Many people have an assumption about a common money practice that they may need a second look.
It’s a simple concept that not many people know about.
DON’T MISS: Dave Ramsey wants parents to stop one money habit that can hurt their kids
Personal finance person Dave Ramsey recently settled the advice seeker’s dilemma about a banking solution for his small business.
The guy who said his name was Matt wrote “Dave” KTAR News In Phoenix, Arizona. “As a small business owner, should I work with multiple banks to avoid what happened to Silicon Valley?”
In response, Ramsey first outlined his thoughts on the Silicon Valley bank collapse.
“You have to work with several banks, but this has nothing to do with Silicon Valley,” Ramsey wrote. “SVB shouldn’t be a business model for anyone to follow. It was a crash for high-tech operators, startups and venture capital. It was a ‘players’ bank.
He continued, “In other words, a bunch of Silicon Valley protesters were misbehaving under the heading of a bank – and it all came crashing down on their heads. But it had nothing to do with what kinds of banks you or I were dealing with.”
Ramsey described his view on banks, sellers, and freedom of choice.
“Believe it or not, the bank is just another seller,” he wrote. “They help you, they are your resource — whether it’s a checking account or a debit card or something else.”
“Anytime you’re in business, especially when it comes to the key areas of your company, it’s always a good idea to have more than one vendor in that category,” Ramsey added. “That way, you won’t be stuck if they decide to raise their prices or lower the quality of their services.”
The radio host mentioned how this trick applies to his personal work.
Don’t get me wrong — I’m not talking about jumping from vendor to vendor every time the wind blows. We have vendors that we’ve worked with for 20 years at Ramsey Solutions.
But I also will not allow myself or my business to become captive to one provider. Currently, we have three banking relationships. We have a core bank, and we’ve been with them for 35 years. We also have two other small banking relationships.
Do you see what I’m saying, Matt? If you only had one supplier for one of the key elements of your business and they suddenly went sideways, so would you! We deal with smaller, regional and local banks in my company as well. In this way, we talk to real people who make sensible decisions.
big banks? No thank you. Small businesses, in particular, are just numbers to them. You get no respect, no mercy, no real help.
Ramsey also addressed the issue of building relationships with people in local banks.
“Develop banking relationships with people in your town and region,” he wrote. “I’m talking about the kind of people you can sit down with, have a cup of coffee, and engage in a real discussion about your needs and what’s going on in your business.”
“A bank is a major seller relationship for a small business, but be sure to protect and diversify yourself. Never own just one.”
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