By Rita J. Lowman
Special to Live Local! magazine
Starting a business can be the fulfillment of the American Dream. But it is also a risk that should be carefully calculated. According to the Small Business Administration, more than half of new businesses fail in the first five years. The SBA cites reasons such as lack of experience, insufficient capital and poor credit arrangements as some of the problems that plague new business owners.
Starting a new business requires sound preparation and homework.
In addition to creating a strong business plan, new business owners need to give serious thought to finding a bank that can service their small business needs. While many entrepreneurs will invest personal money for their business, a business loan might also be needed. There may be SBA or other government-guaranteed loans the entrepreneur may consider. But to access any kind of small business financing, the entrepreneur needs a solid business plan, good credit rating, personal investment and collateral to present to a bank.
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Whatever the financial needs, it is important to recognize that one of the most important relationships a small business owner will develop is with his or her bank. Having the appropriate capital is a key element to a successful business. Therefore, this is one relationship for which an entrepreneur must give time and examination.
One place to begin is with other business owners. What banks do they recommend? Why? What types of services make them stand out from the others?
Business banks offer special features including night depository, online banking services, business checking, remote deposit and more. It goes without saying that the bank should also be FDIC insured.
In developing a banking relationship, both parties need a realistic bottom-line look at the numbers. Both should know the financial health of the bank and the company.
Confidence between the bank and the client will assist in building a solid business relationship, and it is key to helping entrepreneurs overcome the certain challenges encountered on the road to success.
Rita J. Lowman is chief operating officer for C1 Bank. For information on C1 Bank, visit C1Bank.com
Live Local! is a publication of LocalShops1, Tampa Bay's leading advocate for small businesses.