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In one of my past career lives, before I morphed into a credit wonk, I was a marketing maven who launched Silicon Valley’s first-to-market start-ups committed to being market leaders. More recently, I was asked to help a credit software company prepare to launch – so I drew on the skills I mastered in that former life. Merging credit expertise with marketing acumen caused me to consider how important marketing can be when you’re seeking funding for your new business.
There are would-be purists who will try to tell you it’s “all about your numbers” when you’re looking for funding. You might get that feedback from a potential lender because they don’t want you to know a prominent bank customer is thinking about starting a business similar to your idea; in addition, there could be another reason to reject your application that has no bearing on your business plan or your creditworthiness. Unless illegal discrimination is involved, a financial institution simply has the right to decide who they will lend to, based on their individual criteria.
As a start-up owner you want banks to want your business — and you might have to do a little marketing to attract the right attention.
When you develop a strong business concept with realistic sales and profit projections, and you know your personal credit is okay, and a banker brushes you off by saying that it’s “all about the numbers” (or some similar verbiage), do some probing. If the decision is about your numbers, you definitely want to understand the specific issues so you can fix the problem.
When I discuss business bank accounts, I always urge you to establish a relationship with your banker. In a previous column, I mentioned the ultra personable, Donna McCue, CEO of FatAssFudge, who habitually brings goodie packages along with cheery business updates to her banker. She started doing this long before she needed any type of loan. Donna is a personality force-field, who makes people believe her extraordinary organic products will continue to produce success because you can’t imagine any other outcome with all that positive energy embracing excellent quality confections.
Most of us do not possess Donna’s unique abilities. However, when you’re unknown to your banker, when you haven’t been visible in your community, and when you haven’t established a personal brand in this era of limited lending, it’s easier for your banker to reject your loan application.
Establish an expert image
You need to become known as an expert in the work you’re doing, or plan to do, as a business. While it may seem daunting, this is not difficult for most people to accomplish.
Perhaps you are a stenciling artist. It’s been a hobby for years. Now you plan to open a shop, where you will sell stenciling supplies and teach classes. Or you’ve restored more motorcycles than you can count – since your Dad taught you to work on them as a youngster. Now, with more people riding motorcycles in your area, you want to turn your passion into a real business. Or while you’ve been working for a custom house broker, you’ve studied and passed the broker’s exam. You want to venture out on your own, specializing in working with smaller technology companies. Your story is uniquely yours and you can see that you are an expert in your field. Your mission is to let people – outside of your inner circle – know about your expertise.
The easiest way to be an expert is to call yourself one. Yes, you can. Examples: Kathy Hobart, stenciling expert; James Arendall, expert motorcycle restorer; Janie Calloway, import-export expert.
Now that you’ve realized you’re an expert, the easiest way to have your knowledge recognized is to give it to others: teach a group a small portion of what you know and publicize your actions in the local newspaper and on community action websites. If your goal is to attract attention for your expertise, look for groups to teach, who will create a unique angle for publicity in your area. You may only be sharing information with a handful of people. The important thing is to publicize it ahead of time and have someone take photos of you during the event. In some cases, you might attract local media if you can provide an unusual opportunity to underserved and deserving citizens.
For help on how to write a basic news release, see, How to Write a Press Release That Gets Published!. Although this article pre-dates the ubiquity of the Internet and news releases are usually sent in the body of an email today, all the same principles apply. Your local library should offer a selection of books on writing news/press releases and generating publicity for a small business.
Keep professional-looking copies of all your publicity. Use it as an integral part of your business plan package. If your activities are featured on news programs, be sure to record the news clips and include them on a CD or flash drive with your loan application. Being recognized as an expert can change the way lenders view your business proposal.
The better known you become, the more you’ll discover banks and credit unions want to be associated with you. You can ease your path to funding by establishing bonafides in your area of business prowess.