Planning for Long-Term Growth

Columbia Banking Leaders Discuss Economic Future

Photos by L.G. Patterson

Though Columbia and Boone County have typically seen steady growth over the years, local financial experts discussed ways to improve the area’s economy and stimulate large, long-term growth. Supporting startup companies,
developing a community vision and enticing a young workforce to stay in Columbia after graduation were all topics on which local bankers shared their insight, concerns and vision.

Inside Columbia Publisher Emeritus Fred Parry and Zimmer Communications General Manager Carla Leible hosted the luncheon, which was catered by Sara Fougere Catering. The purpose of the roundtable was to facilitate discussion on Columbia’s economic future and the issues that affect that forecast with eight local banking experts.

Improving Quality of Place

Workforce needs have dominated industry discussions globally and local leaders know that Columbia has a unique opportunity to assist employers because of the different colleges that call this community home, including the University of Missouri, Stephens College and Columbia College. Each fall, several thousands of students arrive in Columbia to receive an education, but many choose to leave mid-Missouri after graduation.

“We’re blessed every year when all these kids come in and we get this migration of talent, these good, upstanding citizens in the community, but when they graduate, they go back home,” says Jay Alexander, Columbia community bank president of The Bank of Missouri. “We have to find a way to capture that.”

For Alexander, that means addressing a gap in entertainment and amenities for those young adults who are recent graduates, but not quite ready to start a family. “Columbia clearly is viewed as a great college town and it’s clearly viewed as a great place to raise a family or a great place for retirees, but there is that gap there,” Alexander says. “It becomes a quality of life issue.”

Alexander says college graduates can choose to live in Kansas City or St. Louis for roughly the same amount they’d be spending on housing in Columbia, while getting all the amenities, especially entertainment, offered in a large metropolis. “If you look at Columbia, you really just don’t have that place for those 25-30 year olds to go hang out,” Alexander says.

Brett Burri, community bank president at First Mid Bank & Trust, agrees, saying the amenities of those cities are often combined with heavy recruitment efforts by large companies headquartered outside of Columbia, leading graduates to relocate quickly.

If students knew there was a job opportunity waiting for them locally when they graduated, more may be willing to stay, says Joe Miller, central Missouri regional president at First State Community Bank. He says First State Community Bank has been considering more paid internship positions that would allow the bank to hire students while still in school, in the hope that they would continue employment there after graduation. “That way, we can grow from within,” Miller says.

Matt Williams, regional community president at Simmons Bank, says some companies have already begun efforts to attract more younger employees, pointing to the emphasis on culture at local companies such as EquipmentShare and Veterans United. By bringing more fun into the workplace, companies are able to attract and retain top talent, he says. Plus, they understand that the younger generation wants to work somewhere with purpose and do something they’re passionate about, he says, which leads companies to encourage more community involvement and volunteer work. “Some of these new companies are getting it right,” Williams says.

Area bankers at CEO Roundtable
(Left to right) Joe Miller, Sarah Dubbert, Brad Roling (seated), Josh Stephenson

Supporting Startups

Making Columbia a better home for entrepreneurs and startup companies also can help bridge that gap. EquipmentShare itself was once a winner of a local startup competition, and finding ways to ease hurdles for other entrepreneurs could help entice more young people to stay in the area after graduation.

But to do that, Alexander says there needs to be better access to capital and coaching. “We need financial institutions that recognize and understand startup businesses and can underwrite them appropriately,” Alexander says. “The community also needs more lenders that are willing to engage in microlending for the smaller companies that many times are the fabric of our community.”

Not all banks have embraced microfinancing, but The Callaway Bank began its microloan program about three years ago. Josh Stephenson, regional president of The Callaway Bank, says the idea behind the program is to help those entrepreneurs who may not have the credit or assets to take out a traditional loan. There’s a $20,000 limit and requirements that include using some of the available resources, like Regional Economic Development Inc., to learn more about building a business plan and the financial considerations that go into it.

“It’s hard for somebody who’s got an idea to build up enough capital to start it,” Stephenson says. “We’ve had pretty good success with it, but it hasn’t been overwhelming. … We’ve got room to grow it.”

Having loan applicants connect to an established resource, such as REDI or the Missouri Small Business Development Center or the Missouri Women’s Business Center, is a key component to making a startup successful. Miller says many first-time entrepreneurs are unaware of the resources available and bankers need to help bridge the gap. “I think part of our job as a banker is to help them get the tools and resources necessary to help them build a business plan,” Miller says.

Burri says it’s the responsibility of the banker to help put clients in a position where they can be successful and save them from a potentially poor decision. But at the same time, Stephenson says, it would help everyone to ensure that financial literacy is taught at the college and high school level, which is just not done now.

Sarah Dubbert, president at Commerce Bank in Columbia, says entrepreneurs are incredibly passionate and have made themselves experts in their areas, making it the job of the bankers to provide guidance on the financial side. “Instead of being a decision maker, it really is about teaching,” Dubbert says.

Area bankers at CEO Roundtable
(Left to right) Matt Williams, Jay Alexander, Brett Burri, Eric Barmann

‘Telling Our Story’

Miller says the Columbia community is lacking a collaborative vision, a common theme that everyone can embrace and have a stake in. “We don’t have that one theme of this community that says, ‘This is what Columbia is all about,’” Miller says.

Several others agree, with Alexander noting that the stakeholders of Columbia have different priorities and have not had a real interest in collaborating. Dubbert adds that it’s difficult to achieve goals if everyone isn’t aware of what they are and why they’re important.

“People don’t know what the endgame is supposed to be,” Dubbert says. “People don’t know what we’re trying to accomplish.”

It speaks to an old problem in the area, Williams says. “We do such a terrible job of telling our story.”

But, Williams says, despite the need for improvement in some areas, Columbia has maintained steady growth over the years thanks to its anchor industries. And, Burri adds, it’s that steadiness that’s led to an oft-heard saying in the area: Columbia’s recession proof.

“I don’t know if that’s exactly true, particularly with inflation hitting everyone, but it’s pretty darn good here,” Burri says, noting that there’s a spirit of collaboration among businesses in Columbia, both large and small.

But that steadiness can also be a hindrance, Stephenson says. Without having to hustle, the community can get complacent and that can quickly mean being left behind.

Brad Roling, market president at Mid America Bank, says one major driving force behind the local economy is not just the University of Missouri, but its athletics, especially football. The sport creates a draw to the area for many people who may not come to Columbia otherwise, he says, and it’s an opportunity to make a good impression. “Over the next four months, we will have a lot of people traveling to Columbia and this is our time to shine as a community,” Roling says.

Eric Barmann, market president at Connections Bank, says things like Mizzou athletics are what lead to the “outsized amount of money” flowing into the area that keep Columbia steady. But what needs to be thought about is how to continue that growth in the future. Barmann says the community should be looking at opportunities to pull investments out of the coasts and into the Midwest over the next 15 years. “Are there things Columbia can get out in front of and continue to pull that money in from the coast and other areas and beat out some of the other locales?” Barmann asks.

RAPIDFIRE

What’s the most common mistake you see with a startup?

“I think they have a misconception of what it takes to run a business. They’ve had a job and they understand that, but they don’t understand all the extra time that it’s going to take. … It’s just the misconception of what it takes to run a business, and what does it actually take to generate every dollar that they’re putting into those pro formas?”
– Eric Barmann, market president at Connections Bank

“What we see consistently is just under capitalization. They just don’t have the ability to deal with adversity that always comes up. You don’t know what it is, but you know something’s going to happen. And they just don’t have the staying power to deal with it.”
– Matt Williams, regional community president at Simmons Bank

“They start their business before they are fully prepared; they haven’t done their homework. … They don’t know about Missouri Innovation Center, REDI, MOWBC, Centennial Investors or any of these other programs out there. It’s our job to help them get connected to these resources… Sometimes those folks come back because it’s an actual viable idea. And sometimes when they do their homework, they realize maybe it isn’t a good idea.”
– Brad Roling, market president at Mid America Bank

“I think a lot of times when somebody gets that bravery to start a business, they’re so sure of themselves and they’re unwilling to listen to counsel. Often, they don’t have a really good grasp of cash flow because they’re focused on sales and revenue. … Even if they have a business plan, it’s not realistic, they keep going back to the projections, but they just aren’t open to that open dialogue.”
– Brett Burri, community bank president at First Mid Bank & Trust

“If you’re getting started, find a good accountant who can be your partner and help you, give advice, and then find a mentor or find somebody who has started up a business. Somebody who has done what you’re doing, who you can call on for advice. I think that’s the key.”
– Joe Miller, central Missouri regional president at First State Community Bank

“Many people don’t come to the bank until after they’ve started their business and run into problems, often making it too late for us to be able to help them.”
– Josh Stephenson, regional president at The Callaway Bank

“Underestimating working capital needs is what we see as the most common cause of failure. They think they’re going to be profitable and break even in six months. And I’m like, ‘That’s just probably not going to happen.’ They need better access to capital, coaching and other resources to create a realistic business plan.”
– Jay Alexander, Columbia community bank president at The Bank of Missouri

“It really does need to include partnering between the banker and the business, and it needs to be a collaboration to navigate what that looks like. … It’s us pointing them to the right resources because we already know what’s out there. And I think sometimes it’s that expectation misalignment. They think they are coming in ready to launch the business and we’re saying, ‘Hey, let us help you get all these resources together that you still need to shift through and internalize.’”
– Sarah Dubbert, president at Commerce Bank in Columbia

This article has been edited to reflect the correct title for Jay Alexander, Columbia community bank president at The Bank of Missouri.

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