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Using Your Bank to Navigate the Small Business Landscape

3 Mins read

As business owners and consumers alike worry about the near-term economic outlook, worker shortages and other challenges associated with owning a business, U.S. small business confidence fell to more than a 10-year low in April. In their April 2023 report, the National Federation of Independent Business (NFIB) stated that the Small Business Optimism Index decreased by 1.1 points to 89.0, the 16th consecutive month below the 49-year history of 98.

In times of uncertainty, trusted advice from a qualified professional can be a lifeline for business owners, but many are unaware of the advice and solutions their banks can provide to help them become financially resilient. Banks are much more than just checking accounts; they offer strategic advice to help owners operate their businesses and continuously evolve their tools and technology around the needs of clients. A strong relationship with a bank will keep small businesses competitive and allow them to operate more efficiently.

What Can Your Bank Do for Your Small Business?

The submission of small business applications reached five million in 2022, just behind the 5.4 million applications filed in 2021 – the most popular year on record according to the U.S. Census Bureau. Yet, cash flow is the main reason a small business fails, coupled with staff shortages, increased expenses, and shrinking revenue streams. According to a U.S. Bank study, 82% of businesses that failed cited cash flow problems as a factor in their failure.

What many may not be aware of is the wealth of expertise and services their bank can offer to help them successfully operate and grow even in the most trying times. Among other benefits, a strong relationship with a bank can keep small businesses competitive by helping them:

  • Maintain full awareness in rough market conditions and weather any phase of the economic cycle, keeping a pulse on current events and offering historical insights, forward-looking considerations and actionable advice tailored to business challenges and goals.
  • Remain nimble and agile in an age of emerging technologies, from digital payments and embedded banking to tools powered by automation and machine learning.
  • Uncover the solutions needed to grow and scale their business, whether related to material needs like financing, or more topical issues, such as strategies for building a brand to create customer loyalty or improving employee experience to foster talent acquisition and retention in a tough labor market.

It All Starts with a Question

As no two businesses are the same, maintaining a strong relationship with your bank can lead to solutions and strategies tailored to the unique needs of your business—whether related to cash flow, payments, or other operational considerations. As members of the community themselves, Relationship Managers at regional banks are especially adept at identifying and offering the insights and services that local businesses in their communities need to thrive.

Regardless of where your relationship with your bank currently stands, there are a few key questions to ignite a conversation that sets you and your business on the path to success. By taking time to meet with your banker and ask things like, ‘what can I expect from my relationship with you?’ or ‘how can I best prepare for our meetings?’ you create a trusted bond and collaboration with your Relationship Manager from the beginning.

The Importance of Small Businesses

Demand changes as the economy does, so certain businesses can struggle to keep up. This ebb and flow can cause owners to see a decrease in revenue, making it hard for them to pay creditors or their staff. However, small businesses are incredibly important for the U.S. economy and have consistently played a major role in economic growth as they create many jobs. According to the SBA, as of 2022, 33.2 million small businesses exist across the country, employing more than 61.5 million people.

As small businesses continue to grow and evolve, it’s crucial for owners to lean on their bank – treating them more as a business teammate. Every day, bankers have a goal of helping their small businesses run better and more efficiently. KeyBank’s group of Relationship Managers serve as trusted advisors and financial strategists, providing owners with advice based on industry and financial expertise.

KeyBank’s Small Business Check-In takes small business owners through a three- to five-minute series of questions about the state of their business and where they are on their financial journey. Once completed, small business owners can schedule an in-person meeting or phone call with one of Key’s local bankers within their market to evaluate and provide a personalized, advice-driven conversation.

There is never a wrong time to set up a meeting with your banker, they can be one of your most important assets. Be sure to utilize their expertise on everything from customer loyalty and employee experience to business compliance and security & risk management to provide tailored solutions and guidance to help you achieve your goals.

About the author: Kristyn Squires is the Head of Small Business Banking, SVP at KeyBank. She may be reached at (216) 689-8773 or kristyn_m_squires@keybank.com. All credit products are subject to collateral and/or credit approval, terms, conditions, and availability and subject to change. KeyBank is Member FDIC. LOANS, LINES OF CREDIT, AND CREDIT CARDS ARE NOT FDIC INSURED OR GUARANTEED. © 2022. KeyCorp. CFMA #230525-2097579

Bank stock image by Zivica Kerkez/Shutterstock

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