It’s been a while, but that doesn’t mean small businesses have lessened in importance to the small bank community. In fact, it’s just the opposite. Small businesses continue to grow… not just in numbers, but importance. Need a statistical reminder or two? Keep in mind that, according to the U.S. Small Business Administration (SBA), small businesses:
- Account for 99.9% of all businesses in the United States and create approximately two-thirds of new jobs each year
- Employ a total of 61.6 million people, a figure which represents 45.9% of the entire U.S. workforce
- Have created nearly 13 million jobs in the last 25 years
Do many small businesses fail? Unfortunately, yes. Statistically, according to Forbes, “one in five businesses fail within the first year. To get the complete picture, it should be noted that 20% of businesses fail in the first year, 30% in the second year and 50% by year five. This illustrates how pivotal the first five years of business are for new ventures.”
My point? As a community banker, you’re in a pivotal position here. As a trusted financial partner, you have a unique opportunity (some might say responsibility) to support small business owners and entrepreneurs in achieving their goals and driving success. In short, you can help these small business owners succeed. How? By addressing just a few of the critical challenges that small business owners face with the products and services you offer and they need to succeed. For instance:
Personalized Financial Guidance
One of the key advantages of small community banks is their ability to provide personalized financial guidance tailored to the unique needs and goals of each small business owner. Community bankers must dedicate time to understanding the specific challenges and opportunities facing each business owner, and offer customized solutions to help them achieve their goals. Whether it's developing a business plan, managing cash flow, or exploring financing options, you can (and should) serve as a trusted advisor, providing the insights and support your business owners need.
Access to Capital
According to The Zebra, 66% of small businesses face financial challenges and 32.8% of small business respondents say that lack of capital is the main reason their business closed.1 Obviously, access to capital is critical to fueling growth, expanding operations, and capitalizing (pun intended) on new growth opportunities. You can play a vital role in providing access to capital through a variety of financing options, including loans, lines of credit, and equipment financing. By working closely with small business owners to understand their financing needs and risk profiles, you can structure loan packages that meet their unique requirements and help them achieve their growth objectives. Then what happens? Ideally, those small business owners become big business owners. They can … but, frankly, not without your help.
Education and Resources
Many small business owners may lack the financial knowledge and expertise needed to effectively manage and grow their business. Community bankers can step in and fill this gap by offering educational resources, workshops, and seminars on topics such as financial planning, budgeting, cash flow management, and business strategy. By empowering your small business owners with the knowledge and skills they need to make informed decisions, you position them for long-term success.
Networking and Collaboration
Building strong relationships and fostering collaboration within the local business community is essential for small business owners to succeed. As a community banker, you can serve as a connector to these invaluable partnerships, facilitating networking opportunities and collaborations between small business owners, industry experts, and other community stakeholders. Maybe you can host a networking events. A business mixer, or an industry forum. Through networking events like these, you can create a support system from which your small business customers can learn from each other, share best practices, and explore potential partnerships and growth opportunities.
Digital Banking Solutions
Big businesses aren’t the only ones that rely on technology. Small businesses rely on it, too. Because they often run “lean and mean,” they rely on tech to streamline their operations, improve efficiencies, and offer a competitive customer experience. Share your expertise in this area with your small business owners, guiding them toward the digital banking solutions and technology tools that will meet these objectives – such as online banking, mobile banking apps, remote deposit capture, and merchant services. By providing access to these digital tools and resources, community bankers can help small business owners save time, reduce administrative burdens, and focus on growing their businesses.
Advocacy and Support
As a community banker, you can serve as an advocate for the small businesses in your local community. By actively supporting policies and initiatives that promote small business growth and economic development, you’re helping to create a favorable business environment that encourages entrepreneurship and innovation. Additionally, you should be providing support and guidance to your small business owners during challenging times, of which unfortunately, there are many; economic downturns and natural disasters, for instance. Here you can be offering financial assistance, restructuring options, and other forms of support to help them weather a storm and emerge stronger than ever.
Keep in mind …
As a community banker, you have a unique opportunity to support small business owners in achieving their goals. By providing personalized financial guidance, access to capital, digital banking solutions, and support, you’re empowering your small business owners to grow their businesses, create jobs, and contribute to the economic prosperity of your local community. That’s good business for everyone.
As always, I welcome your thoughts.
Bank Marketing Center
Here at bankmarketingcenter.com, our goal is to help you with that topical, compelling communication with customers — developed by bank marketing professionals for bank marketing professionals — that will help you build trust, relationships, and revenue. Like these campaigns we’ve created in support of our small business customers.
Our web-based platform puts our client partners in complete control of their marketing production process – and for a fraction of traditional marketing costs. We’re also proud of the fact that we currently work with over 300 financial institutions.
Want to learn more about what we can do for your community bank and your marketing efforts? You can start by visiting bankmarketingcenter.com. Then, feel free to contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.
1The Zebra. Small Business Statistics. March 20, 2024.