Tag Archives: Entrepreneurship

Why trust is a best business practice

Are you familiar with the term “dysfunctional family?”

The simple definition is, a family whose members don’t work and play well with each other. Such relationships typically create emotional, mental, sometimes even physical distress, and/or estrangement.

Sadly, we humans also create dysfunctional businesses. Perhaps this definition will sound familiar: A dysfunctional company is one whose teams don’t work and play well with each other. Such relationships typically create emotional, mental, sometimes even physical distress, and a casualty list.

Someone once said, “Friends we choose – family we’re stuck with.”  Since we get to choose where we work and who we hire, why are there dysfunctional businesses?

The answer is actually quite simple, and it’s the common denominator in both businesses and families: human beings. If your family, or company, is dysfunctional, it’s because of the behavior of the humans.

Humans aren’t inherently bad, but we are inherently self-absorbed. And one of the by-products of self-absorption is self-preservation. When self-preservation shields are up, mistrust flourishes, goals go unmet, and failure is likely. When shields are down, productivity, creativity, and organizational well-being are evident. But the latter only happens if the stakeholders believe there is a basis for trust.

If your organization is not accomplishing its goals and making progress, look around to see if there’s more self-preservation going on than teamwork. Where evidence of individual and departmental self-preservation is found, you’ll also find lots of dysfunction, but not much trust.

In his book, “Built On Trust,” my friend, Arky Ciancutti, goes so far as to say that trust is “…one of the most powerful forces on earth.” He further states that the two most powerful trust-building tools are closure and commitment.

Closure is implied when there is a promise to deliver by a stated time. It manifests when performance happens or, in the alternative, a progress report is delivered in advance of the date.

Commitment, Arky says, “is a condition of no conditions.” When the relationship between two parties is built on trust, there are no hidden agendas. And while commitment may not always deliver the end product, it does guarantee a report about the progress.

Even though closure and commitment are skills that often must be learned, you’ll find willing participants in your employees, because human beings desire trust.  If your organizational culture isn’t built on trust, it’s not the employees’ fault. Trust and dysfunction have one key thing in common: they’re gravity fed. They start at the top and roll downhill.

Humans perform better in organizations built on trust.  Knowing this, successful managers demonstrate trust-building behavior and instill it in others as not only the right thing to do, but as a business best practice.

 

Write this on a rock — If organizational dysfunction is a poison, trust is its antidote.

Jim Blasingame is author of the award-winning book, The Age of the Customer: Prepare for the Moment of Relevance.

How to get a bank loan – Part Two

Since most businesses have been deleveraging post-2008 financial crisis, you could be forgiven for getting rusty at how to ask for a loan from bank. But as the economy picks up and you need growth capital, it’ll be handy to brush up on your banking skills.

Last time, I used the customer qualifying process as an analogy for how to work with your banker to get a loan, and offered the first three of six loan request factors: Who makes the decision, what do they need and how do they want it? Now let’s talk about the last three.

What motivates them?

All banks need to make loans, but all banks don’t like the same kinds of loans. Some banks make working capital loans, and some don’t. Most banks make real estate loans, but each one has its own profile of what kind of real estate they like. And all banks like to loan money for things with serial numbers, like vehicles and equipment. In your first meeting, what the banker says about your proposal should indicate their level of interest in your type of loan. But if not, it’s okay to ask.

Banks will fight for loans, but they’ll kill for deposits. Checking account deposits are virtually free money to a bank, a portion of which they use to make loans. They like personal checking accounts, but LOVE business accounts. A bank’s motivation increases with your daily deposits if you place your operating account with them. You should know the value of your deposits to a bank and use that information to negotiate rates and terms.

How motivated are they?

You can tell how motivated a bank is by how helpful the loan officer is.  Her excitement is no foreteller of success, just of motivation.  But if she seems indifferent or unmotivated, that’s probably not a good sign.

A deal that couldn’t get through the front door of Bank A this morning, could be received with a red carpet at Bank B this afternoon. So be prepared to take your proposal to more than one bank. And be sure at least one of the banks you make a loan proposal to is an independent community bank.

What do I have to do?

Bankers love field trips. Give your banker a demonstration of the new equipment the loan is for, or take them to see the real estate you want to buy. Show them how the object of your loan request will help you grow your business, profits and deposits.

The best way to get a business loan is to do your homework, anticipate what your banker needs and get them what they ask for. And if the bank that was loyal to you when you needed them doesn’t have the best deal — but it’s a deal you can live with, “dance with the one that brung ya.”

Write this on a rock …

Understanding how banks make business loans will improve your chances of getting one.

Jim Blasingame is the award-winning host of The Small Business Advocate Show and author of “Three Minutes to Success.” Find Jim online at www.jbsba.com.

 

The Blasingame Translator for Small Businesses and Banks

Once upon a time, a storm caused two ships to sink in the same area. All on board were lost at sea, save one from each ship, and those poor souls were alive only because they swam to a small island nearby.

As luck would have it, the two men hauled themselves up on the beach at the same time and within sight of each other. But survivor’s elation soon became pensive as they realized that each spoke a language unknown to the other.

Immediately both men had the same unspoken thought, “I don’t know this man or the language he speaks, but if we’re going to survive, we have to find a way to communicate and work together.”

In many ways, this tale actually plays out every day. But instead of on the high seas, our story takes place in the marketplace. And instead of mythical shipwreck survivors, our real life players are small business owners and bankers.

Female banker sat with investor

Like the survivors in the first story, the excitement of the latter-day castaways about their future prospects turns pensive when they both realize that: 1) they need each other in order to be successful; and 2) they don’t speak each other’s language very well, if at all.

With so much common interest and so little mutual understanding, can these two create a successful survival story?  Absolutely, but only if they have The Blasingame Official Translator for Bankers & Small Business Owners. Here are a few examples of how The Blasingame Translator works.

For small businesses to understand banker, they must:

  1.  Identify their banker as a success partner and their business’ best friend.
  2. Stay close to their banker when things are going well, and even closer when things aren’t going so well.
  3. Believe that an uninformed banker is a scared banker, and a scared banker cannot, and will not, behave like a partner.
  4. Pay attention to what motivates and impresses a banker, like attention to detail.
  5. Understand pertinent bank rules and regulations, so you don’t ask for something that can’t be done.
  6. Reward banker loyalty with small business loyalty.

For bankers to speak small business, they must:

  1.  Understand Blasingame’s 1st Law of Small Business: Starting a small business is easy, operating a successful one is not.
  2. Understand Blasingame’s 2nd Law of Small Business: It’s redundant to say, “undercapitalized small business.”
  3. Understand Blasingame’s 3rd Law of Small Business: A small business is not a little big business.
  4. Explain bank rules and regulations, and recommend services and products.
  5. In the credit scoring process, always find a way to give small business owners credit for character, past performance and best efforts.
  6. Reward small business loyalty with banker loyalty.

Write this on a rock … To avoid becoming marketplace castaways, small business owners and bankers must speak each other’s language.

Jim Blasingame is the author of the award-winning book, “The Age of the Customer: Prepare for the Moment of Relevance.”

Five Things to Do for a Successful Referral Strategy

For as long as businesses have tried to get customers to buy their stuff, a referral has been the holy grail of prospecting. Like the mythical chalice, a referral is golden.

To emphasize the power of referrals, allow me to introduce “Blasingame’s Prospect Entrée Spectrum” (BPES), which is a way of valuing the method used to get in front of a prospect.

CC Photo via Pixabay

CC Photo via Pixabay

The BPES is on a scale of 1-10, with a cold call being a 1, and the unqualified referral a 10. The difference between scoring a referral and making a cold call is, to borrow from Mark Twain, like the difference between lightning and a lightning bug. Let me put a sharper point on that: In the Age of the Customer, cold calling is a fool’s errand.

Asking for and getting an appointment is a 5. From 2 to 5 on the spectrum are varying degrees of quality of connection that you attempt without a referral, like networking. From 6 to 9 represents varying quality of referrals. For example, a 6 is a casual referral with one of two qualifications attached: either the referrer doesn’t know you well, or doesn’t know the prospect well. The goals is to demonstrate you’re worthy of a full-throated, unqualified referral — 10 — which is almost money in the bank. When you hear someone say they’re working smarter, not harder, it means they’re earning lots of referrals, including an increasing number of 10s.

Here are five things to do to sustain a successful referral strategy:

2. Help customers give you referrals by teaching them how to tell others about you and your business. Instructions must be short and sweet, like an elevator pitch.

3. Be worthy of a referral. Take good care of the referred prospect, even if you don’t make a sale.

4. Thank the referrer every time, in person if possible, regardless of the result of the referral. Remember, getting a referral is success.

5. If you want to get referrals, give them to others.

On that last point, in Ecclesiastes 11:1, King Solomon wrote, “Cast your bread upon the water and in time it will come back to you.” Three millennia later, Ivan Misner, my friend and founder of Business Network International (BNI) gave us a handier way to remember the law of reciprocity. Ivan simply says, “Givers gain.” Beautiful.

In the Age of the Customer if you’re not asking for and getting referrals, you’ll have to work much harder than is necessary just to survive.

Write this on a rock … Seek the holy grail and Perfect 10 of prospecting – the unqualified referral.

Value is the threshold of your relationship with Customers; values are the foundation.

tranquility-3

Freedom is not free

My friends, I hope we never forget thoseContemplating the blessing of freedom, wherever it may be found, one prime truth is evident: Freedom is not free. And for those of us who are the beneficiaries of those who paid the ultimate price for our freedom, the only method of repayment — the only way we can ever be worthy of their sacrifice — is if we do all we can to maintain the freedom that has been paid for and given to us.

In honor of all of our veterans, past and present, I’d like to offer this poem written by Commander Kelly Strong, USCG (Ret.) in 1981 when he was a high school senior (JROTC cadet) at Homestead High School, Homestead, FL. It is a tribute to his father, a career marine who served two tours in Vietnam.

Freedom Isn’t Free

I watched the flag pass by one day.

It fluttered in the breeze.

A young Marine saluted it,

And then he stood at ease.

I looked at him in uniform

So young, so tall, so proud,

With hair cut square and eyes alert

He’d stand out in any crowd.

I thought how many men like him

Had fallen through the years.

How many died on foreign soil?

How many mothers’ tears?

How many pilots’ planes shot down?

How many died at sea?

How many foxholes were soldiers’ graves?

No, freedom isn’t free.

I heard the sound of taps one night,

When everything was still

I listened to the bugler play

And felt a sudden chill.

I wondered just how many times

That taps had meant “Amen,”

When a flag had draped a coffin

Of a brother or a friend.

I thought of all the children,

Of the mothers and the wives,

Of fathers, sons and husbands

With interrupted lives.

I thought about a graveyard

At the bottom of the sea

Of unmarked graves in Arlington.

No, freedom isn’t free.

 

My friends, I pray that we never forget those who paid so dearly for our freedom.  Have a safe, happy and respectful Veterans Day.

Thanks for being part of my community. I’ll see you on the radio and the Internet.

The Blasingame Small Business Banking Rule of Thumb

For many years, I’ve made recommendations to small businesses with regard to their banking relationships called: The Blasingame Small Business Banking Rules-of-Thumb:

Photo courtesy of Notes From A Chair Blog

Photo courtesy of Notes From A Chair Blog

1st Blasingame Small Business Banking Rule-of-Thumb
A small business should have at least two banking relationships. If you’re turned down for a loan at one bank, you have another place to go where the person already knows about you and your business. One primary reason for this rule is because if only one banker knows you and your story, when he or she gets fired, promoted or otherwise leaves the bank, Murphy’s Law will dictate that it will happen when you most need a favorable banker.

2nd Blasingame Small Business Banking Rule-of-Thumb
At least one of the banking relationships should be with an independent community bank – that means locally owned and managed – and preferably your lead bank. I’m not picking on big banks, it’s just that most small businesses need to be given a little extra consideration for their character and past performance, which is typically not as forthcoming in a large bank.

Loan decisions made by large banks have two elements that may not give a small business this extra consideration:

1) The actual decision is made by a loan committee in another city, by people who probably don’t know the business owners

2) They rely heavily on what is called “credit scoring,” which is a computer program – each bank has its own proprietary model – that receives quantifiable information and produces a numerical “score”. If this week the bank has decided only scores of 18 or more are accepted, a loan request under 18 will likely be rejected. I’ve never heard of a credit scoring system that includes a variable for the applicant’s character.

Over the years, my Rules-of-Thumb have proven to be valuable to many small businesses. But since 2008, with all of the problems associated with big banks, those who have followed my advice were much less likely to find themselves without access to credit. This was because every independent community banker I spoke had emphatically said they had never stopped lending to their small business customers.

Recently, I talked with two presidents of independent community banks about working with small businesses and the health of the banking industry. First, Mike Menzies, who is not only the president of the Easton Bank and Trustin Easton Maryland, but he’s also the new Chairman of the Independent Community Bankers Association (ICBA). Mike’s also a long-time member of my Brain Trust. Secondly, there is Charles Antonucci, President of Park Avenue Bank in mid-town Manhattan.

They agreed with my advice.