As all banks know, working with their small business customers isnâ€™t just about lending money. Business owners, especially new ones, will look to their bank as one of the go-to sources of advice about many aspects of running a small business, and one of the most essential things they need to get to grips with is working capital.
Briefly, working capitalâ€™s what cash a business has each month to cover any expenses. So itâ€™s easy enough to explain. What youâ€™re looking to do is illustrate to your small business customers how to apply it to their business on a daily basis. Even if a business is profitable, there might still be working capital concerns.
And of course, the goal of all business owners is to improve their working capital, so theyâ€™ve got more cash to grow their business.
Once your customers have got to grips with what working capital is, the next step is learning how to improve it. And as a bank, there are some simple tips you can provide them with that can become fundamental processes in their business.
What youâ€™re looking to do is reduce any working capital jitters your small business customers might have by helping them to fully understand what working capital is, how much their business needs, and ways they can continually improve on it. Once theyâ€™ve learned how to effectively manage it and have put these simple processes in place, itâ€™ll become second nature to them, so that they can then focus on growing the business and increasing profitability.
And thatâ€™s definitely the kind of happy customers banks should be striving to achieve.