let’s get down to small business
DESCRIPTION
Let’s Get Down to Small Business. Tuesday, September 30, 2003. Business Services. Presented By: Kevin Lytle, Vice President, Strategic Business Development CUNA Center for Research & Advice. Business Services. Presented By: John Hollander, Assistant Vice President, - PowerPoint PPT PresentationTRANSCRIPT
Let’s Get Down to Small Business
Tuesday, September 30, 2003
Business Services
Presented By:
Kevin Lytle,Vice President, Strategic Business DevelopmentCUNA Center for Research & Advice
Business ServicesPresented By:
John Hollander,Assistant Vice President, Sales and Strategic RelationshipsCUNA Center for Research & Advice
Outline for Learning• Small Business Market• CU Products to Offer• Importance of Relationship• Recommendations
Small Business Market
• 10.3 million companies and firms • Small office-home office (SOHO)• Small companies
Source: TowerGroup
Small Business Market• $200 billion in financial services per
year • Growing at a rate of 5% to 10%
annually
Source: TowerGroup
Small Business Ownership Among Members
7%
18%
10%
27%
9%
0% 5% 10% 15% 20% 25% 30%
No, but plan to
Yes
From surveyCUNA estimateTowerGroup estimateNA
Small Business Market• 14% of SOHO use a credit union • 67% use a commercial bank
• 3% of small businesses use a credit union• 99% use a commercial bank
Source: TowerGroup
Likelihood of Using Small Business Services
83%
76%
73%
69%
69%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Equipment/furniture loan forbusiness
Commercial mortgage/realestate/rental property loan
New/used vehicle loan forbusiness
Business credit card
Business checking
Definitely wouldSomewhat likely
Service Opportunities• Wider range of financial products and services • Numerous service segments
• Business needs• Personal needs of entrepreneur• Employees of the business
Source: TowerGroup
Service Opportunities• Deposit and credit services • Cash management
Source: TowerGroup
Serving Small Business• Deposits are the most important • Checking account is universal
Source: TowerGroup
Serving Small Business• Checking account = PFI • PFI leads to loans
Source: TowerGroup
Serving Small Business• Primary factor is personal
relationship • Betters rates are secondary
Source: TowerGroup
Small Business Views• Generally successful in obtaining credit • Dissatisfied with service• Smaller FIs favorite of small business
Source: National Federation of Independent Business
Satisfaction With Current Small Business PFI(Average = 3.1)
Somewhat satisfied44%
Very satisfied35%
Not at all satisfied2%
Not very satisfied18%
Small Business Views• Key drivers for satisfaction
• Customer Service• Credit relationship• Relationship manager performance
Source: Greenwich Associates
Small Business Views• Personal knowledge and trust • Relationship with loan officer• Low FI staff turnover
Source: Greenwich Associates
Small Business Views• Satisfaction drivers with relationship manager
• Follow-up• Meet credit needs • Provide advice and ideas
Source: Greenwich Associates
Key Drivers of Small Business Customer Satisfaction with Banking Officers
Follow up promptly - 36% Convince bank to meet credit needs - 29% Provide advice & creative ideas - 19% Effectively coordinate product specialists - 9% Knowledge of cash management - 9% Frequency of visits - 5%
Source: Greenwich Associates, January 2003
Strategic Considerations Consider offering Small Business
Administration (SBA) 7 (a) guaranteed loans, either as an approved SBA lender, or through a third party SBA loan provider such as Newtek Small Business Finance, Inc.
Visit www.newteksbfinance.com
Recommendations• Offer deposit services, especially
checking
Source: Greenwich Associates
Recommendations• Develop long-term deposit strategy
Source: Greenwich Associates
Recommendations• Make a commitment to personal
service
Source: Greenwich Associates
Recommendations• Branch is most important
Source: Greenwich Associates
Recommendations• Offer a range of business services
Source: Greenwich Associates
Report PowerPoint Presentation Video
Order by phone: 800/356-8010, ext. 4157
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#20583 #23507 #30006
2003/2004 Credit Union Environmental Scan Resources
TowerGroup Small Business Research Reports Opportunities in the Small Business Market in 2002 and
Beyond Profiles of Small Business Market Companies Clicks or Bricks? Internet and Online Banking Adoption and
Usage Behavior Among Small Businesses Small Business Market Financial Services Trends At the Core—Small Business Credit and Depository Needs Expanding Financial Services Needs of the Small Business
Market Embracing the Small Business: Optimizing Relationship
Management Competing for Small Business Financial Services Market
Share in 2003 and Beyond
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CUNA Center For Research and Advice Small Business
ResourcesSmall Business and SEG Surveys
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Business Services IT Assessment
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Contact Information
• Kevin Lytle, [email protected]• John Hollander, [email protected]: 888-837-4589