Grand Bank’s Mark Wells On Small Business Banking

PHILLIP CRUM: Do you know what time it is, Kathleen?

KATHLEEN MILLS: I do. Hi, Phillip. How are you today, Phillip?

PC: It looks like we have a very special guest today. This is going to be good. It’s time for another edition of “It’s Just Coffee”, your weekly podcast about all things mental health.

KM: All things.

PC: Specifically for the young ‘uns, those who are in school, getting out of school, and just need a little bit of education and training, a little help, to get started.

KM: Yes. Very much

PC: Tell me something new. Tell me something I don’t know about Lifetree.

KM: You know everything, Phillip.

PC: I know that. I’m just setting you up.

KM: We are growing. We’ve added two therapists and they’re excited. They’re on fire. They are willing to do what it takes to build their practice at Lifetree Counseling Center, and we’re going to help them.

PC: Got ‘em online and ready to rock?

KM: Online, ready to go, all systems go. We’re open six days a week.

PC: What are they specializing in, these two.

KM: A whole bunch of stuff. Amy has a really good background in serving special needs adults, dual diagnosis.

PC: That would be Amy Cole.

KM: Amy Cole. And then Kim is just likes to see women. Women’s issues, that kind of thing. Depression, anxiety, and she’s got a tender heart, very tender.

PC: Any speaking gigs coming up?

KM: I’m speaking on July 18th at one of the Christian therapists’ organizations. I’m going to be speaking on the “12 Must-Haves” of what it takes.

PC: By the time anybody listens to this, this may be past.

KM: It’s already going to be done, but it will be in our new book.

PC: There you go.

KM: It’s coming out in two months.

PC: And you’ll be recording while you’re doing it, and it wil be in Slide Share, coming to.

KM: All kinds of formats, right, Phillip?

PC: Right. What about meetings? Any meetings in January?

KM: Yes, actually, for interns, clinicians, first-year clinicians, college students. We’re going to talk about business issues and other things that I think that it would be helpful for them, if they want to go out on their own, and we are fortunate to have one of those guests here.

PC: Without further ado, I’d like you to introduce this fellow. He’s a banker, and explain what does banking have to do with the mental health training program? There’s your setup.

KM: The banker knows it all. It’s important to have relationship with, I think, a good banker, and it certainly was – I know big banks and small banks and Mark Wells is a small bank, and I am privy to liking the small banking system, actually, but that’s just my preference. Mark, how are you doing today?

MARK WELLS: I’m doing good. I’m glad to be here.

KM: Tell me your credentials, where you are now. Just a little bit about you and your history and all that.

MW: I’ve been in Dallas most of my life, and have been in the banking business since I was a teller in college starting in 1975. I’ve been in the banking business a long time, almost all of that time has been in community banking. I’m fortunate to be with a good group at Grand Bank in Dallas with a couple of locations and a great team of folks.

KM: You’ve been doing this for a long time.

MW: I have been doing this a long time.

KM: What’s your favorite part about it?

MW: It is so fun to see what makes different businesses tick. You get an inside look at information that is not normally public information for lots of different businesses. You get to feel like you’re in many cases, part of the success of what they’re doing and just to enjoy some of the differences and some of the just the fun people that you get to deal with on a pretty intimate basis.

KM: You see a lot of startups?

MW: I do see a lot of startups. All kinds of business. Whether it’s an operating business or a service business, manufacturing business.

KM: List a couple of examples of each of those.

MW: We certainly do deal in the medical field. We deal in the construction field; we have a lot of entrepreneurs. In our particular bank, it’s not really based on a line of business. It’s based more on the person and their ability to do what they do. Because we don’t deal with the real large conglomerate kinds of businesses, usually, the CEO is the CFO, and is the COO, and oftentimes, they have other people who do those functions, but they’re intimately involved in those functions.

PC: Kathleen, let me ask you. We have a banker here for a mental health professional show. Make the connection for me. What does banking have to do with training somebody that’s still in school, or not in school, as far as building their clientele and their business.

KM: When you start up your business, I think it’s very important to find a bank who can help you with the startup, but more important, that’s your lifeline. That’s your money pipeline. That’s where the checks go.

PC: I guess I’m not making the connection here. Bankers are all nice guys. Ask ‘em, they’ll tell you. What do you mean – I’m trying to get at – you’re a business owner and I know your history. Why is having a banker – a particular banker – important?

KM: He’s got the business piece that sometimes I don’t know. I need to rely on that expertise.

PC: You need an advisor.

MW: There are a lot of places where a good banker can add value, and that’s what you’re looking for is someone who, because I deal with – our group deals with a lot of different kinds of businesses, oftentimes we’ll see different situations that have happened that you’re experiencing, and we can bring to bear either an introduction to someone who’s going through the same thing, or just say, “Have you thought about this?” Everything from your – we’re not lawyers, but we know things that ought to be in a lease. We’re trained to see what might go wrong with a situation, and so to be able to ask questions, and so for someone to be able to think through those questions, asking the question. The reality is that you ought to be able to think through, and you have a good answer, great, but if you don’t think through it and get to the place where you do have a good answer.

KM: The wisdom of that is what I don’t have a lot of times. It’s helpful to have a mentor in the financial area, or the mentor in the legal area, or whatever, because I think the more you accrue those kinds of people, it makes for a much better business plan.

MW: There’s some more practical things that a community bank’s going to add. Everybody and every business makes mistakes. There are times obviously, you want to minimize those, but how you deal with those mistakes and how you get out of those mistakes. In a bigger bank, all of a sudden, something gets posted to your account that shouldn’t have been posted to your account and now there’s not enough money in your account. Can you get to the person who’s going to help you fix that?

PC: That’s actually what I’m thinking about. I’m 23 years old, I just got out of school, somebody is persuaded me that I need to know a little bit about the whole banking thing and the lawyering thing and whatnot, in addition to what I spent my money on in school. I’m thinking that’s well and fine. MW, you’re the vice-chairman of Grand Bank, but when I walk through the door, I get the teller of the week.

MW: You’ll find that at a community bank – as an example at our bank, I have to think about this, but I don’t think we’ve had a teller change in probably five years.

PC: I’m playing Devil’s Advocate here.

MW: Having someone that you can call besides the teller and say, “I’m having a problem with this. Can you help me?” is important. Then, obviously, the other practical aspect is in the right circumstances, the ability to help with borrowing needs of a business. Again, having a relationship that will ask you the right kinds of questions to help you prepare for that can make a big difference.

KM: Can you share a couple of those questions that you would ask?

MW: Absolutely. Are you thinking specifically in terms of someone starting a new business?

KM: Yes.

MW: The reality is, for me, there’s a lot of things, but number one, do you have the right temperament to be an entrepreneur? Do you have the ability to make hard decisions there because you have to really have a pretty strong will, you have to have an ability to process well, and think outside of just your specialty of what you do. That would be the first thing. Do you have the temperament for it? Also, do you have the skill set, or do you have the capital to bring the skill set? Things like accounting, things like budgeting. Do you have the ability to do that, because those are important to a successful business. The other thing I would say is, do you a reasonable expectation to have a client base? That idea of build it and they will come is a tough premise. Do you have a reasonable expectation? Probably the most important thing, Kathy, is do you have the capital base? The most common reason businesses fail is lack of capital. The lack of the ability to get through something unexpected. Whatever goes exactly as you planned it. Do you have the ability to weather that storm?

PC: That’s one of the entrepreneur’s top deadly sins, isn’t it? They talk themselves into “nothing’s going to go wrong.” I’m just going to run with that.

MW: Debt is an incredibly great tool. It can be an engine that is wonderful, but it can also be deadly. Wrong attitudes about debt can get you in trouble. One of the things we talked about was it can even impact your ethics because you…

PC: You’ll do things you wouldn’t normally do.

MW: That’s exactly right. I was talking to a young professional about a situation they were in where they were being asked to do something that they felt uncomfortable with from an ethics standpoint. I said, “Quit.” And they said, “I can’t quit. I’ve got all these bills to pay, I’ve got all this to do.” The reality was the way he had arranged his finances did not leave him enough margin in his life to do the right thing. We were talking about the idea, specifically, in mental health care. Even little things like because you have bills to pay, would you have had the ability to tell a patient “I think we’re done here. I think we’ve done everything we need to do.” That’s just an example. It doesn’t matter the business. Debt can be a very dangerous thing if not done correctly.

KM: I think that’s a really good foundation for people to ask themselves.

PC: Are you telling me that I just dropped 40 or 50 thousand dollars at XYZ University and still owe that money, and now I need another nest egg of money to open up my own place, my own shingle.

KM: I’m telling you, yes.

PC: I can get a little 300 square foot place over here for $400 a month.

KM: It’s a monthly debt on top of your student loan debt. Either way you look at it, at least in my mind, your monthly spreadsheet is your debt. At least, that’s how I look at it.

MW: We call it a global cash flow. When you’re an entrepreneur, it’s your personal expenses and your business expenses that become the nut that you have to cover every month.

KM: And your student loan is part of your entrepreneurial debt. It doesn’t matter where.

MW: If you have student debt, that’s part of what you have to cover. And the reality is, I see a reasonable expectation of, “Do you have patients?” Most people who start businesses have a following. Interestingly, from a banker’s perspective and I think this would be true for an entrepreneur, too, banks look when they’re borrowing money. I don’t care if you’re talking about a billion-dollar loan or a $10,000 car loan. Banks look for two sources of repayment on every loan. In other words, if plan A fails, is there a plan B that works? Even if I finance a car for you, plan A is you have a job, you have an income and that income is going to pay the car back. Plan B could be things like pay it off with cash, but for most folks, it’s somebody selling them the car. Either the customer is selling the car or the bank is selling the car. Who wants to get into that situation? When you’re starting a new practice, that idea of hanging a shingle without a customer base, you can write a business plan that says, “I’m going to see that many clients this many times at this fee,” but if you don’t have any expectation that they’re going to come, that’s a problem.

KM: And you look at, are they coming now, or where are they?

MW: That’s exactly right. If you come see a bank, any bank, a bank’s going to say, “Do you have a client base?” If you can tell a banker and show a banker that you have enough clients to you now, and you’re moving a block away and you’re not in breach of some non-compete or whatever, as long as you’ve got a reasonable expectation that these clients are going to follow you and it will cover the bills, that’s going to make a banker feel different about it than just saying, “I’m going to hang my shingle and hope they come.”

KM: Right. And thinking the bank is going to go, “Oh, okay.”

MW: And the reality is, even if you can get a bank to say yes to that, that’s a scary thing. That may feel good on the front end when you open the business, but when they don’t come, that doesn’t feel very good.

PC: If I don’t have a client base already, and you won’t help me and loan me some money, what do I do?

KM: That is a great question. You come and see me?

PC: How’s that going to help me?

KM: That’s going to help you because I’ve got the 22 years’ experience. We’re a debt-free company. You can acquire a clientele while I take care of the business piece for you. You don’t have to worry about that, if you will. That’s enough for your startup. That’s enough. I think a new mental health professional getting out of school or wanting to do this on their own, there’s a stepping stone, and if they can look at what the stepping stones are, you can achieve that entrepreneurial spirit in stepping-stone style.

PC: So if I don’t have a client base, I can come see you, I can develop my client base at your place.

KM: Right.

PC: And I stay there for a couple years, five years, whatever, and then I’m ready to go out on my own. Those customers are they yours, are they mine? How does that work?

KM: There are certain agreements that we sign, but after a period of time, you may go freely.

PC: And take them with me?

KM: Of course.

MW: The thing that does for someone – you can hang the shingle and you have enough capital and you’re good at what you do, you’ll eventually have enough clients that you’ll be able to cover what you need to cover. But that capital base may need to be a lot of money.

PC: Especially if you’re not really good at what you do.

MW: What we’re talking about here is the idea of being able to establish and get your legs underneath you letting someone else handle the bookwork, maybe with some referrals, and all of the kinds of things you need to build that base of business so you can go out on your own.

KM: It’s building that book.

MW: That book of business.

KM: One chapter at a time.

PC: If I’m with you, Ms. Mills, at your place, over time, am Ig oing to learn anything about the back end of the business.

KM: I think you see it every day. Absolutely. You see it every day with me. You know how it goes, you’re in on it, you see it. When you’re in it, you see it. It’s right there. I’m happy to answer questions. My colleagues do that all the time. It works.

PC: Tell me the difference, if you will, what’s a community bank and other? What else is out there? That’s a category of bank.

MW: I’ll break it into three categories. You’ll see your credit unions, a community bank, and then – they’re actually regional banks – and the really large banks. The really large banks are the four or five, the Chases, the Wells Fargos, the Bank of Americas, the Citibanks, and there are a lot of regionals. The biggest difference, really, is you need to bank with a bank that fits what you do. There are things that we can’t do. We can’t lend money at $50 million dollars at a time. We don’t have the loan limit to do that. It’s hard for us to do a good job if someone is doing a lot of overseas business. It’s hard for us to do a good job if they need a bank in seven states because that’s what they’re doing. For the big things, it’s hard for them to do – whether it’s lending or deposits or handling problems, it’s very, especially in the smaller-sized accounts – for them, small, for us, not so small – but it’s hard for them to do things other than – I’ll call it a formulaic basis. It’s rule-based. They do their lending based on templates, based on point systems, almost like a credit score, not based on the merits of the business. They don’t have the ability to delegate that kind of authority, so they make it very cookie-cutter.

PC: They have trouble scaling down.

MW: They have trouble scaling down. For some kinds of things, we have to say, “You need to see a regional bank or a money-center bank.” For some types of things, though, we’re a far superior situation. Credit union banks are usually not going to do the small business kinds of lending and/or they tend to be more consumer-based than business-based.

PC: So it sounds like a counselor would be better off with a local, community bank than a larger bank that can’t scale down and treat them -- although the commercials say otherwise, but they can’t talk one-on-one and make the small, local decisions. Unless I’m wrong, you don’t see patients from seven states?

KM: No.

PC: A lot of overseas people coming in?

KM: No. I will say – I’ll just disclose this – Lifetree started with a very large bank. I made the switch a while back to a much smaller community bank and I have been very pleased. It runs different, just lie what you said, Mark. I know the teller. I can call her. There’s no extension, I just call her and we talk on the phone. It’s very different. Very different, and I really appreciate that streamline, go-to – I know who to go to – and they answer the phone. I don’t have to go through the matrix of a 1-800 number. For me, it’s very good.

PC: We’re almost out of time. For those who are listening and who may be in another state, or not in the Dallas-Fort Worth area. If you’re in the Dallas-Fort Worth area, go see MW. If you’re not, how does somebody find a community bank and know who to talk to in the community bank. What title?

MW: I don’t think it’s a matter of titles. You’re not going to do this. You’re going to wear out some shoe leather. You’re going to have to visit two or three or four. You’re probably, unless you’re in a very small community, several community banks relatively nearby. Obviously, you’re going to want to bank with one that’s pretty close when you need to go to the bank, you can. Some of that’s changing now, too, with some of the technology. The ability to sit down and talk with a bank, say, I would call ahead of time, not just walk in and say, “I would like to talk with someone who handles loans and deposits for smaller businesses,” and make an appointment. I would go see them. If they don’t act interested or if you don’t come away with a confidence that they understand what they’re doing, then I would not choose that bank.

PC: If your daughter was looking for a community bank and she made the appointment and she went, what are the top three, or four, or five questions that you would tell her to ask?

MW: It depends on what she’s doing. If she’s trying to start a new practice, it’s also going to depend also on whether she has got the capital base to do it, or if she’s coming to talk about loans, or coming in just to talk about accounts. I would start by saying, “What are you looking for in a client? As I start this business, what are you looking for from me to be a good client?” I’d ask that, because obviously, if you become a good client, they’re going to serve you better. I would want to know what that is. You may hear different answers at different banks. That might help you make your decision. The other thing I want to ask of them is, “I’m starting a business and I either have this business plan that I’d like your thoughts on it, and you can ask me some questions about it, or can you tell me what kinds of things I might do to put together a business plan?” They’re not going to be like your CPA and they’re not going to spend days on end helping you with your business plan, but a good banker can give you some real good things to think about and how to put it down on paper. They ought to be good – again, if you don’t have confidence that they know what they’re talking about, don’t stay -- but they ought to be good at giving you feedback about your plan and say, “I see you say you’re going to see this many patients a day or a week, why do you believe that’s the number? How did you come up with what you’re going to charge? Are you going to have people pay as they go, or are they going to be people who are on insurance? Did you bill them? Did you plan the idea that you may not collect the insurance money for 30 days, or 60 days, or 90 days? Do you have, in your business plan, the ability to have someone in your office who’s going to call on those to see where that money is?” Those kinds of questions of understanding, a good banker ought to be able to help you with.

PC: I’ve told my boys as they were growing up, when I’d send them to Home Depot – and I’m linking back to what you were saying a minute ago – but I’d send them after some part. I didn’t know what we were going for, but I’d tell them to “go take this broken piece, and when you get there, find the oldest, grayest guy with the biggest pot belly you can find in the plumbing department, and don’t be talking to your friend in high school, because he doesn’t know, either.” I guess where I’m going with that is that if I were telling my daughter, “Go find the old gray-haired guy and go talk to him, the one that’s been around the block – we all have to start somewhere, sometime, but I want the guy who’s been there, done that.”

MW: That, in general, is good advice. I will also tell you, I’ve met young bankers that get it better than some of the old bankers. I think your advice is good advice, but I will tell you age doesn’t always equal wisdom.

PC: I agree.

KM: Correct

PC: We are out of time. I want to get Mark’s contact information from him so people can find you. Tell me a phone number, website…

MW: At Grand Bank, to reach me directly, 972-735-1076, and we are on the Dallas Tollway at Westgrove, and we are in Preston Center on Sherry Lane. Our web address is www gbtx dot com. I’d be pleased to talk to any of your listeners.

KM: I’m sure they can just Google Grand Bank Dallas and you’ll pop up.

PC: What do we have to Google to find you?

KM: Lifetreecounseling dot com or KM. Thank you, Phillip. Where can people find you?

PC: I’m still PC, the Content Marketing Coach, and I can be found at contactmarketingcoach dot us, and you can call me, too, if you want at 469-536-2347. If you’re interested in growing your business the way we’re doing right now, if you’re listening to it, it worked.

KM: I think these two people who are in this room with me are wise and can really help new startups.

PC: I appreciate this.

MW: Thank you for letting me be here with you.

KM: Thank you, Mark. Come back, please.

PC: We’re going to do this again. I appreciate it very much and thanks for listening.

KM: Thank you, Phillip, Very much.

PC: And on we go...