(This is the last in a series, Understanding Women & Money. Start with Part One here)
The onslaught of pink for everything from power tools to business boot camps is a sign that brands want to connect with women. But is it meaningless or transformative?
The answer to this varies and women business owners are far too savvy to fall for a transparent marketing ploy with no real depth. They can easily discern when a focus on women truly matters and when it does not.
According to Mark Martinez, Executive Vice President and Chief Credit Officer at Horizon Community Bank, it’s not about the color, or the fact that something is “tailored to women.” It’s not even about women working with other women – it’s simply a desire to work with bankers and other financial professionals who take time to understand their needs, desires and goals. It’s about finding partners who are trustworthy and consultative, not condescending, so they are comfortable in the relationship.
“Don’t pander to me; I don’t care about specialty products for women, I just want competent, knowledgeable partners who take me seriously.”
They’d rather be viewed at the same level as their male counterparts, without special treatment or hand-holding. Some women might feel differently, but for many it’s a non-issue. They’re 100 percent business and to them, it should be gender neutral.
So how can a businesswoman be smarter about financial literacy? Martinez has a few tips to share.
Know thyself & delegate
Most people start their own business because they’re extremely good at something. They’re pursuing their talent and doing something they love.
Some are financially astute and some are not.
In every business, owners juggle a million tasks and are better at some things than others. Marketing. operations, customer service, sales, inventory, logistics… everyone has their own particular strengths and weaknesses, and finance is a weak area for many.
One of the smartest moves any woman can do is an honest self-assessment to understand what she is good at and what she is not. This allows her to staff around her own weaknesses or surround herself with good consultants to fill the gaps.
When it comes to choosing a banker, it’s important to avoid working with a loan officer who is just an order taker, or filling corporate product quotas. Instead, find a banker who will ask questions and dig into the many layers and complexities of your business. By looking at reports, studying cash flow and recognizing cycles or trends, a banker can understand it deeply enough to make solid financial recommendations.
This type of relationship encourages “Right Financing,” which connects financial need with a business’s long-term goals, strategy and vision, rather than the typical standalone borrowing decision. This can be pivotal to success. It also helps a banker separate cash flow from revenue to understand a business’s true financial picture.
At Horizon Community Bank, for example, a borrower might come into a branch seeking a business line of credit. She has revenue coming in and earnings are high, but never seems to have cash on hand for short-term needs like inventory and payroll.
Some bankers are happy to simply take the application for a line of credit, but a right finance banker might ask enough questions to uncover the problem isn’t cash flow at all, and a line of credit would be the wrong choice. Perhaps she is tying up cash in excess inventory, compounded by net 60 terms for accounts receivables and a lack of collections processes that bogs down revenue. Instead of a line of credit loan, managing inventory and improving efficiency in accounting would completely eliminate the need for credit.
In this type of common situation, the best solution didn’t involve a loan at all, but instead a closer look at business operations. The bank might not have opened a new line of credit for their customer, but it certainly established the beginnings of a rock solid long-term relationship based on a true partnership.
Without a willingness to delegate finance by opening the kimono on financial books AND operations when seeking expertise from their banker, this business would have paid for credit they didn’t need, compounding their inefficiencies and cash flow issues.
Finance and operations might have been her areas of weakness, but finding the right partner who could look at both filled the gap and fueled business success.
How to identify a right finance banker
So is your current banker an order taker or a Right Finance partner? Martinez says it comes down to three things.
- When is the last time your banker visited your place of business? If they’ve never taken the tour, then sat down with you to understand what you do, your cash flow, and how you accomplish what you do, then they just might be an order taker.
- Does your banker call to discuss the financial reporting you periodically provide? If they aren’t interested in what it reveals, what is trending and offer advice, they just might be an order taker.
- Has your banker ever made specific recommendations on how to restructure your debt structure, or improve cash flow and business credit history? If not, they’re an order taker.
Whether finance is an area of weakness or not, having a finance partner who knows your business, is responsive and can talk about what truly matters to your financial condition is essential.
Interestingly enough, we came across a statistic just this morning in a bank industry newsletter stating, “Research by Instantprint of small businesses finds that 56% of female business owners say they are dedicated to the business versus approximately 40% of their male counterparts.” If you’re one of those intensely dedicated businesswomen, you’re also probably one of the same ones who don’t care about pink, just results.
We hope you’ve enjoyed our April dive into women and money to celebrate Financial Literacy Month. The emotional meaning of money, viewing money as a tool, understanding yourself enough to use money as a tool instead of a panacea for emotional upheaval, common money personalities and how they impact spending… we’ve explored a variety of ideas this month as we look deeper into how women perceive and handle money.
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This is the last installment of a four part series exploring women’s attitudes around money and how this impacts business, including insight from several local experts. Start from the beginning here with Part One.
The opinions in this article are those of its author and people interviewed, and do not reflect the opinions of Horizon Community Bank or any employees thereof unless directly stated.