Thursday, November 18, 2010

Generational Transfer - Services

The final of our three keys to success is services. Some of this has already been covered under technology - but there is more to it than that. Business specific expertise is an important part of helping families realize that there may be more value to keeping the family farm or business than selling it. Land management, timber management, business valuation, estate planning, and general business planning advice are all important, depending on the economic landscape in the communities you serve. These capabilities will set your bank apart with current and future generations. For example: the death of the farmer in the family need not mean selling off the land, if you can aid the surviving spouse in leasing out the land for farming. Doing so can provide comfort to the family, by keeping the land, and generate needed income for years to come. There are many examples across many family oriented businesses.

As I said last time, packaging and promotion is critical . . . as a part of your overall bid to serve the heirs to your current customers. Put together a brochure (print and electronic) and perhaps a web site to promote your ability to assist families in preserving and enhancing wealth across generations . . . include descriptions of all the ways that you can help. Remember that promoting a comprehensive package casts you in a much better light than waiting to react to requests for services. If you are serious about surviving generational transfer, make it evident to all that do business with you.

Tuesday, November 2, 2010

Generational Retention - Technology

Lets look at the second of the three keys to retaining banking relationships across generations: technology. Banking has been quick to adapt many new technologies, and a lot of them are customer facing. From the advent of automated teller machines, through voice response systems, to today's mobile banking platform, customers are demanding, and banks (most of them anyway) are providing a variety of technologies to make access to information and transactions simple and painless. A large part of maintaining and preserving relationships with heirs and potential heirs is ensuring that it's easy for them to do business with you. This includes Internet Banking for individuals, and Internet cash management for businesses, along with remote deposit capture for those customers who still handle checks as a primary payment method for their business dealings. The rising popularity of PDA/Smart Phone devices makes mobile banking - as an extension of your Internet Banking product - a must.

Packaging and promoting these services is important . . . as a part of your overall bid to serve out of town customers. Put together a brochure (print and electronic) and perhaps a web site to promote your ability to assist families in preserving and enhancing wealth across generations . . . include descriptions of all the ways that you can help. Remember that promoting a comprehensive package casts you in a much better light than waiting to react to requests for services. If you are serious about surviving generational transfer, make it evident to all that do business with you.

Tuesday, October 26, 2010

Generational Retention - Relationships

In keeping with the theme of what community banks can do to preserve relationships as older depositors die off, my last post indicated there were three keys. This time, lets look at the first key - the Relationship Factor. If you want to keep banking relationships beyond the current generation, you must - well before a "transfer inducing" event occurs - establish solid relationships with heirs. This starts early in life . . . even during elementary school. Kids savings programs, and financial education, can serve to implant your brand into kids thinking. As kids grow older, work with mom and dad to make sure the kids feel that the bank is a trusted friend and adviser. We'll talk more about technology in a future post, but it is essential in staying connected to these youngsters if they leave home. Hosting events, or webinars, regarding estate planning, generational transfer, and asset management will strengthen your position as that trusted adviser, and make it easy for heirs to look to your bank for money management advice and services. That's the goal . . . when parents retire or pass away, you want to keep your relationships with the family money, the family business, the family farm. Building strong relationships is the key.

Tuesday, October 12, 2010

Generational Retention

Recently, the subject of the following blog post (repeated from February 2009) has struck a chord with some of my bank audiences. In the coming days, I will expound on each of the three key issues, but I felt it appropriate to include this general post as a reminder:
General Transfer is a key issue for most rural banks. One key challenge these banks have is relationship retention. If you've taken the first step (and some are frankly afraid to look) and found that many of the heirs to your current deposits are "somewhere else" then you realize the challenge. Two parallel tracks are necessary. First, address the heirs who are still local. Reach out, through parents if necessary, to form relationships and help these heirs learn that your bank can be a valuable tool for managing the assets that will be left to them, be they a business, land, or simply deposits. Second, put together a plan to reach out to absentee heirs with essentially the same message . . . we are here to help you manage your inheritance. Your plan for resident and non-resident heirs is comprised of three main parts: relationship (a face); services; and technology.

Friday, October 1, 2010

Supporting Your Small Businesses - Part II

This time, let's look at specific things a community can do to help existing small businesses thrive, and to attract new ones because of the positive climate you've created. It's essential that civic leaders understand just who the local businesses are, and what challenges these businesses face. In addition to the value of the information gathered, undertaking such a program will send a clear message that your community is pro-business. Depending on the size of your community, and what efforts are already underway, this can be a large or small effort. The key is this - create a database of all local businesses, identify the products or services they offer, what raw materials, if any, they require to work, as well as their infrastructure requirements. Meet directly with owners or local managers and ask specific questions . . . be sure to inquire about challenges, and take the time to listen and record their comments. A team made up of civic and business leaders should be at the forefront of this effort.

A word about coverage: be sure you take steps to identify all local businesses, don't just rely on storefronts . . . so that you cover rural, home based, or other non-traditional businesses.

Once you have completed the data gathering, compile and review the results . . . what synergies exist with other local businesses, for example? If you are in a region where other communities are doing the same thing . . . compare notes, and see if you can find regional suppliers, customers, or peers of your businesses. Be sure to address challenges, especially if there are common concerns across many businesses. Infrastructure is a common issue: transportation, broadband Internet, water, or natural gas.

Host networking meetings, make introductions, and watch businesses do better as a result of your efforts. Your businesses will feel like they are cared for, and your local economy should do better.

Please share your experiences with these projects as you undertake them.

Friday, September 17, 2010

Supporting Your Small Businesses

At the heart of a successful community are thriving small businesses, with local ownership. No segment of our economy is under more attack today, however. In order to preserve these valuable assets, communities need to embrace and support them. At a civic level, efforts must be undertaken to understand the true nature of the business, their positive attributes, and any needs they have that threaten their success. Some communities have undertaken to survey their local business community (perhaps extending this to a county or regional effort) in order to fully understand the challenges and opportunities that exist. From this compilation, efforts can be made to match local suppliers and producers, address common problems (such as Internet access or other infrastructure issues) and find ways to aggressively promote these local businesses.

A natural extension of this effort is a program to aid your local businesses in competing with the threats posed by large retailers. No local business can survive head to head competition, but with careful attention to inventory mix, promotion, and personal service, many can find a niche that allows them to remain viable and profitable. Community support is also essential, and a successful small business program will also involve promoting the "shop at home" concept to the benefit of your local businesses.

Future posts will provide more specific guidance into efforts you can undertake in your community. I'm currently offering my services to assist communities in initiating these programs.

Wednesday, September 1, 2010

More Thoughts on Quality of Life

Many times, we ignore quality of life issues that are all around us in small towns. Benefits include a calmer lifestyle; schools, churches, and other activities just minutes away; and access to recreational areas that allow for last minute fishing or camping trips. If parents behave as if they must travel long distances for recreation and entertainment, children will grow up believing it. On the other hand, if children are exposed to these rural "amenities" they will quickly come to love and appreciate them.

It is also possible to secretly make some of your trips educational, and rural areas are full of such opportunities. In Eastern Arkansas, for example, one can visit the Louisiana Purchase State Park (near Blackton) where there is a monument marking the spot from which the entire Louisiana Purchase was surveyed. In the fall, a tremendous education in agriculture is all around the Mid-South, as crops are harvested, processed, and prepared for market . . . if you are not a farmer, find one who'll let you and the family watch the show! In West Tennessee, one can visit Reelfoot Lake, a fisherman's and birdwatcher's paradise that also offers insight into the geologic history of the region (Reelfoot was created by the 1811-1812 New Madrid Earthquakes. For more on the Earthquakes, visit the museum at New Madrid, Missouri, and while you are there, get an up close view of Old Man River from the observation platform. Mississippi is not without its history, as well - travel Highway 61 through Clarksdale and the crossroads region to learn about the birthplace of the blues. Northeastern Mississippi, especially around Corinth and Baldwyn, are ripe with Civil War sites, as well. I wonder how many of us are close to these resources but have never spent time there?

In order to preserve and expand our small communities, citizens must actively seek to promote those aspects of their communities that foster a better quality of life.

Tuesday, August 24, 2010

Improving Rural Quality of Life

When I have the opportunity to speak about rural economic revitalization, I always bring up the topic of quality of life. Generally, I think most assume that quality of life in a big city is better than that in small towns. This is often a self-fulfilling prophecy, as the very things that create and enhance quality of life are often overlooked and under-appreciated. I've periodically used the "Green Acres" version of American Gothic as one of my slides - Oliver understood the quality of life that is available in rural and small town America. I thought it might be helpful to write periodically about specific activities that small towns can undertake to address quality of life.

A number of small towns, including McCrory, Arkansas, have found value in community theatre. Renovating a suitable structure, creating a theatre group, and staging productions is a tremendous way to generate community interest and involvement, bringing folks together from all walks of life. Such activities are often overlooked in small communities, but the reality is that theatre can create and foster an important component of quality of life - civic pride. In addition, by their inclusive nature, theater productions can draw from a broad cross section of the community: children and adults, actors and carpenters, electricians and marketing types, etc. New relationships are forged, opportunities for entertainment and education are provided locally, and a good time can be had by all.

Most, if not all communities have suitable space for theatre productions, and the talent necessary to pull it off. Find ways to encourage this activity, creating one more positive activity in your community. Talk to other communities, your high school drama teachers, and others who may be simply fans of the theatre.

Many in my audience are bankers . . . perhaps I've given you some thought about the need to support community theatre if you are not already doing so. As always, I welcome your questions, comments, or thrown vegetables.

Friday, May 21, 2010

Education and Economic Revitalization

I have had a long absence from this blog. Recently, however, I was privileged to participate in the 4th Annual MidSouth Summit held at the University of Tennessee Martin. I spoke on the intertwined dependencies of community banks and small towns. One of my points, the role of education, seemed to strike a chord with the audience. Another speaker, in discussing the effort to bring a new employer to the region, mentioned that this particular employer would only interview candidates with at least an associates degree. I immediately seized on the thought that the lack of suitably educated applicants could not be corrected overnight.

Education, or the lack thereof, is the root cause of much of our economic situation. Remedying this takes a concerted effort. First, parents, across all the cultures that make up our great land must value education. This must be imparted to children daily . . . encouraging them, monitoring their homework and grades, and holding them accountable. We must then drive these children to a love of learning, a desire to expand their own horizons, and to understand that the self discipline and hard work that go into getting good grades are the same tools they will use all their lives if they are to be successful.

Educators must include parents, not exclude them, and must further seek to continually refine their teaching methods in order to remain relevant and hold the attention of students in today's fast paced world.

The business community must also participate in this effort to raise the "status" of education in the minds of our children. Partnering with schools, offering education support relevant to their particular industry, and encouraging employees to continue their education are all good examples.

In coming weeks, I will add to these thoughts, and I hope to have much in the way of feedback from others to aid in building the value of this blog.

That's all for now.