MINDS w/ Janet Garufis 10/14/2010 Summary
MINDS w/ Janet Garufis.
Thursday, October 14, 2010.
Can a banker really be inspiring? Borrow on the cheap, lend out on margin. Aren’t they all economic and math majors? Adam Smith, libertarians, and free market thinking should rule society. Can bankers really care about humanity? Wall Street concretely drives the day’s happenings.
At MINDS on Thursday Ms. Janet Garufis, President of Montecito Bank & Trust, offered a refreshing paradigm shift and glimmer of hope during a time with heightened distrust for banks and their leaders. She is the antithesis of what we’ve all come to believe as the stereotypical bank president.
She is a woman. This sentence is meant to be shocking. Though this should be common, and though it is my personal belief that the 21st Century will be the century of the woman, in large part because of women like Janet, it has yet to become mainstream. Yes, a woman can lead a business focused around money. And she can lead it profitably well.
She is inspired by her position in the community, not solely by profits. At the head of a local bank, she is grateful in having the opportunity to consistently participate in the one of the great towns of all the world, Santa Barbara. Her duty is to serve this community. Her goal is to inspire her staff; and dream big for her clients.
She is thoughtful and generous. Initially retired from a successful career in banking, she took up the challenge of a PhD in Composition and Rhetoric. The idea was founded in her love for literature and teaching. UCSB offered such a program to challenge the other half of her brain. No longer were documents set before her meant to be read quickly, like stark headlines across a page. Color grew out of these new words. This leap into better communication further exemplifies her eagerness to compound things other than money, this time her knowledge. Years away from banking coupled with a fortunate interview alignment with owner of Montecito Bank & Trust, Michael Towbes, afforded her the opportunity to express her and Mike’s vision of personal, creative, consistent and caring banking with generous communal giving. This coming November they will give away $1 million to 160 non-profits. This lunchtime event is an underline to the year round giving in which they indulge. Every week Janet sits down with their sponsor chair and reads through the large stack of non-profit requests.
She is adventurous and balanced. Prodded forward by her son, she trained and completed her first ever triathlon this September at the Santa Barbara Triathlon. It was outside her comfort zone. The cold water. The waves. One grows in these experiences. One finds training for such a feat a way to find balance. One must take care of oneself whilst taking care of one’s family and profession.
Amidst an industry all about money, Janet reminds us to dream big, experience success, and give back all along the way. May we all be inspired to do the same.
Bullet Pointed Takeaways for Your Business:
1. Banks are swimming in liquidity. Business owners are afraid to ask for money. They are fearful of the future. They aren’t sure of whether they can handle taking on more debt given the uncertainties.
2. Though banks are highly liquid, the banks are shrinking. Old money is getting paid off due to the low interest rates.
3. Funding your business typically follows the following tiers.
a. Friends and Family
b. Venture Capital Firms (for larger enterprises)
i. They will want three to five times returns in three to five years time.
ii. Money needed is typically over $1M.
iii. They will want at least 20% ownership or more
c. SBA Loan (for smaller enterprises)
i. SBA, Small Business Administration, is a great way to gain access to early capital.
ii. http://www.sba.gov/financialassistance/borrowers/guaranteed/
iii. Receive loans for acquiring materials, equipment and office space.
d. Banks
i. Your business will need to have a proven track record of success.
ii. Banks make money off your repayment of the loan plus interest. This doesn’t afford them the ability to take on huge risks when lending out to you. Thus, the reasoning for the need to have a seasoned business.
4. Make a relationship w/ a banker long before you need a loan.
a. Knowing when to ask your banker for legitimate help is important. http://www.sba.gov/smallbusinessplanner/start/financestartup/SERV_BANKERFRIEND.html
b. They can guide you into the right resources and business contacts as you are on your way to being business loan worthy.
5. Learn the five Cs of credit: When preparing for applying for a business loan.
a. Character (how trustworthy you are)
b. Capacity (your financial strength)
c. Capital (the amount of your own money invested in the business)
d. Collateral (assets available to back up the loan)
e. Conditions (the state of the economy and your industry).
6. Banks have lost sight of the value of the personal touch and relationship. Janet noted the cornerstone critical to lending is character. Credit scores are becoming the new “c” for character when it shouldn’t. "The more heavily lenders and bankers relied on credit scores, the more mistakes were made," says Anthony B. Sanders, a finance professor at Arizona State University and former head of asset-backed research at Deutsche Bank (DB) in New York.
7. Fair Isaac provides a credit scoring model for small businesses.
8. Culture of the bank is important. Each person must feel empowered to make a decision. Not everyone is to manage, but all are expected to lead.
9. Life: Keep as many options open as possible. This will keep you from making an emotional decision.
10. Plan: What do I need and when do I need it?
Recommended Reading:
Leadership Challenge by Kouzes & Posner http://www.amazon.com/Leadership-Challenge-4th-James-Kouzes/dp/0787984922
Good to Great by Jim Collins http://www.amazon.com/Good-Great-Companies-Leap-Others/dp/0066620996/ref=sr_1_1?ie=UTF8&qid=1289528726&sr=8-1
