Learning to Live with (or Without) Your Banker

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Although the nature of Fernley's business -- it manages 24 national trade associations and doesn't "commingle funds" says Fernley -- virtually necessitates a multiple-bank habit, many entrepreneurs operating in a single location practice multiple banking as a precaution. Fred Armstrong, who runs Armstrong/Robitaille, an $80-million business-insurance brokerage firm in Tustin, Calif., says, "We've always taken a prudent approach because the money we have in deposits is not ours." The firm has relationships with three or four banks as well as a couple of brokerage houses. April Morris, president of Associated Engineers, a $5-million civil-engineering company in California's Inland Empire, has never kept more than $100,000 in any one bank because anything more than that amount isn't insured. She currently uses seven savings banks and keeps $400,000 in one account to flow payroll through: "We just flush money in and out of that account." It's not a hassle, she says, because couriers visit her company three times a week to pick up accounts receivable.

Consultant Glenn Ebersole thinks it's "absolutely critical" to use more than one bank, more for competitive than for security-related reasons. He currently uses three banks to handle the financial needs of his $200,000 consulting firm, J.G. Ebersole Associates, in Lancaster, Pa. "It keeps things competitive when they know they're not the only one I'm talking to," says Ebersole. A little over a year ago the number two person at one of his banks approached him and said, "I will never lose a deal because of an interest rate." The bank made good on its claim: several months later it brought to Ebersole's attention a special line of credit with a 3.99% interest rate that "is still in effect," says a clearly pleased Ebersole.

3. What Has Your Banker Done for You Lately?
If your banker doesn't network for you, show you how to save costs, and treat you with the respect any customer deserves, you should consider finding another bank. Your chances of finding one that does all of the above -- unheard of even a few years ago -- are now better than ever. "Banks are slowly beginning to realize that they're just another vendor and that they wouldn't get away with their behavior if they were in any other profession," notes banker-turned-entrepreneur Stephen Davies.

Janis LeBude, who runs Protocall, a $20-million firm in Voorhees, N.J., that finds staff to handle home-nursing, therapy, and business needs, illustrates Davies's point. LeBude's bank regularly uses her company's staffing services to meet its temporary-personnel needs. "When we select a bank, one of the criteria we look at is if we can give each other business. I try to do that with all my vendors," says LeBude. Karen Selley, CEO of CMT, a $3-million provider of physical-, occupational-, and speech-therapy services and #225 on the Inc. 500 in 1994, recently switched from her bank of 15 years because it lacked what she calls "a mutual-customer-service philosophy -- treating each other as each other's customer, rather than having our bankers believe we're begging them. Small businesses don't have to put up with the hassle. We're their customer," she stresses.

The fact that most loan officers now call themselves relationship managers is a hopeful sign that Selley's message may be sinking in. Citibank's Denise Qualls spent a recent morning learning more than she ever wanted to know about social-security regulations, making phone calls and writing letters on behalf of a company owner from India who needed a social-security number to get a tax-ID number and open a bank account for his business's new Bay Area branch office. She says she routinely performs services that do not generate income for the bank or help her meet her sales goals, often for organizations that are not current customers. "They might not be my customers today, but they may be a year from now," she says. "That's happened."

Banks are going to ever-greater lengths to keep small-business customers happy. Consider the case of Randy Rolston, CEO of Victorian Papers, a $5-million mail-order catalog and two-time Inc. 500 company in Kansas City, Mo. When Rolston complained to his banker that he was being eaten alive by the 12¢ to 20¢ handling charges on each of the 300 to 400 checks his business was processing daily, his bank suggested a money-market account that enables him to write and process checks for free. Rolston's savings? From $60 to $70 a day.

Remarkable as it sounds, some banks don't wait for customers to complain or ask for things; instead, they anticipate their clients' needs. Carole Petranovich, CEO of Computer Corner, a $5-million computer retailer and service provider in Albuquerque and #196 on the Inc. 500 list in 1994, loves the fact that her bank does "collection services for me over and above the call of duty." Not only does it alert her to bounced checks from her customers, it calls the bank on those checks, finds out if money is available, and then advises her what to do. "That kind of extra customer service is what it takes today," says Petranovich.

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