Tuesday, February 17, 2009

The Banks

This is just a quick post because I'm swamped! Sorry I have been neglecting this blog lately, it's the silliest time to be letting posts lapse, just when the number of people enquiring about starting a business is on the up and up.

I just wanted to express something very, very important.

The Banks Are Not Saying No

I could just strangle the media. Scaremongering to sell papers, because it's a recession, they need to keep their jobs and so they need to keep selling papers/ad-space online. There are a few voices of reason out there but the majority of news bulletins that the masses listen to/read/watch are all very negative, doom and gloom. As a result, many people are not approaching the bank for a simple overdraft facility to get them up and running, or even a small business loan to get a new premises kitted out. Why? Because - well, what's the point? They'll just say no. Try it. Please. It will be worth it. They are still open - especially for businesses.

I have heard from a lot of positive people who are excited to be finally started that business they were always thinking about (recession = little push they needed), that the banks are saying yes, within reason. If you are not asking for a massive business loan, Branch Managers have the authority to approve applications. That means it doesn't have to go to Credit Committee up in The Big Smoke. I'm talking about something less than €30k here. Statistics (I know, I know) say that on average it costs just under €25k to start a business. When you think about ALL the businesses you could start - from window cleaning to high tech software design - a €25k average is pretty great. If you have even a small redundancy package, approach your bank with a clear, concise business plan and see what they say. What's the worst that could happen? If they say no, you're in exactly the same place as you were before you went in, no big swing. If they say yes...

Good odds. I'd give it a whirl.

So who to go to?

It is vital that if you are thinking about starting a new business, you think about the finances. Approach your bank, the one you already have an existing relationship with. Business is ALL about contacts and relationships, so rather than start an uphill battle with a whole new person/institution - give your old reliable a try.

That said, if they high-ball you with interest rates, fees & charges, go elsewhere. Don't be afraid to shop around and go back to you existing bank, letting them know that you will swap your allegiance to suit your new pinched purse strings.

On a serious note...

If they do say no: ask them why. Don't waste your visit. They might have a very good reason for not supporting you to start a business that they are pretty sure will fail. Nobody wants to see any more of that! If they don't want to risk their money - why should you? Are there things they're not telling you? Why not ask? Perhaps - for example - let's say you want to open a certain type of shop on the corner of a certain street in your village or suburb. The bank says no. Don't take it personally!! Please don't walk away taking nothing from the meeting. Ask, why? What do they know that you don't know? The truth might be that there has been a long string of businesses who tried to start a retail unit there, but they kept failing, time after time, no matter what the product/service. Perhaps it has terrible parking, so there is a low footfall. Perhaps they know of three other similar businesses about to start down the road, and they know that the local market cannot sustain another one?

What I'm trying to say in a rambly way...was...keep all your doors open, talk to all your contacts, learn as much as you can from everyone that just might come in useful... And remember - the BANKS ARE NOT CLOSED!!! Go for it.

This was meant to be a quick one...sheesh!

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