You only need one accountant. There's no reason to have more than one attorney. But if you have only one bank, it's time to go shopping.
There are a number of reasons to use more than one bank, beginning with borrowing ability. "Doing business with the same bank for years usually makes it easier to get a loan when you need it," says Linda Fayerweather of Fayerweather Consulting, a Toledo, Ohio, business coaching firm. "But banks' lending policies change from year to year, often quarter to quarter. If you need a loan just when your bank has become more rigid, where do you turn?"
Other factors change, too: range and quality of bank services, fees, interest rates and your needs. "Yet, after opening an account, most entrepreneurs don't monitor banking costs, services or benefits offered by competing banks," observes Fayerweather.
Fayerweather, former director of the Delaware Small Business Development Center, says many entrepreneurs believe it's better to have all your accounts at one bank. "Not true," she says. "Some of my clients have business accounts at one bank and payroll at another--mainly so they won't be tempted to touch the withholding funds--but the major benefit is having another banking relationship, maybe getting free services, better interest rates or strategic business services while establishing credit with a new bank." That's especially important in this era of bank mergers, when "you [may] suddenly find your bank dramatically altered or even closed," she says.
Review all charges annually and compare your bank to the competitors, suggests Fayerweather. "Don't change banks yearly, but do shop for the best rates and services and the lowest fees," she says. "You may need three banks." If you prefer staying with one bank, ask it to waive or reduce your service charges. "Banks are open to negotiating," Fayerweather notes. "They, too, want long-term relationships."
Paul DeCeglie (MrWritePDC@aol.com) is a former staff reporter for Journal of Commerce and American Banker.