Leadership Tips – Small Business Requires Faster Decisions

Introduction

This leadership tip has something in it for managers everywhere, but it’s particularly targeted at those of you with large company backgrounds who have made career moves to smaller businesses that you own and/or manage.

My background is primarily in large scale management of IT organizations. The companies where I’ve worked were places where changing a process or behavior took some time. I always thought I was quicker than most, and action oriented. As a small business owner, I found I had to be much quicker.

I’ll offer this leadership tip in the form of a story. It’s a story of how taking your eye of the ball can cost you money, and worse than that can cost you customers.

My First Small Business

I opened a small personal services business. It was located about an hour from my home office, and with all my other commitments I knew how important hiring the right manager would be for this shop. It took a few tries, but I found one with a good background and references, and she seemed to quickly develop loyalty to the business and to me.

For the first six months we grew slowly but steadily. We were behind plan in terms of customers and revenue, but the trend was up. There were a few staff issues, but overall turnover was okay. I decided to invest a little more in marketing to try and get more new faces in the door.

Over the next three months, customer counts were mostly flat, and average sale was actually down a little. Concerned, I visited the shop a few times more than usual. The people were not as upbeat as they had been. When asked about that, they attributed their moods to less business and less enjoyment of the job. I wondered about seasonality, the economy, and whether I needed even more marketing investment.

Want to know what was really going on? My trusted manager had some personal problems that I had not been aware of before, and was exhibiting some totally unacceptable behaviors:

  • Criticizing staff in front of customers
  • Intimidating staff, letting them know they were at risk of being fired, and telling them I was out to get them.
  • Stealing money by voiding transactions and other means

The Damages

I’m still figuring out how much money all this cost me, but the money is only today’s problem. The customers I’ve lost are a more serious longer term issue, because many of them won’t be coming back.

When I figured out what was going on, I moved quickly to fire the manager. There were only two problems:

  1. I was too late, and there had been several months of damage done;
  2. There was collateral damage. I had to fire two other employees who had adopted the attitude and behaviors of the manager.

Today, I’m working on putting together data to see if I can assemble a case for prosecuting the employees and the manager. An even higher priority, though, is the work I’m doing to recruit and orient new staff and develop a recovery plan for our customer service reputation.
This leadership tip was a painful lesson that I hope never to repeat.

Tips on Setting Up Your Small Business Bank Account

One of the first things you will need to set up is a bank account. We recommend a large bank because:

They have locations everywhere

They have longer hours

They will probably buy out your local community bank anyway

If you are an owner/operator of a small business, you will appreciate having a Debit or ATM card for your business. They also have easy to read statements for merchant accounts, little or low fee checking accounts, locations in the grocery store, weekend banking, business credit cards (VISA or MC), small business loans, auto loans and leases, etc. If you run a lot of locations and are expanding your business you might even ask the local manager to fax you weekly confirmation of daily deposits made during the week.

When opening an account always ask about checking account fees, primarily deposits per check charges. Try to have these reduced or eliminated. If you wish to shop banks and fees, don’t forget to shop service. We recommend these ten tips when selecting a bank.

Make an honest list of the services you want and those services you really need and then interview banks to see which services they provide on your ‘shopping list’. Be careful at big banks. Ask for the branch manager and not the new accounts sales girl. Chances are she’s just out of college and doesn’t even understand real world banking relations or hand-shaking deals at the Rotary Club or golf course. She’ll be too ‘By-The-Book’ to answer any real questions.

Start seeking referrals from long standing community and business leaders. Perhaps a local CPA, home based business consultant or small business owner. Make sure you get advice from people you respect.

Geography is important, but it should not in all cases be the deciding factor. You should start with nearby banks.

Visit the bank. Are there long teller lines? Is the staff courteous? Do they smile, etc.?

Sit down with a bank officer and don’t be afraid to ask the tough questions: Do you really want our small company’s business? Are you interested in long-term relationships? Will I be able to work with a certain specific person on a continuing basis? Will you treat me like a number? What is your turn around time on loan applications? How many layers of management are there until I get to the president? What’s his or her name? Have you ever met them? May I?

Make clear exactly what you want and need from a banking relationship. Will you be looking for a loan soon? Like any other relationship, communication is the key to a good banking relationship.

Don’t fall for flashy ads that promise you stuff and they forget your name next week. You might even come back the next day and ask “Do you remember my name? If they don’t, smile and walk out.

Try not to be misled by free toasters or mouse pads if you open an account. These free items won’t help your car wash business thrive, but a good banking relationship can.

Remember, that a bank’s service is gauged by the service it provides, not it’s brochures, gimmicks, signage or billboard ads.

Evaluate the relationship when you have been with a new bank for six months. Honestly evaluate how things are going and share your conclusions with your banker. The best banking relationship is one where both parties are open and forthright and where issues can be discussed that will lead to a long-term mutually beneficial partnership for the expansion and betterment of your car wash franchise.

Check Ordering For Business Account

Why does ordering checks and replacement checks cost so much?

Because banks make a profit on the checks you order. For a little less than one-half the cost you can order your own checks and eliminate the middleman – that’s the bank. Call:

Current Check 1-800-426-0822;

Checks In The Mail 1-800-733-4443;

Deluxe Checks 1-800-4DELUXE

All three firms guarantee that their checks meet industry standards. We’ve ordered from all three. Deluxe is faster if you’re out of checks, but still have money left. They do cost an average of $4.00 more per box.

Interest Bearing Accounts

If you choose an interest bearing checking account, be sure to take a close look at the other associated fees. It may say it’s a free account with no fees and that it’s interest bearing, but if you fall below a pre-determined balance you may pay exorbitant fees or if you have high activity such as lots of checks written or deposited, you may be charged a fee anyway. If it’s a per check fee it will undoubtedly be higher than a normal basic account.

You should not pay fees on a business savings account if fees are charged for your checking account you may seriously want to consider switching banks.

Choosing a good bank for your small business is very important, please take this initial step in your business seriously, you’ll be glad you did.

Best Business Bank Account

Most people that have a business need a business bank account. You may be wondering with all the choices between banks which account is best for you. Some offer services that you need while other services are only “nice to have”, you may be looking for a free business checking account or a full service operating line of credit.

Regardless of what type of account you are looking for we know fore sure that banks love small businesses. Just look at the kinds of offers they have

  • Free for the first year
  • 0 rate APR on credit transfers
  • Free checking account

The reason many of these offers are only introductory offers is because banks are aware that if a small business owner begins working with 1 bank then they are unlikely to switch when they begin to grow. Even IBM had to open a business bank account when it was very small!

what bank account will be best for you, consider…

  1. Are you always carrying a positive balance. If you are always going to be carrying a positive balance than look for banks where you will be able to get a high interest rate on your deposit
  2. Are you often requiring a line of credit to make payroll? If this is the case look into accounts which have the lowest interest rate and no overdraft penalty.
  3. If you make a lot of cash withdrawals be sure to drive around your area and identify where the bank machines are for that bank.
  4. Online banking is becoming a default free option on most business banks but make sure that the bank you are going with offers a free online banking option as this is the best way to keep your costs down.
  5. Business advice – Some banks pride themselves on being partners in your business and will offer free business consultation. Depending on you and your business this may be useful. However, if you run a high tech niche business don’t expect your banker to be able to help forecast cash flow demand through product development. Don’t forget they work for the bank!
  6. Most likely you will want a credit card for your business and it makes sense to attach it to your business bank account. Make sure to understand the terms of the credit card and take that into consideration when selecting a bank. Some banks will give credit cards terrible terms and conditions because they know the entrepreneur will be putting more emphasis on the bank account compared to the credit card.

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