Sunday, 22 July 2018

Information and commentary for the small business banking industry

Giving better small business banking advice

02 Feb

In the good old days (insert the year you remember the good old days here), a small business bank manager would spend time developing a relationship with small business owners. They’d be focused on helping small business owners grow their business, as well as providing banking services.

More recently, but before the housing bubble burst, strong market growth meant bank managers were more focused on signing up banking clients and trying to keep up with the demand for money, rather than giving advice.

But the current tighter trading conditions mean small business bank managers have to deal with business owners who are stressed. Not all small businesses are going bust but they are increasingly stressed about funding, business growth, eroded profit margins and competing in an increasingly globalized market.

I recently attended a small business owners’ forum to gauge what the latest business issues are. No one was looking to lay off staff. But they were re-evaluating their strategies, looking to make responsible cost cuts, assessing new products and services, looking to get closer to the end customer and decision maker, improving information flow and market research, and carefully considering where to spend their money.

Oh, hang on! That’s what they should do anyway, right?

Some businesses are under real financial stress but the majority of businesses simply need to focus on running a lean, agile and profitable business – something they should be focused on anyway.

As a bank manager, you can help your small business clients by asking questions to uncover the core issue for each small business and providing the right advice to assist. Or you can refer them to someone who can help if the matter is outside your area expertise.

I’ve spent the last 20 years helping small business owners and the following are the top questions I’ve used to help draw out the real issues facing small business owners. Feel free to use these next time one of your small business clients needs help.

1. What are your key competitive advantages? What do you do better than the competition?

Then enquire if their advantage is obvious. Is it clearly communicated? What else could they do to create an advantage?

2. What are you doing to increase your credibility?

Consider the key risks faced by customers. How will they lower these and develop credibility-building ideas?

3. Who are your key customers?

Make sure they understand the 20/80 rule and the importance of focusing on the top 20% of their customers. Make sure they understand their specific target market. Identify the best way to target this market.

4. Where do most of your referrals come from?

Find out what they are doing to encourage more referrals.

5. Are there any businesses you could align with?

Are there large businesses they should contact? Any smaller companies they should contact? Are they leveraging their database and networks?

6. Do you know your exact break-even sales target?

Complete a break-even analysis for them, based on existing data. Show them the sales needed to support their income aspirations.

7. Do they know that small improvements can make a large difference to the bottom line?

Calculate the changes that could occur by increasing sales leads, lead conversions or prices by 10%. Show them what they could do to get these 10% increases.

These questions, I think, are basic to being in business. Don’t forget to ask them even when times are good.


Glen Senior
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.

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