Is Your Business Bankable? Here's Why It Matters
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.
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