CUs Have Large Small-Business Opportunities

There are 27 million small businesses, 10% of which changed financial providers within the past year.

June 21, 2011
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About 10% of small businesses have switched financial institutions during the past year, according to Leigh Sherman of Cornerstone Advisors.

“Small businesses are leaving megabanks because the owners are concerned about future access to credit,” Sherman notes. “They’re feeling alienated by megabank mergers that result in poor or inconsistent service. This represents an obvious opportunity for credit unions.”

And the opportunity is large. Consider that:

  • There are 27 million small businesses in the U.S., six million of which have fewer than 20 employees;
  • Fifty percent of all U.S. employees work for small businesses;
  • Small businesses spend $500 billion on financial products and services;
  • Banks with more than $50 billion in assets have 55% of the small-business market, while credit unions have 8% of the market;
  • Fifty-four percent of small-business owners have their business and personal accounts at the same financial institution; and
  • About 50% of small-business owners use online banking, 44% use direct deposit for their employees, 37% use online bill pay, and 30% use smart phones or PDAs.

“It’s a fallacy to assume loans account for most of the profit of a small-business relationship,” Sherman says. “In fact, deposit services account for about 60% to 70% of the profit.

“In the small-business relationship, the credit card is trump,” he continues. “Credit cards fund more small businesses than traditional bank loans because of the convenience factor and the 30-day float. About 60% of small businesses use credit cards to finance basically everything.

“And the use of social media is growing exponentially among small-business owners. Many business owners use Facebook and Twitter instead of developing their own websites.”

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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