Many brokers are missing a huge untapped market by not focusing on SME’s. The numbers show the scale of the opportunity.
There 2.1 million businesses in Australia with 19 or fewer employees, according to the most recent data from the Australian Bureau of Statistics. That is around one in 12 people owning an SME.
In a survey by My Business, 45 per cent of SME’s said that they would consider using a finance broker but only 21 per cent actually were.
They are also geographically spread so chances are they are right where you are.
Small business owners start their businesses because they were good at what they do. For the stuff that they don’t know they usually have a team of people they refer to regularly to fast track a solution. The opportunity exists for brokers to join the team along with book keepers, accountants, solicitors, business advisors and insurance brokers.
Are you positioning yourself as their go-to person and becoming a trusted advisor? If not, why not?
Once you build a relationship with an SME and learn about their business, you can proactively make recommendations regarding expansion, cash flow, refinancing, debt consolidation and anything else you know would benefit them.
In my experience, the best way to start doing this is to:
Provide brilliant service for the transaction that they contacted you for and then stay in touch – at regular intervals call in and find out how their business is going, ask what issues they are encountering, provide referrals to professionals you know can help.
By understanding their business you will be in a better position to offer real solutions to issues they are facing. Find out about their future growth plans as these should trigger opportunities for you to stay in touch and be involved.
Speak their language and be able to explain things in terms of what their business needs like cash flow, paying employees and suppliers, seasonal variations etc. Demystifying finance and explaining what lenders look for when assessing finance applications can also be valuable information.
When they come to you with a problem, you need to be able to listen carefully and react quickly. .Be prepared to answer questions over the phone or email, and offer to visit them rather than them coming to you.
If they have come to you to refinance their residential property, use it as a chance to understand what business finance they have too. Do they have equity in their property that they can draw on to payout an expensive business loan or overdraft? Do you have access to other finance options that they could use?
Lastly, they can become a great source of referrals. They have customers that they are providing exceptional service to as well and can recommend a solution you offer. Some of their trusted advisors may also be other SME’s. If you are able to do all the above, it is likely that you will be top of mind when they are speaking to them as well.
My final bit of advice is to remember that SMEs have different needs to residential clients, so they need to be treated differently. They want to focus on doing business, not on dealing with lenders. So if you develop a reputation as a problem-solver, they’ll start chasing you for help and will also refer you to the other people in their network.
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