Pub. 1 2011-2012 Issue 1

26 Don’t Be PENNY WISE By Scott H. Parkinson, Senior Vice President of Retail Banking M any small business owners in Utah may have tunnel vision when it comes to selecting a banking partner. A survey of 250 Utah small business owners conducted by Bank of Utah revealed that many companies select their financial intuitions based on price. It’s understandable in today’s economy that business owners and operators of charter schools may be watching their pennies, but interest rates on loans, deposits and fees are only a small portion of the criteria that you might use to give a bank your financial business. To operate a successful charter school, you have to run your school like a small business. And, your banking partner can play a big role in helping you shape your success. If you are shopping for a banking partner, it’s smart to think long term and approach choosing a banker like you would select your CPA or attorney. All three should serve as trusted advisors over the life of your charter school, to guide you through the ups and downs of this difficult economy and beyond. Parkinson recommended asking a few basic questions to help find the best financial institution for your needs. WHAT KIND OF REPUTATION DOES THE BANK HAVE? The bank that advertises the most or that has the most brick and mortar locations may not be the bank that is best suited to back your enterprise. It is more important to find out how long the banks you are considering have been in business and check on their financial health by looking at annual reports or at a number of third-party online rating services. DO YOU CONNECT WITH YOUR BANKER AND DOES HE/SHE TAKE AN ACTIVE INTEREST IN THE FINANCIAL HEALTH OF YOUR SCHOOL? It’s nice to deal with a friendly face at a bank, but, it’s even more important to find out if they provide personalized counseling to help you take advantage of growth oppor- tunities, and identify possible problems and recommend solutions. Take a step back and ask yourself if the banker is relationship oriented or transaction oriented. A good banker takes the time to meet and work with you on your financials. Experienced bankers see hundreds of scenarios and can provide a different point of view and insights into any situation. Just like visiting your doctor for an annual checkup, your school administration should be meeting with their banker at least once a year, for a financial check-up. DOES THE BANK HAVE ALL THE EXPERTISE NEEDED TO HELP MOVE YOU FORWARD? Check to see if the bank has a full tool kit of services and experts to help youwith every aspect of your operation: cashmanagement, lending, business planning, mortgage, trusts and investments, business succession and continuation planning, and cost-saving employee benefits such as Health Savings Accounts. Your banker should also be up-to-date on the full array of small business lend- ing products. A truly engaged banking partner will also help you develop a “debt strategy” that will use credit efficiently in your business; recommending themost appropriate use of a line of credit and checking to see if the fees are appropriate for the planned use. IS THE BANK ACTIVELY INVOLVED IN THE COMMUNITY? One way to find out is to attend local chamber of commerce meetings or other service organizations in order to meet bankers who are involved and share your common interests. If the bank supports local charities and civic efforts you know their heart is in the right place. Ask some basic questions and think “long term” before you commit POUND FOOLISH and