Looking for a New Business. Start with a Start Up

Attracting new commercial customers is getting increasingly challenging for financial institutions. Startup businesses may be a great place to… well, start.   

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Looking for New Business? Start With a Startup!

Nov 13, 2017

Looking for a New Business. Start with a Start Up

Attracting new commercial customers is getting increasingly challenging for financial institutions. Startup businesses may be a great place to… well, start. 

According to the National Association of Small Business’s 2015 Economic Report, 69 percent of new business ventures are started from home.  And contrary to popular belief, these businesses are not being started by millennials, but rather by “seniors” aged 50-88. Nevertheless, online is the new normal, and having a website is a necessary contributor to the startup’s odds of success.

Think small to think big!

According to the report, small businesses make up 99.7% of all businesses in the U.S., and businesses with fewer than five employees make up 62% of all U.S. businesses, a vital part of the economy. Over a third of our workforce is employed by businesses that employ fewer than 100 people

The rate of entrepreneurship in the U.S. has increased by 15% in the past two years, according to The Kauffman Index. In fact, more than one-half million new businesses are started every month. 

And it’s not just the size of the business that makes it appealing. Startup businesses are attractive commercial customers precisely because they are new. 

Many established businesses have already formed entrenched financial partnerships that can be hard to disrupt.  A TSYS 2016 U.S. Consumer Payment Study found that 47 percent of those surveyed felt that it was important to have all their accounts (personal as well as business) with the same financial institution. The more products a business gets from the same source, the more difficult that customer is to move. 

Startup business owners have not yet locked into a set of products or services, making them far more open to new opportunities.   As these entrepreneurs begin to grow and require more business solutions, a smart financial institution can be by their side, helping them to make successful decisions and finding the right solutions to help them manage their business effectively and efficiently. 

Solutions to serving the startup

Serving the smaller business customers does have its challenges due to its diverse set of circumstances in terms of location and product offering. But perhaps more than any other commercial customer, a startup business owners appreciates the value of solutions that can simplify their lives and help them grow.

What to consider when approaching a startup: 

  • Target online. Reach out to a startup customer online. More than 50% of small businesses now have a CFO or controller, according to the Wall Street Journal, making it easier to reach a target customer. Most startups don’t have time to peruse the offerings of each financial institution and walk in the door so plan a marketing strategy that includes online to capture the greatest section of new customers. 
  • Assign a dedicated rep. Small business owners are likely to appreciate financial advice and guidance from knowledgeable experts. Assigning a dedicated relationship manager to these customers has shown to improve service and build lasting relationships. 
  • Partner for products. A smart way to ensure that a startup is attracted to a specific financial institution is to offer as many solutions “under one roof” as possible to new customers. Forging partnerships with companies like TSYS® can offer new customers a variety of solutions that can answer their business needs. 
  • Bundle products. Research has found that the more products and services a customer gets, the better the retention rate.  Bundling solutions geared to new and small businesses can save them time and money, and help keep them from shopping around for alternatives. 
  • Benefit from word-of-mouth. A happy customer can be the best source of free and effective advertising. A positive reputation is a good way to increase business. 

Taking steps to better understand startup business customers and investing in their success is a win-win for commercial customers and financial institutions.  Not only will the time and effort put in to a startup provide an advanced level of service that increases the customer’s trust, it can create a relationship that could last far into the future.

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