Key Question:
A: Lupe says you would be smart to make friends with bankers before you need to borrow money.
Q: How do you locate or identify the best banks to establish relationships with?
A: Most likely, they'll find you. Banks have super marketing efforts. You'll probably get mailings and telephone calls, invite them out to see your business. Don't establish a relationship now, establish relationships. When you need a bank, you want to have a few to choose from.
Bankers are also very active on the rubber chicken circuit. You'll meet them at Chamber functions, networking events; anywhere they can rub the flesh. And yours is new, so they'll be delighted to meet you.
Q: When the time comes, how do you select a bank?
A: First, remember that bankers are vendors. They sell the right to use their money. You select a bank the same way you select another vendor and the same way your customers select you. All buy decisions are based on two factors: quality of product/service and price. Banks don't provide service, bankers do.
The relationship is the key. It's not unusual for a business to follow its banker if the banker assumes a new position at a different bank. It's sort of like following your doctor from one clinic to another. And don't make the mistake of thinking that prime+2=prime+2. Banks are great at developing complex pricing schemes. Get term sheets in writing; make sure you have a clear understanding of both the interest rate and any associated fees. Fees can be paid in dollars or based on balances. Do the calculation; it could save you some money.
Think about it
Do you have a banker? If not, do you think you could use a banker in the future?
Clip from: Tejas Office Supply is all Texan.
Houston: Texans are resilient and resourceful, and people of deep faith. When Hurricane Ike struck, they began turning to each other to pull through thiat storm together. Pictured above is Lupe Fraga. He came with his family to Houston as a young boy and grew up as a Texan.
He captures the spirit of this part of the world.
In 1962 Lupe Fraga left his bookkeeping job to buy an office supply business but steady profits did not come quickly. Today, over 150 employees turn $40 million a year making Tejas Office one of the largest minority - owned businesses in the greater Houston area.
He borrowed some of the start-up capital from Irene, his girl friend; and, the owner financed the purchase. He married Irene -- "the best thing I ever did in my life" -- and then he learned profits do not come easily.
This is a family business. Michelle is their first born; and the day we met her, she was busy teaching a new manager and leading a customer service training session. Alisa, the middle child, handles human resources and says that caring can be measured on the bottomline. Stephen, the youngest Fraga says that they all wear many hats. Stephen followed in his father's footsteps and graduated from Texas A & M. Rather than coming to work at Tejas Office right from school, Lupe encouraged him to work for a large company which he did for two years before joining Tejas in 1998.
Named by Governor Rick Perry to the Texas A&M Board of Regents and currently Chairman of the Board of the Federal Reserve Bank Dallas-Houston, Lupe also volunteers for the Greater Houston Partnership and The United Way.
Tejas Office
Lupe Fraga, Owner
1225 W. 20th Street
Houston, TX 77080
7138646004
Visit our web site: http://www.tejasoffice.com
Office: 7138646004
Business Classification:
Office Supplies
Year Founded: 1961
Get a Banker Before You Need One
LUPE: When looking for a banker, I want a relationship before I need money. They all come to see you if your name is in the newspaper or if they find out that you bought a piece of land.
I would tell these guys, I said, `Look, what I want you to do is get to know me. I don't need any money right now.'
HATTIE: Did you buy this building?
LUPE: Yes and this is a first for me and I really believe that to really control your destiny you've got to own your resources. Own your buildings, really. Because if not--otherwise, you're at the whim of whoever you're leasing from.
