Recycler Newsletter – June 2015
Written and published by Ron Sturgeon. autosalvageconsultant.com, email to rons@autosalvageconsultant.com. To register for future free issues, visit http://www.autosalvageconsultant.com. Don’t forget to watch for our management articles monthly in Recyclers Power Source Magazine, or posted at our web site.
Tools for Success – Why One Banker Isn’t Enough
The first article in this series listed several tacticsto increase your business success. I will devote the rest of the series to taking a closer look at each of those tactics. Last time, we talked about the importance of maintaining good credit. We will expand on other aspects of banking smart in this installment.
Banking Smart
No matter what anyone else tells you, ALWAYS have and use two banks. Have a business bank and a personal bank, or mix it up. No matter how you do it, you must have loans at two banks to keep your bankers on their toes.
The Right Kind of Bank for Your Business
What kind of banks should you work with? Don’t choose a large national bank. Instead, find a local community bank. Every area has at least two and most areas have several strong community banks. These banks typically have less than 500-million in assets even though a large community bank may have up to 1-billion. Open a checking account to begin your relationship with the bank. You need to have a separate business account in any case.
Loan to Deposit Ratio: A Question You Should Ask
Ask your banker what the bank’s loan-to-deposit ratio is. He or she will be thrilled that you are informed enough to want to know. Here’s why you need to know.
As a practical matter, banks don’t loan more than 80% of the value of their deposits. That means a bank with $100 million in deposits and 75- to 80-million in loans isn’t going to approve your loan. PERIOD. On the other hand, a bank with a loan-to-deposit ratio of 60% is likely to welcome loan applications.
My Other Banker
Do you see why having two banks is so important? If you have only one banking relationship, you may need money when your bank isn’t inclined to lend because of its loan-to-deposit ratio.
Portfolio Density & Getting to Yes
The loan mix in a bank’s portfolio can also affect your likelihood of getting a loan. Banks love to do loans for owner-occupied residential real estate but they may be less open to a particular kind of loan if they feel that have too much density in that kind of loan at the time you’re asking. If you have the right relationship, your banker should be willing to tell where density is affecting decisions.
Say No to the Check
When you are applying for a loan, NEVER allow a banker to check your credit until you are ready. Instead, bring them a credit report with tri-bureau scores when you discuss the loan. If you decide to go ahead, they can pull a report to approve your loan.
In the meantime, however, you won’t damage your score with too many inquiries. In addition, if you have to go to a different bank, your second bank will not immediately see that you were just across the street trying to get a loan. Protect your credit score and your privacy by being smart about when you let a banker run your credit. If you want to know the ins and outs of building a great banking relationship, get my book Getting to Yes with Your Banker.
URG Scholarship Application Time
If you work full time for a URG member recycler and are attending college or trade school or have a son or daughter going, you will want to check out opportunities to get some scholarship money. Full details on the URG scholarship program for the Fall 2015 semester can be found at http://www.u-r-g.com/general/urg-scholarship-foundation-application/
Google Update Affects Sales for Recyclers with Non-Mobile Responsive Sites
Google is now factoring in how mobile-friendly a site is when it ranks search results. If you have seen a big drop in your web traffic because your business site is not mobile friendly, I can offer you a free website audit to find the trouble spots so that your site will show up in high in the search results. Most shoppers never leave the first page of Google results, so having a site that ranks well can mean that the cash register rings a lot more. Email me at rons@autosalvageconsutalnt.com and put free website analysis in the subject line.
Remember only you can make business great!
Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.
Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.
As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.
“Whatever the mind of man can conceive and believe, it can achieve. Thoughts are things! And powerful things at that, when mixed with definiteness of purpose, and burning desire, can be translated into riches.”
~ Napoleon Hill
AutoSalvageconsultant.com was formed in 2001 to help recyclers improve their businesses. With over 50 years of experience in 3 staff members, the group is THE definitive source for recyclers’ management and training needs. Mike Gibson and Tammy Sturgeon joined the team in 2003, and bring a wealth of experience to the team, plus more resources, as there have been more requests for help than Ron could meet. The founder, Ron Sturgeon is past owner of AAA Small Car World. In 1999, he sold his six Texas locations, with 140 employees, to Greenleaf. In 2001, he founded North Texas Insurance Auction, which he sold to Copart in 2002. In 2002, his book “Salvaging Millions” was published to help small business owners achieve significant success, and was recently reprinted and published in Chinese. He also manages his real estate holdings and investments. You can learn more about how to help your business at www.autosalvageconsultant.com.
