By Larry Myler, forbes.com
bank·able BANG-kә-bәl adjective 1. acceptable by a bank; 2. considered powerful or stable enough to ensure profitability. noun: bank·ability
The term bankable usually refers to a business having sufficient profit, assets, and liquidity to get a loan at a bank. The term is also commonly applied to a marquee-value movie star whose role in a feature film ensures a profitable return.In both cases there is adequate power and stability to ensure profitability.
Is your business powerful and stable enough to qualify for bank financing? If not, you may be forced to pay higher interest rates from alternate funding sources, or you might have to give up equity to bring in venture partners. The bank is your cheapest, but often most difficult, source of capital with which to operate and grow your company. A previous article describes some relevant factors in more detail.
In this article, I want to take a slightly different tack on bankability by asking the question: Are your B2B offerings bankable to your customers? In other words, are your offerings considered powerful and stable enough to ensure profitability for your customers? To increase your own sales, your best bet is to show how you can either reduce costs or increase sales (preferably both) for your customers. If your products and services already yield these valuable results, you must make sure to show in detail the quantified benefits in your marketing efforts, sales pitches, and proposals. You want your customers to feel like they can “take it to the bank” whenever they work with you. How could you enhance your value proposition by documenting increased sales and/or decreased costs for your prospects?
Omadi, provider of a cloud-based platform for towing and security companies, has established itself as a bankable company from the perspective of its customers. According to Scott Petersen, Co-founder and Executive Chairman, “We feel like we must create higher sales and lower costs for our prospective customers, or we shouldn’t expect to even get their attention. Once they see how we have positioned what we do to immediately help them produce what they’re in business to produce—more profit—our sales also increase.” One customer, Urban Tactical Security, describes how the Omadi system has streamlined a major portion of their operations, and enabled more sales. Urban Tactical management was so pleased, they posted a very visible write-up on their website. Which brings up another point: When you do produce financial value for your customers, let them tell the world about you.
Do you know of companies that have mastered the art and science of providing and documenting tangible value for their customers? I’d like to write about them.
Larry Myler is an adjunct professor in the Rollins Center for Entrepreneurship and Technology at BYU.