Primarily when opening or operating a business, a large part of what is involved is financial management. There is no way to do this without being comfortable with the bank that you chose to work with. Most importantly one needs to choose a bank that caters to all or at least most of the companies needs.
From the word ‘go,’ before the searching process even begins one needs to comprehend what they need to begin with. Do you need a simple business checking account? Or a more complicated line of credit? While in the process of answering these questions, you also need to consider future needs. Will you require a loan or an overdraft in future? Will the bank be able to handle the potential growth of the company? At the end of the day no one starts a business with the intention to close it in a short period of time, looking at the future is a must for everyone.
Once you have your needs clearly set out, looking for a bank match that provides all those services becomes pretty simple. The review process begins. What are the fees for particular services? Many times banks will advertise that there are no fees on certain services to attract customers, many times there are certain services not available to these customers. For example in the case of entrepreneurs starting out, you will probably need access to your accounts online, but many African banks charge for online banking for business accounts while they don’t for personal ones. It is also important to compare all the services and not to settle on the first bank you review.
Another thing that deserves serious evaluation are the loan services available. In the eventuality that your business starts to grow, requesting a loan from a bank is almost inevitable. Big banks offer great rates but they usually have strict regulations about who qualifies for a loan and who doesn’t, compared to smaller banks or community banks that are more likely to look at each business individually. Additionally African governments more and more are guiding policy towards the growth of small and medium enterprises so these smaller banks usually have a lot of tax breaks which the bigger banks don’t. This in turn will affect how much they charge you for their services.
To sum it all up, choosing a bank is a complicated and serious process. Finding the right bank could determine your companies’ stability and viability. When you do find the right bank it should be a relationship that you nurture, as you would with any customer or partner.
Photo Credits: rodefermoss.com, Getty images