I have helped a number of organisations choose a bank – some for the first time, some because they wanted a change, and some because they needed to change!

There are many considerations to weigh up, including: cost, secondary services, knowledge of your business sector, location of branches, access to help. To me, the most important factor when deciding who to bank with is the Relationship Manager.

It is perhaps a little unfair to say that all banks are alike, however, there is generally very little between them in cost, in location, and in the general service they offer. To my mind therefore, the biggest difference between banks is in their staff.

When I needed to set up a bank account for my business, I walked down the high street in my home town, and walked into every bank. I asked the same question in each branch, “Please can I talk to someone about setting up a business bank account”. Within 30 seconds of walking in, I felt I knew how much the person I was talking to cared about me and my business.

I would not want anyone to think that choosing a bank is a decision to take lightly – particularly in today’s economic climate. Never forget who is the customer. As ever, more than numbers and statistics, it’s the people we do business with that matter, and I suggest that this includes your bank’s Relationship Manager.

The balance sheet tells you what you own, how much you are owed, and how much you owe to other people. Broadly speaking, assets are those things you own, or are owed, and liabilities are those things that you owe to others.

Liabilities include things like overdrafts, loans, and debts to other people (creditors). But are all liabilities bad?

Borrowing money means you have cash to do something with. If it costs you 5% to borrow £10k, and you are able to generate a profit of 7.5% through the activities you can make happen, then you are making a profit of 2.5%. Without borrowing the money you would have made no profit at all. So a loan can be a good thing, as long as you are making good use of the opportunity.

Investments in your business are liabilities. They represent the amount you have been loaned and, as above, you need to be sure you are making the most of the cash. Even “non-profit” organisations need to demonstrate that they are fulfilling their “non-profit” objectives. Is the cash sitting in the bank, or being used properly?

Liabilities also include Trade Creditors – money owed to your suppliers. It is important that you pay them within agreed terms, but don’t pay early if you don’t need to. This enables you to do something with the money.

All business owners and managers should know how much they owe to other people. Not just so they know how much they owe, but so they know how much cash they are sitting on that belongs to others and to be thinking about what they are doing with it.

Since April 2009, under the Working Time Regulations 1998 (as amended), all employees have the right to 28 days, or 5.6 weeks, paid leave each year.

5.6 weeks holiday, divided by 46.4 weeks (52 weeks less 5.6 weeks holiday) equals 12.07%.

A member of staff who is full time, or part time with fixed hours, usually has their holiday pay included in their salary. Unless it is otherwise contracted, casual staff, or those with irregular hours, have their holiday pay added on to their pay. Sub contractors (those not paid through your payroll) are not normally entitled to holiday pay.

So the simplest way to calculate how much a member of staff who works irregular hours is entitled to receive in holiday pay is to multiply their earnings by 12.07%.

For example, if a casual worker has worked 100 hours, they will have accrued 12.07 hours holiday. If their hourly rate is £10, they would be entitled to £120.70 holiday pay.

It is vital that the holiday pay is separately identified on their pay slip, as it is illegal to include it with their basic wages.

So there it is, the easy way to calculate holiday pay for those staff who work irregular hours!

The starting point is to work out how much it costs to “keep you alive” each month. This should include your rent or mortgage, your utility costs, average food bill, travel costs, a contribution to a small annual holiday, and a little contingency “just in case”. Let’s say, for example, that this amounts to £1,200.

You now multiply this cost by 12 to get your annual cost: £14,400.

Assuming an average working year of 220 days, you need to earn just over £65 every day to stand still. However, that’s after paying tax. So your gross earnings would need to be in the region of £80 per day.

So assuming an 8 hour day, it costs you £10 an hour to sit still.

It might not sound much, but every hour you don’t earn means you have to earn more in the other hours. Let’s say you only earn in 60% of the time. You need to charge about £135 a day, or £17 per hour.

So when you sit down to read or do something that you are not being paid for, ask yourself, is it worth £17 per hour?

I have been very lucky to work with a number of entrepreneurs and business owners. If I had to identify a common characteristic, it is a simple determination to succeed. Not necessarily financially, but in getting their product, service, or message, out there. It never seems to matter how much they have in the bank, their passion to succeed leads them to find innovative and often unusual ways to achieve their goals.

Passion really is a form of currency. To illustrate this, I can remember presenting to a bank for a significant loan to support a business. On paper, the business was in trouble. It was losing money, it was losing good staff, and it had issues with its governance. What it did have was a charismatic leader who conveyed a tangible sense of passion to succeed. Failure simply wasn’t an option. The bank was convinced, and the loan was granted.

If passion is a form of currency, then starting with little cash is no bar to success. The ideal combination is a sound business plan, presented with passion.

It got me thinking. What was really at the heart of his problem?

The Credit Crunch refers to a bank’s unwillingness to lend money. Was he looking for a loan? If so, what for? To invest in greater capacity? To launch a new line of products or services? To help with poor cashflow?

If it was the last reason, I can understand the bank’s reluctance to lend, and crunch his credit.

Banks have not helped themselves in recent months, but their core purpose remains the same: to lend money to businesses. In return they expect a profit on their investment.

If you are having difficulties convincing your bank to lend money to you, maybe it’s because of something you need to do, or say.

If you need help talking to your bank, let me know. I might be able to help.

• Ask yourself every day: “Am I doing the things today that will ensure my business is here in 12 months time? “
• If you are not doing things that are about your business being here in 12 months time, why are you doing it?
• Understand the difference between cash and profit – you can make a loss and make money, and you can make a profit and lose money.
• Learn what the Balance Sheet is.
• Write down what your business is for in less than 20 words. Print it out, laminate it, and stick it above your desk.
• A bit of luck can go a long way.

These all seemed a bit obvious when I was preparing the talk, but after the presentation the audience reminded me how easy it is to forget the basics.

The media has led us to expect a significant budget, responding to extraordinary economic circumstances. Having run the “what this means to you” calculator a couple of times I can’t see any dramatic change to my personal, or business, circumstances.

Perhaps the message is that the chancellor hasn’t got a wand to fix the problem. In fact, perhaps the problem is not tangible enough to fix. I have suspected that a good proportion of our current and future woes are self perpetuated, by the “ever ready to tell a bad story approach” of the media, and by our own insecurities.

If there is a way out of the hole we are in, perhaps the message is that it’s up to each of us to grasp opportunities as they come, and take control of our own destiny.