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Small Business Banking Tips from the Game of Baseball

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America's pastime on successful partnerships with financial institutions

For centuries writers have been using the game of baseball as a way to start conversations about many aspects of life, from business to the arts to relationships, and small business banking is no different. Baseball teaches us to put the right financial team on the field, develop a financial strategy, communicate effectively with our financial institution and make changes along the way.

The right team

Good small business banking begins with having the right team. The financial institution that one partners with will make all the difference.

"In making the decision, it is pertinent to consider not only your business's current needs, but its potential future aspirations," explains Inc. magazine. "That's especially true if you're anticipating being in the market for a loan over the next few years. Because the bulk of small business loans come these days from smaller community banks, it is advisable to establish a good relationship with your bank before your business needs outside capital."

Develop a strategy

Just as baseball managers and general managers develop an overall approach to a season, small business owners can think strategically in their approach to banking.

What are the company's short- and long-term goals? If simple business savings and checking accounts are most important right now and for the foreseeable future, keep an eye on fees and interest rates.

Future growth is important too, so keep in mind that local and regional financial institutions are well known for supporting local businesses.

"Research shows that small banks are more likely than large institutions to issue loans to businesses in their community," Inc. adds. "In fact, though small and midsize banks control only 22 percent of all bank assets, they account for 54 percent of small business lending, according to Federal Deposit Insurance Company data from the third quarter of 2009."

Communication is key

Baseball is a game of necessary communication. Managers and coaches set team goals and tell players what's expected of them, and catchers and third base coaches deliver signs.

Companies can take a similar approach to working with their financial institution. From opening an account to revisiting their banking strategy down the road, communication is key.

"Remember, as a potential customer, you have the right to ask for exactly what you need," Inc. advises. "If that's free online banking, make that clear to your community bank manager. Or, if you're willing to pay for certain services but need a representative to be available on a monthly basis to counsel you, let them know that upfront."

Don't be afraid to make changes

Need to bring a new pitcher out of the bullpen or perhaps a pinch hitter or runner off the bench? Baseball managers and business owners alike can find success by instituting changes.

When it comes to small business banking, once a business is off the ground and running, it might be time to start a reserve fund and a new account to go with it.

"[Y]ou will need a reserve fund to keep you functioning during those periods of time when cash flow grinds to a halt," notes Your-Small-Business-Guide.com. "It is very difficult for small business owners to do this because there is always something you need to spend your cash on, but you will be glad you did it. Your mom was right—it is good to 'save for a rainy day.'"

Adding an investment portfolio is another change that small businesses can consider, although experts say this should be done in the simplest way possible.

"You take plenty of risk in your business; as an investor, you should keep it simple, spread your eggs among many baskets, keep fees and taxes low and tilt the odds in your favor with indexed mutual funds and exchange traded funds," the New York Times states.

No matter what kind of relationship you are looking for from your financial institution, keep these baseball lessons in mind. They could go a long way toward building and maintaining a successful business.

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