One of the biggest let downs in an entrepreneurs life occurs when his banker suddenly decides the time has come to part ways. For the business owner this often precipitates a crisis as his overdraft is summarily recalled. His usual response is to throw huge amounts of emotion at the problem, demanding meetings with his manager to impress upon this worthy individual the value of the relationship - past, present and future. Usually this comes to nought, and the entrepreneur leaves - cursing the bank and swearing never to return. And even vowing to set up websites committing to trashing that bank. [I know - I have been there!]

The reason for this massive disillusionment is the fact that we little guys like to think we have a relationship. And we like to think that this relationship transcends normal business boundaries. But ask yourself how much leeway you're going to allow one of your own debtors who looks a tad dodgy? Chances are you're going to be just as concerned about this relationship - especially when you learn about stuff that he isn't telling you directly. And that concern is purely about whether you are going to be paid.

Business relationships make for strange bedfellows. Most of us are frightfully scientific and logical in our choice of bankers, aren't we? Usually our choice is based on who will lend us the most money when we start out; or who is most convenient to our office; or who we've been banking with since college; or who our parents banked with! What a basis for determining the future relationship. And then we extrapolate our past experiences into a gloriously blissful banking future where we can rely on the goodwill of our banking buddies...

Wake up, and smell the banknotes mate! Firstly, you cannot develop a personal relationship with an institution. [That's one of the reasons why I choose to work with as many smaller suppliers as I can, because personal relationships can only exist between individuals.] Secondly, any relationship you think you have is probably based on the individual activities and support of one or two individuals within that institution - and they will be moving at some time in the future - and when they go, so does your relationship.

Thirdly, banks have become much cleverer in determining your risk profile. Imagine your bank seeing two or three businesses closing down [and owing them big overdrafts]; and imagine that those businesses are similar to yours; and imagine that they're in the same city as you - wouldn't your banker be suddenly very wary of lending you money? Right now the major banks have intelligent software running that matches you with what's happening in lots of other businesses - and when they see a risk developing they'll be the first to ask you to repay your overdraft - even though you may have run an exemplary account thus far. It's not personal - it's business. And that's what distresses us the most - especially those of us who have spent time and effort in building our banking relationship. We forget that a business relationship - by its very nature - is only about money!

What's the answer? I don't know, but a few insights hammered home this past week. The brand loyalty I have towards my primary bank is based on a relationship I had with an individual manager more than 10 years ago - and I have stayed with them despite an increasing range of challenges and poor service. Why? Maybe it's a case of 'better the devil you know'. And the reason I hate the bank that I hate the most in the whole world [if you've attended the CrashProof seminar you will know which one] is based on the behavior of a few individuals who were aggressive way back in 1992 - and who no longer even work for this bank! The folk I have met there since are just as nice [or not] as any of the other banks. Yet I cling to my old prejudices. Isn't that sad? Maybe it's time to be a tad less emotional?

The result of all these mindgames is that we tend not to look at our banks objectively. We tend not to compare them to others. And we tend not to look at banking alternatives until it's too late and our bank has already started bouncing our cheques. [That single act ensures that nobody else is really interested in you - which may be why a bank uses the bouncing technique so effectively to limit your options.]

If you can lose the emotion we attach to money - then conceptually your banker is no different than your stationery supplier. Waltons supplies stationery and services related thereto; while Standard Bank supplies money related services. Only the product differs. I have yet to meet a person who gets emotional about Waltons!

Bottom line - reevaluate your thinking about your bank. Unlike your spouse - a banking relationship isn't for life. If you think you have a relationship with the bank, as opposed to an individual - then can I discreetly share with you that the tooth fairy is still doing her rounds...?

© Peter Carruthers, www.petesweekly.co.za

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