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Let’s Get Down to Small Business

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,

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Let’s Get Down to Small Business

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  1. Let’s Get Down to Small Business Tuesday, September 30, 2003

  2. Business Services • Presented By: • Kevin Lytle, • Vice President, Strategic Business Development • CUNA Center for Research & Advice

  3. Business Services • Presented By: • John Hollander, • Assistant Vice President, • Sales and Strategic Relationships • CUNA Center for Research & Advice

  4. Outline for Learning • Small Business Market • CU Products to Offer • Importance of Relationship • Recommendations

  5. Small Business Market • 10.3 million companies and firms • Small office-home office (SOHO) • Small companies Source: TowerGroup

  6. Small Business Market • $200 billion in financial services per year • Growing at a rate of 5% to 10% annually Source: TowerGroup

  7. Small Business Ownership Among Members NA

  8. 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

  9. Likelihood of Using Small Business Services

  10. Service Opportunities • Wider range of financial products and services • Numerous service segments • Business needs • Personal needs of entrepreneur • Employees of the business Source: TowerGroup

  11. Service Opportunities • Deposit and credit services • Cash management Source: TowerGroup

  12. Serving Small Business • Deposits are the most important • Checking account is universal Source: TowerGroup

  13. Serving Small Business • Checking account = PFI • PFI leads to loans Source: TowerGroup

  14. Serving Small Business • Primary factor is personal relationship • Betters rates are secondary Source: TowerGroup

  15. Small Business Views • Generally successful in obtaining credit • Dissatisfied with service • Smaller FIs favorite of small business Source: National Federation of Independent Business

  16. Satisfaction With Current Small Business PFI(Average = 3.1)

  17. Small Business Views • Key drivers for satisfaction • Customer Service • Credit relationship • Relationship manager performance Source: Greenwich Associates

  18. Small Business Views • Personal knowledge and trust • Relationship with loan officer • Low FI staff turnover Source: Greenwich Associates

  19. Small Business Views • Satisfaction drivers with relationship manager • Follow-up • Meet credit needs • Provide advice and ideas Source: Greenwich Associates

  20. 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

  21. 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

  22. Recommendations • Offer deposit services, especially checking Source: Greenwich Associates

  23. Recommendations • Develop long-term deposit strategy Source: Greenwich Associates

  24. Recommendations • Make a commitment to personal service Source: Greenwich Associates

  25. Recommendations • Branch is most important Source: Greenwich Associates

  26. Recommendations • Offer a range of business services Source: Greenwich Associates

  27. Report PowerPoint Presentation Video 2003/2004 Credit Union Environmental Scan Resources #20583 #23507 #30006 Order by phone: 800/356-8010, ext. 4157 Order online: http://advice.cuna.org and click on “Reports”

  28. 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 To order, go to advice.cuna.org, and click on “Reports”

  29. CUNA Center For Research and Advice Small Business Resources • Small Business and SEG Surveys • MBL Portfolio Review • Custom Business Plan for Business Services • Business Services IT Assessment • Business Services HR Assessment • The Point for Research and Advice http://thepoint.cuna.org/

  30. Contact Information • Kevin Lytle, KLytle@cuna.com • John Hollander, Jhollander@cuna.com Phone: 888-837-4589

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