From Kelly Kendrick, First Bank & Trust Company:

With just over a month left in 2011, most of us are beginning to think of business strategies for 2012.  As a business owner, how can you continue to weather the current economic climate and come out on top?  Here are some tips that can give you a fresh perspective on your business in 2012.

Review your company’s P&L (profit and loss statement) and Balance Sheet monthly.   Realize the direct correlation between the two statements - an increase or decrease in one directly impacts the other.   

Examine your Cost of Goods Sold and your Operating Expenses on your P&L.  Determine where you can make adjustments in these categories to achieve a Net Profit.

Plan to use your cash inflow from Net Profit to fund a portion of your company’s growth; this will result in a greater company Net Worth (assets – liabilities).  Remember, company growth is not always a good thing when it’s only financed by debt.

Increase your company’s Current Assets such as cash, accounts receivable and inventory without increasing your Current Liabilities such as accounts payable, lines of credit, and current portion of long-term debt.

Manage by the numbers and make a commitment to your company to increase profitability and establish a strong capital position by increasing your company’s net worth.

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia. Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions. Comprehensive financial solutions are available through trust and brokerage service representatives. For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more from Kelly Kendrick and First Bank & Trust Company on Handshake 2.0.

Kelly Kendrick, Assistant Vice President, First Bank & Trust Company, is a client columnist for Handshake 2.0. First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, First Bank & Trust Company:

What’s the next big thing you can expect from your bank? 

Business to Business Automated Clearing House (ACH), Person to Person Automated Clearing House (ACH) and variations of these types of transactions will continue to grow.  Individuals and businesses like the security, speed, convenience of ACH and the knowledge that the money is being transferred and bills are being paid.

 
Mobile Banking is going to be a "game changer." It already allows a customer access to his or her account quickly through a fast-loading app on a smartphone, and mobile banking is convenient for monitoring accounts and moving funds.  Mobile Banking will eventually include Near Field Communication (NFC) Chips, allowing users to make payments with their smartphones instead of carrying credit cards. 

Banks are now offering their customers a convenient way to deposit checks from the comfort of their own offices using a Remote Deposit Capture machine.  The future of banking will allow customers to make check deposits through their smartphones via Mobile Remote Deposit Capture.  This product will change the dynamics of traditional bank lobbies, further reducing walk-in traffic.

The evolution of banks will provide all of us with increased convenience that will save time and money.

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia. Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions. Comprehensive financial solutions are available through trust and brokerage service representatives. For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more from Kelly Kendrick and First Bank & Trust Company on Handshake 2.0.

Kelly Kendrick, Assistant Vice President, First Bank & Trust Company, is a client columnist for Handshake 2.0. First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, First Bank & Trust Company:

Technology is changing traditional banking.  Trends show increases in online services and electronic banking and decreases in walk-in or lobby traffic.  According to a 2010 Federal Reserve Payments Study updated in April 2011, as a percentage of distribution of non-cash payments, traditional paper checks paid decreased from 32% in 2006 to 22% in 2010.  The same study revealed from 2006-2009 the annual growth rate was 9.3% for electronic payment transactions and 9.4% for Automated Clearing House (ACH) transactions.  The percentage of bills handled by bank bill-pay systems totaled 50% in 2011 according to a recent Wall Street Journal article. This percentage includes not only bill payments originated by the customer and the bank, but also by the customer and the company (ACH debiting the account for payment).

Technology enhances convenience for bank customers by saving time and money.  Banks that do not adopt or offer the latest technology may drive customers to the competition.  Technology allows customers to open accounts at banks that don’t even have a traditional branch within driving distance.  Bank customers can now make deposits without stepping foot into a branch. Account balances can be monitored and money can be transferred from a smartphone. Suppliers and employees can be paid without writing a check. 

Telephone banking, ATMs, credit cards, debit cards, Internet banking, online bill-pay, ACH payments, Remote Deposit Capture, mobile banking, person-to-person payments, social media payments, contactless payments and mobile commerce - these are all examples of how technology is changing traditional banking.  This trend does not only impact the banking industry. The way banks do business is changing to adjust to this era of high-tech culture and by doing so, they’re keeping in tune with the ever-changing needs of their customers.  Businesses across the board need to assess the opportunities and potential impact these trends can have on their businesses. 

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia. Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions. Comprehensive financial solutions are available through trust and brokerage service representatives.  For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more from Kelly Kendrick and First Bank & Trust Company on Handshake 2.0.

Kelly Kendrick, Assistant Vice President, First Bank & Trust Company, is a client columnist for Handshake 2.0. First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, First Bank & Trust Company:

If you’ve ever tried to make a purchase with your Check Card, you’ve probably been asked "Debit or credit?" Well, does it matter which you choose?  Regardless of how you process your transaction, the purchase amount is deducted from your checking account, no faster than if you had chosen the other option, right?

Yes, it does matter.  Here’s why:

Using your Check Card as a credit transaction, which requires your signature, is safer than using it as a debit transaction, which requires you to enter your Personal Identification Number (P-I-N).  Signature-based transactions (credit transactions) protect you from account hackers.  If you make your purchase as a debit transaction, a potential hacker has access to your account number AND your P-I-N. 

Additionally, processing a purchase with a check card as a credit gives you more protection when settling disputes.  For example, you receive protection and automatic reimbursement for fraudulent or erroneous transactions.  Debit transactions are “private network” transactions and disputes may take longer to resolve.

So, you’ve decided to skip the P-I-N and process your transaction as a credit.  Here's how to do that:

At the time of purchase, swipe your card and select the credit option.  Sign for the transaction and the purchase will be deducted directly from your checking account.  If you don’t see the credit option, tell the cashier it’s a credit transaction and he or she will process the sale as a credit. 

The next time when you're next asked, "Debit or credit?", you'll know why to answer, "Credit, please."

Photo by Kelly Kendrick of Caroline Salisbury, Credit Analyst at First Bank & Trust Company, signing her credit card receipt.

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia. Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions. Comprehensive financial solutions are available through trust and brokerage service representatives.  For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more from Kelly Kendrick and First Bank & Trust Company on Handshake 2.0.

Kelly Kendrick, Assistant Vice President, First Bank & Trust Company, is a client columnist for Handshake 2.0. First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, Assistant Vice President of First Bank and Trust Company:

As a business owner, you may make several trips to the bank each week. Some of the visits may be for personal reasons like getting cash or opening up a CD but the majority of your visits are for business purposes such as depositing your sales revenues. Your interaction with bank employees may be limited to the tellers who help you with these transactions. But whom do you talk to when you need additional capital to grow your business?

Starting a relationship early on with a bank loan officer can have many benefits and save you mission critical time.  Here are three reasons to seek and develop a working relationship with a banker before you have a need:

1. You already have someone you trust who knows you and your business.  The benefit to you is this person understands your vision and can give you banking options that fall in line with your plan.  Your banker already knows the answers the 5Cs of Credit questions about you.

2. You can bounce ideas off of someone in the banking field as you explore options.  For example, if you’re thinking of borrowing money for your business, you and your banker can talk about the effect the new debt would have on your income statement and balance sheet, thus helping you weigh options to make an informed decision.

3. Your banker will help you to know what to expect when you do apply for a loan.  When you’re ready to apply for a loan, you will know where your company is financially and you will have all the necessary documents ready that will be requested by the bank.

Regardless of whether you’re in the market for a business bank loan or not, most bankers are willing to share advice and to support you as a fellow member of the business community.  A good relationship with a banker can be a huge advantage to you as a business owner and can play an important role in your success.

***

You're invited to read about the 5Cs of Credit and more in The Basics of Business Bank Loans (.pdf) from First Bank and Trust Company.

First Bank & Trust Company was named to the Top 200 Community Banks by US Banker.  View the list in .pdf format here.

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia.  Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions.  Comprehensive financial solutions are available through trust and brokerage service representatives. 

For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more about First Bank & Trust Company on Handshake 2.0.  First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, Assistant Vice President of First Bank and Trust Company:

To help your business build a good foundation, as a business and for working with a banker, what you most need to know is where your business is financially and where you want it to go. Keeping good financial records, preparing a budget for your goals, and having room to adjust the budget based on unexpected changes will not only help you make good business decisions, but will also help you provide your banker with the right information to determine the best solutions and opportunities for your financial needs.

You're invited to read about the 5Cs of Credit and more in The Basics of Business Bank Loans (.pdf) from First Bank and Trust Company.

First Bank & Trust Company was named to the Top 200 Community Banks by US Banker.  View the list in .pdf format here.

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia.  Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions.  Comprehensive financial solutions are available through trust and brokerage service representatives. 

For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more about First Bank & Trust Company on Handshake 2.0.  First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

From Kelly Kendrick, Assistant Vice President of First Bank and Trust Company:

Whether you’re seeking a business loan, a car loan or a mortgage for your home, you probably question what factors will be considered by the bank during the approval process for your loan.  The basic criteria that banks use to evaluate your loan request for approval are referred to as the 5 Cs of credit.

1. Character - Is the customer dependable, honest, and reliable? What is the reputation of the customer? Does the customer have good credit history, indicating that they were willing to meet prior obligations?
2. Capacity - Does the customer have adequate cash flow to repay the loan or take on additional debt?
3. Capital - For consumer loans, what will the customer be contributing toward the purchase? For business loans, in addition to the contribution toward the purchase or the project, what has the customer invested in the growth of their company?
4. Collateral - What is the customer offering to provide additional security and mitigate risks of the loan?
5. Conditions - What are the current market conditions affecting the customer or their company?

The 5 Cs of credit may be a helpful tool in assessing your financial situation before you go to the bank if you may be considering applying for a loan.

You're invited to read about the 5Cs of Credit and more in The Basics of Business Bank Loans (.pdf) from First Bank and Trust Company.

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia.  Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions.  Comprehensive financial solutions are available through trust and brokerage service representatives. 

For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more about First Bank & Trust Company on Handshake 2.0.  First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

In Handshake 2.0's series on business bank loans, we asked Kelly Kendrick, Assistant Vice President of First Bank and Trust Company for self-assessment questions companies could ask themselves about whether or not a bank loan would be a good fit for them, and questions to ask a business loan bank officer about the terms of the loan.

For entrepreneurs with start-up companies, we asked Kelly Kendrick, "What are three pieces of advice you would give to a start-up business on deciding whether or not to apply for a business loan?"

Kelly Kendrick answered:

The challenge that start-ups face when applying for a bank loan is that the primary source of repayment - the start-up's business income - will not be enough to cover the loan.  Before considering applying for a business loan:

1. Make sure you have thought out and have on paper a comprehensive business plan. This plan should include what your bank loan would be used for and how it would help the business grow.
2. Invest personal equity into your company. As some like to say, "You have to have skin in the game." A bank will be hesitant to put its money in you if you don’t put your money in first.
3. Assess your personal financial situation.  To increase a bank considering your start-up an acceptable risk, does your financial situation offer any mitigating factors such as additional liquidity, a secondary source of income, or collateral?  If there are mitigating factors, the bank may feel more comfortable taking on the risk.  

For more information, you're invited to view The Basics of Business Bank Loans (.pdf) from First Bank and Trusty Company. 

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia.  Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions.  Comprehensive financial solutions are available through trust and brokerage service representatives. 

For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more about First Bank & Trust Company on Handshake 2.0.  First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

We thank Kelly Kendrick, Assistant Vice President, and Jim McAlister, Regional Manager and Senior Vice President, First Bank and Trust Company, for their photo of a "Handshake 1.0" for Handshake 2.0!

In Handshake 2.0's series on business bank loans, we asked Kelly Kendrick for questions companies can ask themselves on whether or not a bank loan is right for them.  If a company decides to apply for a loan, we asked, "What are questions a company should ask a business loan bank officer to make sure they understand the terms of the loan?"

Kelly Kendrick answered:

• Is the interest rate fixed (does not vary over the entire term) or is the interest rate variable (moves up and down over the term of the loan based on the changes of an underlying index)?
• How long do I have to pay the loan back? For a line of credit, this would be when your principal portion comes due, or matures. Up until this time you may be required to make interest payments on the loan. For an amortizing loan, where your payments consist of principal and interest and the principal is paid down as you go (the loan amortizes), you will want to know the amortization period. Typically, the longer the amortization period, the smaller the principal and interest payments will be, but you may end up paying more interest over the life of the loan. The type of loan and repayment terms will depend on the purpose of the loan and the collateral which secures the loan.
• Do the loan terms match the purpose? For example, a short-term liability should finance a short-term asset and a long-term liability should finance a long-term asset.
• What collateral will secure the loan? Collateral offers back up support beyond the normal cash flow and lowers the risk of loss on a loan for the Bank.
• What will happen if I pay late or can no longer repay the loan?

***

First Bank & Trust Company, one of the top community banks in the United States, is a diversified financial services firm with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia.  Financial objectives are addressed by offering free checking products for personal and business accounts, and assessing lending solutions managed by mortgage, agricultural and commercial lending divisions.  Comprehensive financial solutions are available through trust and brokerage service representatives. 

For businesses, First Bank & Trust specializes in business loans, business credit, and business finance.

You're invited to read more about First Bank & Trust Company on Handshake 2.0.  First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

Businesses owned by women are smaller than businesses owned by men. 

In a comprehensive article for the Wall Street Journal, Sharon G. Hadary examines what's holding back women entrepreneurs such that the latest data (2008) shows "average revenues of majority women-owned businesses were still only 27% of the average of majority men-owned businesses."

Why the difference in revenues?  One reason is that women-owned businesses are under-funded.  According to the National Women's Business Council (.pdf), all small businesses face challenges finding capital to grow. The amount of capital women business owners receive is less than that of men.

I have applied for angel investor funding, willing to share ownership of an enterprise to raise capital in order to start and grow it.  Failing to receive funding, my plan has been to muscle through and invest my company's profits into growth.

That's the very mind set that may keep my company small.  Hadary writes, "For expansion capital, most [women] turn to business earnings, which usually limits growth potential."

Oops.

Applying for a small business bank loan to start and grow an enterprise never occurred to me.  That's debt.

Hadary writes, "Research shows that women tend to view debt as a 'bad thing'... Research supports the idea that one of women's strengths is relationship building, yet women seldom focus on building relationships with bankers. Lack of relationships with bankers and limited knowledge about financial products and services explain to a great degree why more women don't seek more sophisticated forms of financial products and services."

Oops.

I was grateful to Kelly Kendrick, Assistant Vice President of First Bank and Trust Company, for answering for Handshake 2.0, "What are three questions companies can ask themselves to decide whether or not a business loan from a bank might be right for them?"

As a woman-owned business that intends to grow, these are questions I will now start asking and answering.

***

Photo credit: Mary Anne McElmurray

First Bank & Trust, a client of Handshake Media, Incorporated, the parent company of Handshake 2.0,  specializes in business loans, business credit, and business finance.