I want to give the bank a feeling of security, so it will respond when we need it."