What is a real business?
Or… a trip to the bank


I was reading an article the other day that was going over the latest and greatest fees being considered… tested… evaluated… debated… by different banks. And in that article, I saw a very discouraging thought. I’ll paraphrase it here… and not even link to it… because it’s actually general enough even in this simple context that I think we can all appreciate it.


Banks are businesses.

Got that?

I’m going to repeat it. It’s so simple a thought that I think we can all agree with it. And yet, in a way I’m going to disagree… which is what inspired me to write this essay. So let’s look at it one more time.

Banks are businesses.

There are all sorts of places and directions we could head off to from here. But the reality of the situation is two-fold… even though you may not perfectly agree with me on fold number two.

First of all is that business concept. Let’s face the facts… even with low interest rates (or no interest these days), a bank does not keep its doors open solely by acting as a safe storage place for your money. Paying the staff… running the ATMs… the costs of buying the pens on the chains… there are operational costs. And if the only idea was to provide an account for you while earning no money from other sources… you understand, the doors would close.

Like I said… it’s a simple idea.

But then we get to the other side of the fold.

As a second thought, I would argue that a bank is kind of a community service business. (Not service industry… service business.) Banks… the post office… and maybe I’m not expressing the idea correctly, but my main thrust are places we take for granted that: (1) need to operate on a different business model, and (2) provide us with certain services we couldn’t provide for ourselves.

For instance, if you would like to try and deliver a birthday card to Australia from the United States, on your own for $1.05… I wish you luck.

I hope you see my point. These places operate differently.

The problem is that a service business isn’t widely regarded by us as something that needs to generate a profit. And that creates a lack of perceived value for all of us.

Don’t believe me?

Ok… when I was growing up, people went out to run their errands. And personal experiences were so common between all of us that there was pretty much a mailbox on the curb outside every bank. (You also could find a phone booth with ease.)

It wasn’t that the bank or post office was a business you did business with… but rather, as easily exemplified by just noting the way we pay our bills, it was the business that assisted you in completing your business with others.

Yes… yes… I see the current state of the industry. (So to speak.) Bills are paid on the internet… the postal service is in financial ruins… and I don’t believe I’ve seen a payphone in years.

The thing is… I’m guessing I’m not alone. Of course I want my bank to be functional and stable. Good business for them is good news for me. That said, there is a certain expectation of service that goes along with it. And those expectations are vastly different than the ones I have for a hardware store, a restaurant, or any other place I might find in the yellow pages.

Maybe those expectations are misguided though. Perhaps the “adapt or go out of business” approach to changing times hits these service businesses the same way it can hit any business. Perhaps I’ve just been around long enough that the dinosaur-like feeling I have about changes around me is nostalgia-based. Perhaps I’m just getting old.

If you have any comments or questions, please e-mail me at Bob@inmybackpack.com