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The Frightening Truth about Selling to Small Business via Bank Branches

Free eBook for small business bankers and branch managers. Download at www.claritynomorefear.com.

Concord, MA (PRWEB) April 18, 2011

Selling to small businesses is very profitable for banks. Studies show that a business account is three times more profitable for a bank than a consumer account. The problem is that most branch staff are afraid to talk to small business owners, which results in missed sales opportunities. To make matters worse, their low confidence and lack of sales training about businesses, business owner concerns, and bank products and services often result in selling the wrong products—more than 40 percent of small businesses in a recent survey were in the wrong deposit accounts.

Clarity Advantage, a consulting and bank sales training firm, offers six strategies to reduce fear and increase effectiveness in building profitable business relationships:

1.    Pick One – pick one type or very few types of businesses to learn well and sell to. “While you may sell to companies or buyers other than the chosen ‘One,’ develop your business based on that ‘One,’” says Nick Miller, bank small business sales specialist and president of Clarity Advantage. “Once you have mastered the ‘One’ and developed a good business based on that ‘One,’ pick another one that is somehow related so that now you have ‘One plus One’ that go together rather than ‘two alone.’”

2.    Go Deep – become an expert on those businesses. Understand clients’ and prospects’ challenges and concerns first. Then offer ideas that will help them.

3.    Develop the Offering – understand the bank’s products and how businesses use those products best to address their challenges. “There’s no substitute for this,” says Miller. “Like business owners know their stuff, bankers have to know theirs. From memory, bankers have to know the products the bank offers, what they were designed to do for a company, and how companies would typically measure or notice the benefit of using the products.”

4.    Accentuate Personal Value – translate knowledge and personal experience into potential benefits those types of businesses will welcome. Miller recommends thinking about it as a features/advantages/benefits presentation—“I have certain features, which help you do certain things, which produce certain benefits for you.”

5.    Own the Conversation – guide the conversation process with engaging, challenging questions. Use the perspective of present, past, and future to learn about the business. Some examples: How is your business going at this point? (present); How has your business changed over the last couple of years? (past); How do you see it evolving into the future? What sorts of challenges do you think you’ll face? (future). Avoid predictable, generic questions like “Tell me about your business.”

6.    Size ‘Em Up – know whether or not the business owner meets the bank’s credit criteria. According to Miller: “You can save yourself, your bank’s underwriters, and your applicant’s time if you are courageous enough to ask three tough questions upfront. Has the business been profitable during the last several years? Has the company or any of its owners filed for bankruptcy at any point? Do any of the company’s owners have any issues on their personal credit reports?”

“It is imperative that bank sales training emphasize small business operations challenges, the value of bank solutions, and sales skills appropriate to the business types on which the bank wants its sellers in the branches to focus on most,” notes Miller. “The end result should be a more confident, knowledgeable branch staff that is no longer afraid to call on small businesses, and is well equipped to meet both the bank’s business sales goals and consumer sales goals.”

For more information on increasing the effectiveness of selling to businesses via bank branches, Clarity Advantage has released an eBook entitled, “No more…fear: 6 Ways Small Business Bankers and Branch Managers Can Build Confidence in Talking to Business Owners and Increase Sales Now.” Sales team leaders can use the sales training exercises in the eBook as sales team meetings. To download this free eBook, please visit: http://www.claritynomorefear.com/ebook.php.

About Clarity Advantage

Consulting and bank training firm Clarity Advantage helps banks generate more profitable relationships faster with small businesses and medium-sized companies, their owners, and employees. Clarity consulting, communications and sales training help banks recruit and deploy sales team members, choose their best business and consumer prospects and clients, then approach, engage, sell, expand, and retain relationships. Clarity also assists banks with consumer sales and cash management sales. Clarity clients have posted increases in household penetration, cross-sells, deposit volume, and loan volume. Visitors to Clarity’s website, http://www.clarityadvantage.com, can subscribe to “The Weekly Sales Thought,” a free eNewsletter and podcast focused on business-to-business selling and sales management.

Contact:

Karen Tunks

Clarity Advantage

980-939-2112

Karen(dot)tunks(at)clarityadvantage(dot)com

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Things to Consider When Selling Your Business

Starting a business and making it successful encompasses a great deal of work, but sometimes it gets overwhelming and you feel that selling it is the best option for you. While the current business market is shaky with the global recession affecting everything, you still have a good opportunity to sell your business. Even if you decide to wait until the economy is in a better state, you can be preparing your business for sale. Here are some things to consider while preparing to sell your business.

1.    If you have any problems within your business whatsoever try to get them resolved as soon as you can. Talk to any business partners about major decisions concerning the business and its sale, and make sure that a buy and sell agreement is in place before any sale is finalised to ensure a smooth transition.

2.    Work on getting all of your financial documents up to date and as accurate as possible. This is a great way to impress the buyer of the businesses acumen, and it will help convince them that the business is worth the price you are asking for it. It’s best to be up front and honest about all aspects of your business as well. Even if there is something negative in the businesses history, not revealing it could lose the sale.

3.    Be prepared to help finance the sale of your business, because the current economic conditions could keep the buyer from getting funding put into place. You can also start looking for a reliable business broker to help you in your search for buyers. They will be able to qualify the buyers for you based on their financial credibility and their ability to successfully run a business.

4.    Discuss with the business broker the price you should be asking for your business. They have all of the expertise needed to help you determine a price for your business that is based on the current economic conditions, how the marketplace is moving, and how a realistic price will help you sell your business instead of leaving you out in the cold because your price is simply too high.

5.    Stay in constant communication with your business broker throughout the preparation of the business for the sale all the way through to the finalisation of the sale itself. They know where to list your business for sale, who to contact and speak to during inquiries about the sale and ways to get the transaction completed in a reasonable amount of time.  They will act as your representative for the buyer and they can assess the offers that come into their office. They can also help you structure the final sales transaction, and by working with them consistently you can build a trusting relationship that will benefit your business.

While waiting for the business to sell it is advisable to keep the business running as efficiently and profitably as possible, letting the business broker hand the sale for you. They are working on your behalf and by allowing them to handle all of the sales aspects for you; you can concentrate on making sure the business remains running at peak efficiency.

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Is Selling Your Business the Best “Exit Plan”?

My neighbor asked me, “Why would anyone sell a successful company?”. He could not understand why anyone would leave a business that was doing well. Of course successful companies get sold all the time.

So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other personal reasons. Usually the business is fine but the human being running the business needs a change. To understand this better it is key to understand the other options for exiting a business.

Close the Business/Liquidation

Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are hurt by this type of exit.

Accident, Illness or Death

No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they failed to create an alternate plan.

Succession

Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, qualified and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead choose the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare person can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So although succession can be operationally successful it is rarely a financial success for the outgoing owner.

Sell

Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.

Selling on the other hand allows the business owner to decide their ideal timing, maximize the value of the business they worked so hard to build, coordinate the use of the sale proceeds for financial planning and align their personal goals with the sale of a business. Selling the business allows the business owner to create a wealth event and often significant on-going passive income without having to run their business.

Whatever they are, human reasons are always pushing and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that push owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a sale as their ideal exit plan is control. The business owner chooses to understand the value of their business and to proactively pursue the right buyer and the right price. By selling a business you choose to exit your business by choice, not by force.

The professional team at Sunbelt Midwest can help you confidentially sell or buy a business in Minneapolis, Milwaukee, Chicago, and surrounding areas. For more information check out our site at http://www.sunbeltmidwest.com.

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