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Listen to our interview with Randy Hopper and Jim Salmon of Navy Federal Credit Union   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes Apple and Apple Pay made a big splash in an announcement a few days ago. As one of the first financial institutions to embrace the technology and jump in with both feet, Randy Hopper and Jim Salmon are the perfect guys to talk with us about the impact this will have in the small business community. Check out this week’s podcast to find out how they think this will change the way small business does business and what the future is for credit cards. Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Serving over 375,000 listeners each month, this is The Business Fuel Podcast.  Good morning, I’m Patrick Wiscombe.  Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast today.  Coming up we’re going to talk about Apple Pay.  I think it’s an exciting initiative and it will make Apple a ton of money in the months and years to come.  But more importantly, I’m excited to get rid of my wallet. Ty Kiisel:  Yes.  This will have a big impact on small business.  That’s why I’m excited to have Jim and Randy from Navy Federal Credit Union on today.  They’re one of the first financial institutions to embrace this technology. Patrick Wiscombe:  Before we talk to them, what is your Forbes article about this week Ty? Ty Kiisel:  I’m a fan of the SBA.  I think they’re doing a lot of good things, particularly Maria Contreras Sweet.  She was talking about alternative lending and how it’s going to change the face of small business lending.  So that’s what I talk about. Patrick:  You can read all Ty’s stuff on Forbes.com.  Just do a search on his name, Ty Kiisel, in the upper right hand corner of the website.  Ok, let’s get to this week’s guests.   Randy Hopper is the VP of Credit Cards at Navy Federal Credit Union.  And Jim Salmon is the VP of Business Services. Ty Kiisel:  I’m the geezer of the group, and I’m willing to admit that.  We hear a lot about Apple Pay.  Is it really the big deal they say it is?  Is it really going to change the way we use credit as consumers and the way business owners interact with us that way? Randy Hopper:  I think the biggest game changer is the fact that they involved a lot of traditional payments ecosystem players.  A lot of the disruption we’ve seen lately is from those who try to get around the traditional payment systems.  Whereas with Apple Pay, it involves the networks, processors, and large credit and debit card issuers.  That’s really the game changing component. Ty:  When Jim and I were talking about this earlier in the week, we were talking about Smart Cards.  Is that technology and Apple Pay technology related somehow? Randy Hopper:  They’re related in the sense that they both make the payment ecosystem more secure from an issuer perspective.  Security is always top of mind.  Both have very strong security features relative to the existing mag stripe.   For small business owners, chip cards are really the more pressing payment instrument of today.  The fraud liability will be shifting in October 2015.  That’s not a mandate, but it’s a push to get more chip card technology into the market. Jim Salmon:  To build on what Randy said, in the coming year, a lot of small business owners will be faced with switching out their merchant card solutions and upgrading to be able to accept these new cards.  At the same time, they will need to decide if they want to incorporate a solution like Apple Pay. Ty:  And that will happen this time next year? Randy:  That’s correct, for EMV chip cards.  Small business owners should consider if their terminal will accept EMV and NFC, which is Near Field Communication Technology.  That’s what supports Apple Pay.  The key is understanding what the terminals are capable of. Patrick:  How does that affect companies like Square?  Is this going to have a significant impact on their business? Jim:  Navy Federal does have a relationship with Square and we do work closely with them.  They are working on updating their device that will be able to accept a card with the chip in it.  It is in motion and they will be a part of it.  One attraction of Square is the simplicity of it.   They keep their terms and conditions very simple.  They don’t require a contract.  A lot of our members who are start ups have gravitated to that because their business ebbs and flows, it’s not consistent.  That being the case, a solution like Square works very well for them. Patrick:  So I’m hearing you say you will be pro-actively contacting your customers to let them know change is coming and they need new hardware. Jim:  We have a dedicated team who is having those conversations and letting customers know the technology is changing.  The risk is also changing, especially next fall, and they need to be aware of it. Patrick:  Does it take a company like Apple to drive this kind of market change? Randy:  For Apple Pay, and the way Apple is approaching it, it helps that they have a large share of devices in the market.  Every movement they make is watched closely by Wall Street and the business community.  The key is their decision to include some of the traditional payment players into this solution. Ty:  The big comment among my colleagues in the office today was that they are really looking forward to not carrying a wallet anymore.  Do you think, with younger consumers especially, that small business owners will feel they have to embrace this technology or they will lose business? Randy:  I think Apple Pay will be more popular when the iPhone 6 becomes more common and people become more familiar with how it works.  It is a slightly different behavior from a payment perspective.  220,000 out of 8 million terminals in the US today support NFC.  That’s not a big number; less than 5%.   It’s going to take time for terminals to be available and for it to be a day to day part of the payment experience.  There’s time for small businesses to digest all the payment changes.   But it’s something to consider and be aware of. Jim:  Small business owners are also going to have to go through the evaluation of, “What do my customers want?  How do they behave?  What are they gravitating towards?”   They’re going to have to be very mindful of that.  They might strategically gravitate to this to differentiate themselves, at least locally.   We do know that consumers are going to start getting cards with the EMV chips in the next cycle when they need to get their cards replaced. Ty:  The smart cards have been in Europe for years.  That technology is pretty proven.  Jim mentioned earlier that next year there is a risk associated with making or not making the change of hardware.  Let’s talk specifically about that. Jim:  If you do not switch over, you could be liable for the chargebacks and fraud that might occur at your place of business. Randy:  At the point of sale, when there is a fraudulent transaction, the chargeback liability is going to fall on the participant that either does not support EMV or if both support EMV, it will go back to the issuer.  But the goal of EMV is to reduce counterfeit fraud.  If a business is faced with customers coming in with chip cards and they don’t support chip cards, after October 2015, any fraud that occurs at their store, they will be liable for.  Whereas today, the issuer is liable for that. Ty:  What exactly is Apple and the credit card industry doing to make sure this technology is safer? Randy: The key is that there is really no perfect solution to security.  But we can introduce effective layers that reduce the value of the data.  In the US today, we are seeing an increase in the instances of counterfeit fraud.  That’s when someone gets the information when you swipe your mag stripe and they create more cards that look just like your card.  A chip prevents that.  You can not duplicate the chip on a card.   In the UK, they saw counterfeit fraud go down to almost zero when they introduced chip cards.   The best part about Apple Pay is that the account holders number is not on the device and it is never passed through the transaction.  It works through what is called payment tokens.  When a cardholder enters their card into Apple Pay, the number goes to the payment networks.  The card number never goes back to the phone.  What goes back is a device number or token.  That token is held at the networks which is then mapped back to the financial account numbers.  So the issuer knows that token is associated with this account.  The token is only good on that one device.  It takes the financial account number out of the equation.  It uses device specific account numbers which can not be duplicated. Patrick:  Did you approach Apple, or did Apple approach you to become part of Apple Pay? Randy:  Apple approached Navy Federal to be a participant in Apple Pay.  We were thrilled because of how convenient, secure and private it is.  They approached us because member experience is always on our mind.  That was something that resonated with them.  We are one of the first 11 issuers to offer it. Ty:  I think if it’s safer for consumers, it’s huge.  And the shift in liability makes it important for small business owners to get on board, right? Jim:  Absolutely. Ty:  Otherwise, you as the issuer assume all the risk for fraudulent charges.  What would be the motivation for small business owners to adopt the new hardware? Jim:  It would go back to what their customers are using.  If you’re not set up for Apple Pay and you’re turning customers away, you’re going to go out of business.  Likewise, I think it would only take a couple of chargebacks to get an owners notice.  It is a little bit of a behavioral change that’s going to happen.   Correct me if I’m wrong Randy, but I think you have to leave your card in the machine while the transaction occurs.  No more swiping.   And with the phone, you have to tap it.  We’re not used to doing that.  There’s going to be some behavioral modification on both sides of the transaction. Randy:  Apple recognized that it had to be easier than using a card; and it really is.  The phone is ready to go and you just authenticate with the fingerprint and you’re ready to go.  It’s that simple. Ty:  How long do you think it will be before credit card companies don’t issue cards? Randy:  That’s something we’ve really thought about.  I think in the next 24 months, you will see on applications the choice to not issue plastic.  Plastics won’t go away.  But issuing plastic at the time of application will be optional. Ty:  10 years ago, I didn’t think the home phone was going away.  It’s going away. Jim:  With the advent of credit and debit cards, some thought checks would go away.  But they’re still holding on.  A lot of folks still use them.  Not as many as their used to be, but they’re still out there.  Small businesses are going to have to be versatile and accept multiple forms of payment.  Fortunately we’re getting away from cash and checks and those means to transact.  And hopefully replacing it with EMV cards and Apple Pay. Patrick:  Is this a good thing that everything is basically electronic? Randy:  From a financial institute perspective, we are very supportive of the electronification of payments.  In the last 50 years, think how much easier electronic payment has made life.   With the right controls and security in place, a cashless society can be very productive and accelerate commerce. Jim:  From a small business perspective, it has been a benefit because there is a cost to handling cash.  From a growth perspective, it is easier to accept credit card payments and these non-traditional forms of payment.  Customers might be willing to spend more.  They don’t have $25 cash in their pocket, but they know they have enough in their bank account.  They will make the bigger purchase. Ty:  It sounds like things are changing, and they are changing fast. Jim:  Absolutely. Patrick:  We will go ahead and wrap up this weeks edition of The Business Fuel Podcast.  As a reminder, you can pick up the podcast every Tuesday at Lendio.com/blog.  If you want to get the latest episode delivered straight to your device, go into iTunes and do a podcast search for Lendio.  Jim Salmon and Randy Hopper with Navy Federal Credit Union, thank you for being our guests today. Jim:  You’re welcome. Randy:  It was a pleasure. Patrick:  So for Jim, Randy, and Ty Kiisel, I’m Patrick Wiscombe.  Thank you for listening.  We’ll talk to you again next week. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com The post The Implications of Apple Pay for Small Business—Business Fuel Podcast #90 appeared first on Lendio.

Listen to our interview with 9X turnaround CEO Dick Cross   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes This week we’re talking to Dick Cross about the difference between being motivated by “duty” and “responsibility” when leading a values-driven organization to achieve peak performance. It’s not about looking at leadership interactions from a transactional perspective, but from how they align with your company’s stated values. Readable Transcript Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Coming up on today’s show, we have Dick Cross in Birmingham, Alabama.   We will be talking to him about duty and responsibility.  But first, let’s bring in Ty Kiisel.  How are you? Ty Kiisel:  I’m doing really good.  How are you? Patrick Wiscombe:  Great.  I know you had the first question for Dick, so go ahead. Ty Kiisel:  This is going to be a great discussion.  There is nothing wrong with responsibility, and there is nothing really wrong with a sense of duty.  But Dick identifies responsibility as a trap and I would like to know why. Dick Cross:  This really sort of focuses on the job at the top.  Thinking of your job in terms of responsibility really is a trap and it’s a pervasive trap.  We live in a transactional society these days.  We tend to think, “If I do something, I get something.”  And also the inverse, “If I get something, I owe somebody something.”   There is an ennobling sense that you feel you are being responsible to those dependant on you.  But it is a trap.  And the trap I see is that when we think of our responsibilities, we tend not to think about our dreams.  We get wrapped up in our obligations rather than our aspirations.  It is our aspirations and dreams that build great companies. Ty Kiisel:  You said something that really struck me.  We have become very focused on transactions.  Does this focus on responsibility hurt us in the long run?  Does it lead to decisions based on the wrong things? Dick Cross:  I think it has the effect of limiting potential.  It sets far too low a ceiling.  Create something that is aspirational rather than responsible.  I also think about it in terms of family.  I think about my own daughters and it’s easy to get into the trap.  You can think that I’ve done all these things for my child, now my child owes me good grades.  As opposed to thinking that I want my child to be happy.  That’s the payoff. Ty:  I like that you said that if you focus on responsibility, you are limiting yourself.  Seth Godden writes about being indispensable.  It’s not just enough to do your job, you need to be the lynchpin.  Responsibility kind of restricts that, doesn’t it? Dick: Exactly, Ty.  If you live your life in the grip of responsibility, and that’s what a mortgage is all about, I think we deny ourselves the opportunity to take risks.  In a sense we shortchange ourselves instead of pursuing a higher calling.  In the grip of responsibility, you have essentially given your life over to someone else to do what they want rather than what you want. Ty:  I think we both agree that at a certain level, there’s nothing wrong with being responsible.  But at the same time, how do you focus on your dreams? How does that relate to running a business? Dick:  The key is finding some time when you can get out of the mode of thinking the way we do most of the time in business.  I suggest one hour, three times a week.   Think about, “What’s the moral basis for what I’m doing?  What is my higher calling?”  Of course you have to be responsible to your bankers and creditors and all that.  But my business is really not all about just that.  It’s about doing something that nobody else is able to do that’s going to make a difference.  If you can think consciously about what your business means to society, you will develop a sense of duty.  That gives you courage and backbone that you won’t get anywhere else.  It gives you the willingness to put yourself at risk and to persevere.  That’s the greatest feeling of joy out there.  So many of us deny ourselves of that because we are always laboring under the responsibility to do what somebody else wants us to do.  It is worse in big, corporate environments.  There’s just not enough conversation about this higher call. Ty:  A lot of people would think that duty and responsibility are synonyms.  But in this conversation, they are two very different concepts. Dick:  There’s another idea to sort of split the atom and that is patriotism.  When most people think back to our forefathers creating the country, they think they did it out of responsibility.  If they were truly being responsible, they would have never created a nation.  They would have bowed to King George.  They were driven by a sense of duty and it put them at great mortal risk.  They wanted to create a nation that would be unimaginably beautiful for the generations that followed.  As you know, I’m a military guy.  What compels you to do something in the moment that you know is probably the dumbest thing you could ever do, is not a sense of responsibility to your commanding officer.  It is a sense of duty to the guy sitting next to you.  I believe that a business, especially a small to medium tier business, that is driven by duty, will accomplish things they could never do if they were driven by responsibility. Ty:  This might be considered corny by some people.  I am convinced that it is not money that motivates most people.  It is a sense of purpose and providing a meaningful value to some effort.  That’s what motivates people to perform at their best.  We’ve got to get on this band wagon, as business leaders, to strengthen the economy. Dick:  I agree with you 100%.  That’s an increasingly important part of the job at the top.  The job at the top is to create a maniacal organization committed to do something extraordinary.  The “millennials” and “nexters” really get it.  Studies were done a couple of years ago that showed people coming out of college were willing to take a 30% pay cut in order to work for a company that they felt was doing something good.  I think that’s a growing trend.  People at the top of companies are going to find themselves no longer at the top if they think that shouting orders is effective.  They will find themselves in a one man charge.  I still draw the organizational chart as a pyramid, but it’s upside down.  The CEO is still the tip, but it’s at the bottom.  That job is to inspire people to do what they would never do on their own.  That’s what duty is all about.  It’s creating an atmosphere of zeal.  Not because you’re going to get something out of it personally, but because it’s just a good thing to do. Ty:  So if I’m a small business owner, or I’m the CEO of a company, and I want to change the paradigm in my organization, how do I do that?  What’s the first thing I need to do? Dick:  It links back to 60 Minute CEO.  One of the themes in that is you need to spend time alone thinking.  What is the purpose of my business?  It doesn’t matter if you are finding a drug to cure cancer, or making M16’s.  It needs to have a purpose to make the world better and it is our duty to make that happen.  It takes time alone thinking in this weird way.  I counsel people to take some of that 60 minutes, 3 times a week to start working on one little phrase.  The first five words are, “My solemn duty is to…”   If you start working on that, it’s going to feel weird for awhile.  Eventually you will start having some ideas that are at a level of thought that is way beyond what you spend most of your time at work thinking about.  You will find answers that have to do with making other people’s lives better, making our world a better place to be, and making a contribution.  Once you get that in your mind, it becomes a moral compass. Ty:  Ok.  I’m the CEO.  I’ve just heard this and I’ve bought in.  I want to do this and the first thing I do tomorrow morning is gather my executive team together and we’re going to sit around the table and talk about this. Dick:  Wrong. Ty:  Why is that wrong? Dick:  Because you need to lock yourself in your office and shut off your phone and unplug your computer.  Sit down with a big yellow pad in front of you and write the words, “My solemn duty is to…”  Sit and look at those words and think about it.  It’s hard for people who aren’t practiced at this to spend more than 5 minutes.  But if you continue to come back to it, you will find moments in the day, when something totally different is going on, that you will get a blinding idea.  It will be compelling to you about how to finish that sentence.  Once you get it in your own mind, you can start to talk about it to other people.  This is not group work.  It’s not the least common denominator.  It comes out of an individual’s mind thinking soulfully about how they want to spend their lives.  Ty:  I’m going to put you on the spot.  You’re in Birmingham, Alabama starting a new venture.  Have you figured this out for where you are right now? Dick:  You know the answer to that…of course!  I spent about the first 90 days here thinking about what are the core values of this company?  What is it’s higher calling and what is it’s purpose?  I didn’t dream it up, this company has been here for 35 years.  In a sense, it’s a transformation.  It’s taking a great company and putting in the infrastructure and the soul, so that it can double and triple and more.  I use the metaphor of throwing a stone into a pond.  You create a little ripple with the folks you trust most.  Then they have a conversation with the next level out.  Then they have it with the next and the next.  If you ask the people in this company now, “What is the higher calling,” most will say, “LBMF.”  That means, “Life’s Best Moments Furnished.”  We sell spectacular outdoor furniture.  I think it’s the most beautiful stuff in the world.  Our purpose is to give people the best moments in their lives through their ownership and use of these products.  I have a little cottage on the shores of Chesapeake Bay.  I can arrive there at 1:30 in the morning after a horrible 10 hour flight and see this beautiful furniture sitting on the front porch.  I can flop down and think to myself, “Life is grand.”  It’s our privilege to give these experiences to other people.  That’s the higher calling of this company right now and it’s already making a difference in what was already a great company. Ty:  A couple of months ago we talked about how important stories are, especially for employees.  They can wrap their head around the mission through stories.  I’ve really enjoyed this conversation.  I will think about duty differently.   The way you described it is the way we should be running business. Dick:  Think about, “LBMF.”  It took awhile to get there, but when it gelled, it was right.  It is becoming the moral compass for this business right now.  I just know in my heart that if we stick to it, the rest is going to be great. Patrick:  You mentioned flopping down on the Summer Classics furniture at 1:30 in the morning.  How does that look to a customer?  Is it the experience of the employees?  Is it the shipping or the whole presentation?  What does it look like? Dick:  It will take us awhile for that to be assimilated into behavior.  You get ideas like this intellectually at first then they translate down into emotional resonance.  And then from emotional resonance, they drive action and activity.  I think when you call this company in 18 months, the phone conversation will be different.  The stores are spectacular.  I think it’s going to drive even more product.  We will get to the point where every decision will be run against, “Does this drive life’s greatest moments?” Ty:  There is a story about the early days of NASA.  They were having descent about getting a man on the moon.  President Kennedy went down to Florida to figure out what was going on.  He stepped into the men’s room and supposedly there was a janitor there sweeping up the floor.   The President said, “How are you?  What are you doing?”  The man said, “I’m putting a man on the moon.”  President Kennedy turned around, got back on Air Force One, and flew back to Washington because the janitor knew what the mission was.  I think that’s a wonderful story.  I hope it’s true. Dick:  I’ve heard it as well and my hunch is that it’s true. I choose to believe that it is.  My closing point is that I think there is a man on the moon aspiration in every business in The United States.  It just takes the person in charge to recognize it, care about it, and promote it. Ty:  I couldn’t say it better.  That was awesome.  We appreciate it Dick.  This has been a wonderful discussion and I totally agree with what we’ve talked about today. Dick:  Thank you so much.  Go to the website and look at Summer Classics. Patrick:  Yes, let’s plug it.  It’s summerclassics.com.  By the way, as I was looking at the website, I thought, “That would be nice to go home to right now.” Dick:  That’s the idea, to give people those experiences. Patrick:  Dick, thanks for being here. Dick:  I love doing this with you guys so much.  My tag line at the end of this is, “Life’s best moments…recorded.” Patrick:  Thanks again.  You can subscribe to the podcast in iTunes.  Just search on Lendio.  And of course, if you want to read what we talk about, there’s a transcript every Tuesday morning on Lendio.com/blog.  You can also stream the audio there as well.  So for Dick Cross, Ty Kiisel, I’m Patrick Wiscombe. Thanks for listening.  We will have a fresh edition of the show next Tuesday. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com The post Duty vs. Responsibility—Business Fuel Podcast #89 appeared first on Lendio.

Listen to our interview with Experian’s Joel Pruis Click here to play this episode Click here to listen to previous episodes Check out today’s podcast with Experian’s Joel Pruis to hear about the Small Business Index created by Experian and Moody’s Analytics and learn why it’s important to monitor your credit and what Experian uses to create their credit report. Readable Transcript  Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Serving just over 375,000 listeners, this is The Business Fuel Podcast.  Coming up on today’s show, we will be speaking with Joel Pruis.  He’s a Senior Business Consultant with Experian.  But first let me bring in the co-host and producer of the podcast, Ty Kiisel.  You were talking about one of your Forbes article before we started.   It was about Maria Contreras Sweet. Ty Kiisel:  I love what she’s doing at the SBA.  I love the focus she’s given to making the small business loan process faster and easier.  It feels like it’s more than just lip service.  She’s implemented things that are going to be really good for small business owners.  The strides she has made in the first 100 days of her administration have been significant and I’m looking forward to the rest of her run.  So yes, that’s what I wrote about in my Forbes article this week. Patrick Wiscombe:  You can check out all of Ty’s articles on Forbes.com.  Just do a search on his name, Ty Kiisel, in the upper right corner of the site.  Let’s go to Indiana now and say hello to Joel Pruis.  Joel, thank you for coming on. Joel Pruis:  Glad to be here. Ty Kiisel:  I’m really excited to talk to you today.  I’ve been going over your latest analytics report on small business.  I think you call it your small business index.  Some of our audience may not know what that is, so can you give us a little background on what it is and why you’ve partnered with Moody Analytics to do it? Joel Pruis:  The report, or index, describes the health of the small business segment.  So we use our Experian credit data and partnered with Moody’s macro-economic data to provide a perspective of how well small businesses are paying today.  We can also forecast how well small businesses will be able to pay their obligations in the future.  The index has been measured since 2010.  We’ve been seeing a nice progression of improving conditions and performance of small businesses across the country. Ty:  This is something we will be talking with you about once a quarter.  What’s the highlight of the most recent report? Joel:  It shows small businesses rebounded nicely from the first quarter of 2014.  They improved payments, reduced delinquency, and were able to obtain credit in the second quarter. Ty:  How is a business credit report created from Experian’s perspective? Joel:  At the onset of a business credit report, two factors come into play.  With the formation of a company, an LLC or a corporation, a public record is created.  Something that puts them on the map that they will be doing business.  Combine that with any creditors they might use.  That is a broad term including not only banks, but also utilities, cell phone bills, trade accounts like Home Depot, etc.  Anytime you establish an account with them and they report to Experian, we then establish a file under that business name and continue to add to it as more recordings come in to us.  Similar to the consumer side, but putting it under the business name instead of the individual. Ty:  The report that just came out said that business are getting better at meeting their obligations.  Does that mean credit scores are going up too? Joel:  Yes.  We actually saw a significant increase in what we classify as a generic risk score for Experian.  It indicates improving payment performance.  And as a result, we are predicting improving future payment performance based upon that risk score we have. Ty:  What’s the best way to build a good credit score? Joel:  First and foremost they have to understand the creditors they are doing business with are reporting to a credit agency such as Experian.  Second, they should be taking a look at their own business credit report.  Make sure the information is accurate.  And identify the particular issues that are showing up.  If you do something as simple as go to businesscreditreports.com, they would be able to pull up their particular business credit report.  They could identify issues that are potentially keeping their score from being better.  When you are in small business, cash flow is tight.  At the same time, if you start to delay payments to your trade suppliers, like Home Depot, that will have a negative impact on your business.  Thus the ability to maintain those accounts, or get new accounts, becomes hindered.  If you’re paying in a timely manner, that will help improve your business score. Ty:  We talk a lot about how in a young small business, it’s important to monitor and maintain both a personal and business credit score.  Experian is one of the few that monitors both consumer and business scores.  Can you tell us how to access our business scores with Experian? Joel:  Many people are familiar with consumer scores.  If you have 700 or better, that’s a very strong score.  Access to the business reports is a similar type approach.   For Experian, we go to smartbusinessreports.com.  You’d be able to then search for your business.  You’d be able to see who’s reporting your credit to us and how well are you paying.  Our scores are based on a scale of 0-100.  This scaling is really based on a percentile.  For example if you have a score of 72, it means you are paying your bills better than 72% of the businesses out there.  Behind the scenes, it tells creditors what the likelihood is that you will remain current for the next 12 months. Ty:  I’m an Experian customer and I get an update so that I look at my score at least once a month.  From a perspective of experience, why is it important for a small business owner to be monitoring his or her credit score on a regular basis? Joel:  It helps you make sure accounts are being reported.  It helps creditors to know that you are in existence, you are a viable business, you have other activity, and shows how well you are paying those other creditors.  The type of monthly service you described is available only on the consumer side.  So it’s extremely important on the business side to check every month to see what type of reporting is being done.  It’s important to provide an accurate profile of your business. Ty:  I think Experian wants to have the most accurate information they can.  Is that safe to say? Joel:  Definately. Ty:  So if there is an error, how does the business owner correct it?  How do they communicate with Experian and the vendor that has made the mistake? Joel:  On a business report, there will not be an identifiable creditor.  So first step would be contact Experian through our customer service resolution.  Indicate that you’re challenging that particular trade line as being delinquent.  We can then work with that owner to resolve the issue.  We’re here to help and work out any issues.  We want to accurately reflect the payment performance.  That’s in our best interest, the small business owners interest, as well as the creditors interest. Ty:  Once a mistake has been identified, how long does it take to make a correction? Joel:  Once we have been notified of a dispute, we do have some response deadlines and timelines.  I don’t know the specific number of days, but ballpark would be 30-60 days at the very latest. Patrick:  Let me jump in here a second.  If someone does have issues or disputes with their credit, do you recommend getting a credit repair company?  Or do you recommend dealing directly with the bureaus? Joel:  We recommend you contact the bureau directly.  We have a vested interest in making sure our data is as correct as possible. Ty:  If I’m an Experian customer and I have a dispute that gets settled, is it safe to assume the other bureaus will see that somehow?   Do I need to do the same thing with all of them? Joel:   You have to do the same thing with all of them.  There are different reporting lines. Ty:  I think this is a great service you are providing.  It gives us the ability to monitor our credit  and gives us insight into what a lender will be looking at.  It’s one of the most important metrics a lender is going to use.   Is there anything else you’d like to add as we wrap up? Joel:  One of the things we’re seeing right now is the improving conditions.  We will be doing a webinar on that in a few weeks.  It’s favorable conditions for small businesses to do well.  Be sure your credit profile is accurate.  Make your payments on time.  Make sure there is nothing you are doing unintentionally that will impact your future success as you grow your business and obtain more credit. Ty:  Is registration for the webinar open right now? Joel:  Yes. Go to Experian.com/b2b. Ty:  I’m excited to see the trends improving for small business.  I look forward to the webinar.  I will definitely be attending.  Thank you very much. Joel:  Thank you.  I appreciate the time and look forward to the next time. Patrick:  We’ll go ahead and wrap up this week’s edition of The Business Fuel Podcast.  As a reminder, you can pick up the podcast each and every Tuesday morning on Lendio.com/blog.  Or if you prefer, subscribe on iTunes.  Just go to the podcast store and search for Lendio.  And Happy Anniversary.  Today is the 3rd anniversary of our first podcast. Ty:  That’s fantastic! Patrick:  Ty, you also have a column in the Deseret News that we never plug.  Tell us about that. Ty:  I contribute regularly to the Deseret News, a local publication here in Salt Lake City. I talk about small business issues, like financing.  It’s rewarding to talk about something most small business owners really don’t understand until it’s too late.  It’s worth checking out. Patrick:  So for Joel Pruis, Senior Business Consultant with Experian, Ty Kiisel, my name is Patrick Wiscombe.  Thank you for listening.  We’ll talk to you again next Tuesday. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com   The post Experian and Moody’s Small Business Index—Business Fuel Podcast #88 appeared first on Lendio.

Listen to our interview with Jeff Sumpter of Lewis & Clark Bank   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes If you don’t know what a Bankerpreneur is, you’ll want to check out this podcast and what Lewis & Clark bank are doing to encourage their bankers to think like the small business owners they serve. I really like the simple five step approach they take to small business lending. Check it out… Readable Transcript Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  It is Tuesday, time for another edition of The Business Fuel Podcast.  Good morning, I’m Patrick Wiscombe.  Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast this morning.  Let me bring in the co-host and producer of the podcast, and just good friend, Ty Kiisel.  How are you this morning? Ty Kiisel:  I’m doing really well. Patrick Wiscombe:  We were talking to Dick Cross a couple of weeks ago about “bankerpreneurs.”  We touched on the subject. Ty Kiisel:  I wrote about it in Forbes.  I was introduced to Lewis and Clark Bank and I had to find out what “bankerpreneurs” are.   So I reached out and became acquainted with Jeff Sumpter, one of the co-founders or co-presidents of the bank.  These guys are putting their money where their mouth is.  They are walking the walk.  So I’m excited to talk to him today. Patrick:  Well let’s bring him in right now.  Jeff Sumpter, co-founder of Lewis and Clark Bank.  He’s the Chief Lending Officer and he comes to us all the way from Oregon City, Oregon.  How are you sir? Jeff Sumpter:  Very good, good morning. Patrick:  I am fascinated with the concept of bankerpreneur.  How did you come up with that title? Jeff Sumpter:  When we were getting the bank started and a couple of years in, we started thinking about what we wanted the outward facing bank to look like.  So we spent quite a bit of time talking about what we do and how we’re different.  The bankerpreneur name kind of came out of that.  Banking becomes kind of institutionalized and we spend a lot of time internally trying to avoid that.  We’re like any other business; our product just happens to be banking. Ty Kiisel:  Do you think giving your bankers the name bankerpreneur has made a difference in the way they treat their customers? Jeff:  That’s a really good question.  Is it just a marketing piece or is it something we really work on internally in our culture every day?  It’s really the latter.  The culture piece came first and the word bankerpreneur really put a name on it.  We strive to have everyone work on one specific goal which is, we’re here to help clients.  We do that from a perspective that we’re a small business.  We worry about the same things everyone else does when they get started.  The employees approach their job from more of a position of ownership.  It changes the mindset as you deal with clients. Ty:  You focus on business banking.  Do your customers see a difference?  Has it been a positive thing? Jeff:  I think it has.  Most of our business comes from referrals.  I think that proves the clients we work with have a good feeling about the bank.  We try to be very specific with the clients we work with.  We don’t pretend to be the right fit for everybody.  I think knowing who you are makes the client experience better.  If we know it won’t be a good fit, we can pass them on to someone who will be able to help them better than we can. Ty:  You don’t have bank branches, you have offices.  It kind of throws the notion of a bank on it’s head, doesn’t it? Jeff:  A little bit.  It goes back to know who you are as a company.  For us, we’re not a retail bank.  So having a branch every 3 miles in a specific geographic location doesn’t make sense.   We look at ourselves as more of a trusted advisor.  It doesn’t matter that we might be a few more miles away. Ty:  Do you feel like your business customers are younger because of this?  Or does it not matter? Jeff:  That’s a great question.  The age on our lending side of the business is pretty much all over the board.  On the deposit side, it tends to be a bit older.  Actually our deposits went up quite a bit during the recession. Ty:  Looking at your website, it doesn’t look like you have professional models.  It looks like you have real life customers who are willing to be on there.  Is that the case? Jeff:  Yes.  When putting together the website, we had a couple of requirements.  First, we weren’t going to work with a marketing firm that has worked with any other bank.  We do not view ourselves like anybody else and that has to be the starting point.  We don’t want to look like every other bank.  And number two, we will not use stock photos of people.  That’s not what our customers look like.  We have customers all over the board with different businesses.  Each customer is an individual and we wanted to get that across.  They are called partner stories.  I’m glad you picked up on that because it’s intentional and that’s certainly a focus. Ty:  I’m looking at the website and it really doesn’t look like every other bank to me.  It really feels different, and I really quite like it.  I particularly like the guy in front of a big press.  It looks like a diversified customer base.  So you’re not particularly focused on any one industry as much as a particular business size? Jeff:  I would say more than that, a type of customer.  That doesn’t mean what they do and what their size is.  For us, it’s really how they want to work with their bank.  Do they like that trusted advisor type of role?  If you want to shop every bank in town and get the lowest rate, that’s not us. Patrick:  What was your motivation for building this type of bank?  Did you have a bad experience with another bank? Jeff:  Most of us here have worked for one of the large banks in the state.  My business partner and co-president Trey and I were talking about how you need your best talent taking care of your clients.  Instead of having 5 mediocre people in a department, we would rather have 3 outstanding individuals.  That costs you a little bit more, but that’s what it takes to take care of your customers.  For a bank our size, you would probably see 30 employees.  But we run at about 21.  That’s intentional because we have much more capable employees. Ty:  I really like your 5 step program to making loans simple.  The first one is look forward.  Can you explain that to us? Jeff:  We started with, how do we view things?  How does it makes us different?  We really thought about our profits, especially on the lending side.  One of the things we heard from our clients is that they apply for a business loan and then they don’t know where it’s at.  They know they gave you a bunch of paperwork, but they’re not really sure what happens.  A lot of the time they find out they weren’t approved, but they’re not sure why.  So we really tried to think about what we wanted to do every time.  How do we make sure it works the best every time.  So the idea of looking forward is really getting to know the client upfront.  Right from the beginning we want to know the client’s business.  Not just the financials, but what do they do and why do they do it?  We want clients that are a good fit for us and this is where it starts. Ty:  The next step is the business 360.   Can you describe that? Jeff:  This is where the paperwork starts to come in.  You explain how the process is going to work and who else is going to be involved.  We like to have multiple people make contact with the client.  That way, the client has multiple resources within the company. Ty:  Is this where you get into the nuts and bolts of the credit score and that kind of stuff? Jeff:  That’s probably more of number 3.  By now we’ve looked at the financials and have an idea of what the client wants.  Then we get into the details.  You mentioned credit score.   That’s probably the last things we look at.  It’s really everything else that is much more important.   We don’t have some matrix that says what credit score is good and what one is bad.  It’s just a number and it’s too arbitrary.   Step 3 is really much more understanding the financials.  We have really great analysts that will go through all the information.  We then go back to the clients just once to ask questions.  Then we can move into step 4 which is bringing everything together. Ty:  I imagine there are some borrowers that are a slam dunk, easy decision.  Then there are others that might not qualify, for whatever reason, today.  What do you do with those borrowers? Jeff:  When we started this whole process, we tried to look for something we did really well.   One of the things we discovered is that if we can’t do x for a customer, we would go back to them and explain that we can’t do x, but we can do y and this is how we can set it up.  That’s something we do a lot.  Or if we just absolutely can’t help them, we refer them to other lenders we are aware of. Ty:  How do customers react to that? Jeff:  I think most appreciate it.  Even if they don’t understand banking, they understand their own financials.  They can see how it might be difficult to get exactly what they want.  Most people appreciate options.  When you show them in black and white, it’s easier to understand.  Showing them their situation and telling them what they have to do to get where they want,  then it becomes a little more real instead of just a “no” from a black hole. Ty:  Step 5 is the green light, the loan gets funded.  What do you do different after that takes place? Jeff:  Depending on what kind of loan it is, they will get a call from someone in the bank.  An introduction with a direct phone number.  Or we’ll have them come in for a meeting with the staff.  If there’s any other resources we can bring to the table, we will do it then as well.   For example, if they need an attorney, we can definitely get them in touch with people we know.   The best way to describe this is they’re in the family at that point. Ty:  If you’re a small business owner, how do you engage with you guys? Jeff:  We have our main office in the Portland metro, kind of southwest Washington area.  We have an office and experienced banker in Bend, Oregon.  And we just recently hired a very experienced banker in southern Oregon. Patrick:  We’ll go ahead and wrap up today’s edition of the podcast.  Our thanks to Jeff Sumpter, co-founder of Lewis and Clark Bank.  You can check them out online at  lewisandclarkbank.com.  Remember you can pick up a fresh edition of The Business Fuel Podcast every Tuesday at 9 am, Mountain time on Lendio.com/blog.  If you want to have the podcast automatically arrive in your iDevice, head over to the iTunes store.  Do a search for Lendio.  So for Jeff Sumpter, Ty Kiisel, I’m Patrick Wiscombe.  Thank you for listening.  We will talk to you again next Tuesday. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com The post What is a Bankerpreneur?—Business Fuel Podcast #87 appeared first on Lendio.

Listen to our interview with Jim Salmon of Navy Federal Credit Union Click here to play this episode Click here to listen to previous episodes Today’s podcast is a look into what one credit union is doing to help small business owners (including start-ups) find the financing and other services they need to grow and thrive. This conversation is a nuts-and-bolts discussion of what to look for in a financial institution as a small business owner. I’m a big fan of what Navy Federal is doing and any veteran looking for a financial institution should look into what they offer to see if it fits with them and their small business. Readable Transcript Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Serving over 375,000 listeners each month, this is The Business Fuel Podcast.  My name is Patrick Wiscombe.  Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast today.  If you’re on iTunes, just do a search for Lendio.  Or you can stream the audio from Lendio.com/blog.  Coming up today, we will be speaking with Jim Salmon from the Navy Federal Credit Union.  He’s the VP of Business Services.  So give us a little background about who Jim is and how you got involved with Navy Federal Credit Union. Jim Salmon:  I am a veteran.  The Navy put me through school.  And I became a member and fan of Navy Federal Credit Union way back in college.  I did my time in the Navy and went to graduate school.  I worked for some Fortune 500 companies.  I got involved in the credit union industry as a volunteer official helping manage a credit union for IBM employees.  I eventually parlayed the experience into coming to work for Navy Federal and starting a Business Services area for them over 10 years ago.  We’re here to provide guidance and services for them whether they’re in the military, veterans, or family members in starting, running, and growing a business. Patrick Wiscombe:  Let’s rewind the clock 10 years.  If you could contrast how things were then and how things are now, how have they changed? Jim Salmon:  I think the utilization and embracing of technology has definitely stepped up.  We have a lot of small business owners embracing mobile banking and mobile devices.  And in turn, remote deposits as well.  We also see a lot of business owners, when they are putting their business plans together, incorporating that aspect.  They are desiring an online presence and commerce.  It opens a lot of doors for small business owners.  But it also opens a complexity that wasn’t there 10 years ago.  Small businesses owners have to make the decision whether they want to do that or not. Patrick:  I always thought stuff got easier when you implement technology.  I never thought about the complexities. Jim:  It opens avenues of explosive growth potential.  It opens a door of potential risk you may not have thought of.  And it also makes your business 24/7, 365 instead of 8-5, 5 days a week. Ty Kiisel:  I’m a fan of what Navy Federal Credit Union is doing.  Back in May, I wrote a couple of pieces for Forbes about innovation in banking.  In my opinion, Navy Federal is putting their money where their mouth is.  They’re walking the walk, not just talking the talk.  About 70% of their small business customers are startups which are super tough people to work with and make profitable.  But they seem to be able to do it.  So my first question to Jim is, why startups and how are you making it work for you? Jim:  We’re owned by our members.  We’re owned by people that come to us for services.  In turn, we’re listening to our members and paying attention to what they’re saying. Ty:  What would you suggest to other folks who are a small credit union so they could have a stronger presence in the small business market? Jim:  You have to understand it’s not going to be a panacea for any financial problems your institution might have.  It’s a slow process.  In dealing with a lot of startups, these folks go into it part time.  They have to make the decision if they’re going to use their personal credit cards or do I get a business credit card.  Do I use my personal checking account, or do I keep it separate so I know what’s going on?  They don’t need a lot of sophisticated products.  That’s basically what we’re providing to our customers – services that they’re very familiar with.  It hasn’t been easy, but it’s been fun.  I have a team of over 30 development officers that speak to these business owners on a daily basis.  I think that’s something these community banks have to have out there. You have to have some expertise to talk to these folks.  They want guidance and advice.  They want someone to bounce ideas off of and point them in the right direction.   We’re trying to be advocates as well as advisors and quasi mentors. Ty:   You said a couple of things that resonated with me, advisors and quasi mentors.  We talk to lots of small business owners every day and we tell them they have to have their financial house in order.  Can you describe how you advise people to be a better borrower? Jim:  Our team has the difficult discussion sometimes of telling people they might not be ready now because of ABCD.  So let’s talk about how you can become ready over the next 3,6, or 12 months.  For small businesses to make a run at it, you have to have capital to back you up.  Small business owners need to realize a lot of the initial money you put into the business, you might not be able to pull out for awhile.  You are going to have to keep it there.  And also, you’re going to have to keep piling it in.  You may start out strong, but you’re going to hit a lull. You have to have money set aside to get you through that lull.  Owners have to realize that a lot of the burden has to be carried themselves.  Financial institutions can’t always pony up all they need. That’s part of the initial conversation my people have with owners.  You’ve got to save up for this and you’ve got to do homework. Ty:  But spending that time with your customers is kind of expensive isn’t it?  How does the credit union justify the expense? Jim:  It’s a balancing act.  A lot of our members have other products and services with us.  You have to invest a little bit of time and effort and in turn, hopefully you will build up some loyalty and they will come back and get more products and services from us.  It’s all about the relationship with the credit union in it’s entirety.  I want them to use all that Navy Federal has to offer.  We want to be the first institution to give these personnel a credit card or a vehicle loan.  They remember that. Ty:  You always see the bank billboards that say, “Relationships are important.”  But I don’t think any of them are doing what you are.  When you say, “Relationships are important,” I feel like you are taking it to another level.  You are actually sitting down with a business and taking a little bit of ownership.  I think that’s really important and that makes you innovative.  How is that received by your customers? Jim:  They are respectful of the frankness.  But they know we will work with them.  And the fact that they are talking to a designated business professional is very meaningful to them.   Overall, the conversations are very good.  Some folks are disappointed, but if you leave with a game plan, it’s better than a straight out “no.”   If you know 3 or 4 things to work on, that’s better in the long run. Ty:  Do you think that helps them for the next time?  Do people take your advice and make the moves you suggest? Jim:  They do.  It’s a solid representation of character for these business owners.  As business lenders we look at a lot of things, but character is very important.  Capital is very important, and cash flow is important. Ty:  You have grown since the recession in 2008.  Your business is getting bigger instead of smaller.  Are you seeing that it’s getting easier, or is it still a challenge for small businesses to get the funding they need? Jim:  Navy Federal is continuing to grow.  And I think a lot of it is positive word of mouth between members.  As far as the availability of business credit, the confidence of small business owners has improved.   They see sales improving and maybe the potential of adding 2 or 3 employees.   Or they see that it might be time to replace equipment or vehicles.  They are more comfortable now than they were 2 or 3 years ago.  In addition, people’s personal balance sheets have gotten better. Ty:  What do you have to do to be a member of Navy Federal?  What’s the qualification requirement? Jim:  We cater specifically to all the Armed Forces and Department of Defense.  If you or a family member are affiliated with any of the services, or are with a company that works for them, you probably can join Navy Federal without an issue.  We’re going where our members are. Ty:  Jim, maybe to wrap up, how do people get ahold of you?  What’s your web address? Jim:  The best way to get to us is online at NavyFederal.org.  All the phone numbers for the various regions across the country are there.   We are putting a huge effort into updating our online presence and application.  We are making it easier and more intuitive for members.  Our mobile device applications are fantastic.  I also want to mention we have business owners in all 50 states.  That’s indicative of how easy it is. Patrick:  We’ll go ahead and wrap up with our guest Jim Salmon.  Again, the website is NavyFederal.org.  Thanks for coming on the show today.  Remember to pick up Ty Kiisel’s book, Getting a Business Loan  Financing Your Main Street Business.   You have several 5 star reviews on Amazon.  Congratulations. Ty:  Thanks.  Fortunately there are people who seem to like it.  Like I say regularly, “Buy two.” Patrick:  Yes, give them as gifts.  By the way, there has been a price drop.  On Amazon, it’s now $19.94. Ty:  If you’re looking for financing, it’s a great primer on all the options available.  It doesn’t hurt to be educated when you go in.  We cover everything from SBA loans to non traditional loans.  So check it out and I hope you enjoy it. Patrick:  So for Jim Salmon, Ty Kiisel, I’m Patrick Wiscombe.  We’ll will talk to you next week.  Thanks for listening. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com The post Navy Federal Credit Union—Business Fuel Podcast #85 appeared first on Lendio.

Listen to our interview with Shawn Sadowski of My New Enterprise   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes Silicon Valley or Wall Street isn’t the only place you’ll find really smart people. The folks at My New Enterprise are interviewing small business owners all across the country and finding that some incredibly smart people work on Main Street all across the country. In today’s podcast we talk with Shawn Sadowski about some of the things they’re seeing, some of the surprises, and why they’re so encouraged about the state of small business in the USA. Readable Transcript Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Serving just over 375,000 listeners each month, this is The Business Fuel Podcast.  Good morning, I’m Patrick Wiscombe.  Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast.  Coming up today, we’re going to head over to Kentucky and talk to Shawn Sadowski.  He’s the CEO of My New Enterprise.  But before we do, let’s bring in VP of Communications at Lendio, Ty Kiisel.  How are you? Ty Kiisel:  I appreciate the new title and I’m good. Patrick:  He’s the Director of all things written at Lendio, plus he’s an author on Forbes.com.  Just do a search on his name, Ty Kiisel, at Forbes.com to access his stuff. Ty Kiisel:  Thanks. Let’s talk to Shawn.  Mike Glowser and Shawn Sadowski are the founders of My New Enterprise.  They started riding bicycles in Oregon in June.  They are riding across the country with the goal of interviewing 100 entrepreneurs in 100 different cities to learn what makes these mainstreet businesses successful.  In my Forbes piece this week, I spoke with Mike about the trip.  Lendio decided to be one of the sponsors of this because we believe in small business.  We think the guys in Silicon Valley aren’t the only smart ones.  There are small businesses who are doing brilliant things to make incredible businesses, they just don’t get the same press.  Shawn, why don’t you tell us from your perspective what you’re doing and why you’re doing it. Shawn Sadowski:  Let me give you a little background about our company and what we do.  The company was founded about five years ago.  We started traveling all over the country and the world, documenting stories of successful entrepreneurs.  Our goal was to be able to profile these entrepreneurs and provide insight and resources for students and other entrepreneurs to create successful ventures.  We can learn best from those that have already paved the path.  Instead of having a professor stand in front of a class and tell you how to build a business, let’s go out and document these stories from real entrepreneurs and see what we can learn from them.  Let them do the teaching.  We’ve been following some research that suggests there has been a real surge in entrepreneurship in small town America.  So we really wanted to focus on small town America, Main Street businesses if you will.  As a whole, those businesses make up a bigger part of the economy than the Facebooks, Googles and other big boys.  So many of these stories go untold.  We decided to do it by bike because it was a way to really slow down.  To pass through cities, get to know the businesses and get a feel for the landscape.  Don’t rush and really understand what makes theses entrepreneurs tick. Ty Kiisel:  That makes sense.  You said entrepreneurship is increasing in small towns across the country.  Why do you think that is? Shawn:  That’s an interesting question and I don’t know that I’ve got a specific answer.  But there really is a surge to wanting a simpler life.  Many people are having a desire to simplify their lives by moving out of the big cities.  Small businesses are alive and well in small towns all across this country. Ty:  You have been doing this for awhile.  I would imagine you went into this with an idea about the things you would learn.  What are some of the things that you have learned? Shawn:  One of the things that stood out is I’ve never realized the advantage that small business owners have by living in a smaller community.  The community really seems to rally around that business and want that business to succeed.  We’re finding the business owners are able to cater to that community and support their customers really well.  And they’re not fighting for space or attention necessarily.  They start a business and the market share is immediately there.  Not only that, the community pools to help the business succeed. Patrick:  You mentioned you have about half of your list that you’re going to interview.  How do you find the other entrepreneurs in the cities? Shawn:  We are very much on the ground doing the work.  As we go into town, we start asking questions of the locals.  We want to know who are the movers and the shakers.  Who are the cool companies that are really making it happen.  Some of our most fascinating companies have come from doing that. Patrick:  Give me the top two or three businesses that surprised you when you rolled into town. Shawn:  One of the neat companies that we found was a woman named Vicky Stobbe who is the co-founder of a company named High Street Companies in Newton, Kansas.  One of her companies is a home decor company.  And the other is a kitchen supply store with all sorts of neat things.  Her other company in Wichita, Kansas is named Red Bird Boutique.  It’s a funky, fashionable boutique for women.  So Vicky was fed up with working for somebody else and decided she would start her own company.  Because she started in a small town, the community rallied around her and the companies have just thrived.  Her store in Newton has become a sort of weekend destination.  People go up there just to go shopping.  So that’s a great example.  Dave Tibbits is the founder of Jackson Hole Whitewater in Jackson Hole, Wyoming.  He started the company 15-20 years ago and he has built up quite a following there.  He is know as the best provider of rafting services in the area.  They’ve branched out into accommodations advice and scenery advice to make sure their customers are taken care of.  Another great company, Gayle and Will Williams, founders of Idaho Sports in Grangeville, Idaho.  They produce the padding that goes on chair lifts for over 300 ski resorts all over the world.  So this small town in Idaho is doing international distribution, has dozens of employees, and is doing very well.  I could go on for the next two hours about the cool companies we’ve found. Patrick:  Have you found some good practices that you can bring back to your company? Shawn:  That’s a really good question.  These business owners are experts at creating more with less.  The traditional process taught in schools is that you come up with a great idea, find some money, then go find customers.  We have not found that to be the case with the entrepreneurs we met.  The idea is much more organic than that.  These entrepreneurs find something they are good at that the community would really benefit from.  They start off small and talk to the community members to see if they would be willing to buy.  The whole funding process and going out to find money is a result of needing to expand as opposed to needing the money to prove the idea.  They are very good at finding resources other than money to get their company off the ground. Ty:  What have you learned that surprised you as you’ve gone across the country? Shawn:  The whole community aspect has been very enlightening.  These small town entrepreneurs are experts at building communities and rallying people around them to support their business.  As I thought about that, I wondered how that would translate to companies in big cities.  The concept is that you have to find a community of people that love what you do and could benefit from what you’re offering.  And then provide phenomenal products and services.   The other thing we found is that not one of the people we’ve interviewed said that the reason they are in business is to make money.  There’s really a driving sense of purpose.  They love what they do and they want to be part of their community.  They want to stick around and it’s a really refreshing approach to entrepreneurship.  I think Silicon Valley has really hijacked that concept.  The focus for small town entrepreneurs is on community, taking care of people, and providing great services.  It’s not on finding an exit strategy. Ty:  These are people that run the business because they know somebody needs to run the business.  But they really love getting their hands dirty in the running of the business. Shawn:  I can honestly say that the vast majority of entrepreneurs have a passion for what they do.  There’s a reason for why they started their company that far exceeds making money.  They like doing the work of their business.  They like engaging and interacting with their customers.  They like being a part of the creative process.  When they’re out there and involved in the process, they really have their finger on the pulse of what their customers want.  They’re able to shift and adjust based on feedback from the community.  If they were in the 12th floor office, they wouldn’t be able to make the adjustments that will ultimately make their company succeed. Patrick:  You mentioned that small businesses have an advantage because they can move so quickly.  Have you talked to anybody that had to change their entire business because of feedback from the community? Shawn:  It’s typically not a drastic change, just small pivots.  Virtually every entrepreneur has said that the business they have today is not the business they had when they started.   They’ve had to shift and pivot based on what the community wants. Ty:  I feel encouraged about business in small towns across the US.  Are you feeling that or am I just getting excited because I like these stories? Shawn:  I’ve been think about that.  I’m from Salt Lake City, Utah.  We’re a big city; not a Manhattan or Los Angeles, but we’re not a small town.  I’ve heard these stories over and over and I think there are some real advantages to starting a business in a smaller town.  I’m extremely optimistic and encouraged by what we’re learning out here.  There are endless opportunities and there’s a much clearer path that what we ever initially thought there would be. Ty:  One of the reasons you’re doing this is for an upcoming book.  When will that be available? Shawn:  To put all this data together will take some time.  We anticipate the book will come out next year, in 2015.  But we are posting videos from the tour on our website, mynewenterprise.com.  We’re creating short, documentary style videos about many of the entrepreneurs so you can learn about their companies.  The goal is to take all that video and create new training programs that will help inspire entrepreneurs to create new companies.  We’re having a lot of fun. This is our passion. Our hope is that we’re creating something that will help people and make a difference.  We appreciate you helping us spread the word about what we’re doing. Patrick:  It looks like you have another week on the road. Shawn:  We’re ending the tour in Yorktown, Virginia.  Then we will head up to Washington DC for a few days. Patrick:  You can follow their adventures on mynewenterprise.com.  Shawn, good to have you on the podcast.  Good luck for the next week. Shawn:  Patrick, Ty thank you so much.  It was a pleasure chatting with you. Patrick:  Remember you can pick up a fresh edition of the podcast every Tuesday morning on Lendio.com/blog.  Or you can subscribe to the podcast on iTunes.  Just do a podcast search for Lendio.  You can also read a transcript at Lendio.com/blog.  That will do it for this week’s edition.  So for Shawn Sadowski, Ty Kiisel, I’m Patrick Wiscombe.  Thank you for listening.  We’ll talk to you next Tuesday. Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com The post 100 Small Businesses in 100 Towns—Business Fuel Podcast #84 appeared first on Lendio.

Listen to our interview with economic professor Scott Schaefer   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes Economist Scott Schaefer shares what he and his colleagues learned doing the research for the book Roadside MBA. There’s a lot of things we can learn from what makes small firms successful. In fact, Schaefer suggests, “Wall Street isn’t the only place you’ll find really smart business people.” Check out today’s podcast and learn about some of what Schaefer and company learned exploring small businesses around the country. Readable Transcript Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network.  Bringing you interviews with top business professionals and business financing tips to fuel your American dream.  This is The Business Fuel Podcast heard exclusively on Lendio.com.  And now, here are your hosts, Ty Kiisel and Patrick Wiscombe. Sponsorship:  This podcast is sponsored by Lendio.com.  The online source you need to find the right business financing to grow your company.  Check them out for free at Lendio.com to get your business growing right now. Patrick Wiscombe:  Serving over 375,000 listeners every month on Lendio.com/blog, this is The Business Fuel Podcast.  Good morning, I’m Patrick Wiscombe.  Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast.  You can find us at Lendio.com/blog or on iTunes – just search on Lendio.  Coming up today, we’re going to be speaking with author Scott Schaefer.  The title of his book is, Roadside MBA.  But first let’s say hello to Ty Kiisel.  What is your Forbes article about this week? Ty Kiisel:  Basically I’m talking about private equity financing.  I recently met a company in Canada that’s not interested in tech or start ups.  They are looking for Warren Buffet type companies.  They’re looking for strong management teams who are not interested in selling but they need capital.  So I’m talking about that as a counterpoint as to what’s traditionally talked about in the press.  I thought it was interesting and if you look at the article, I think you’ll find it interesting as well.  It’s a different paradigm.   It’s a slow and steady wins the race type of strategy. Patrick Wiscombe:  So they’re not looking for an exit strategy? Ty Kiisel:  No.  They don’t want an exit.  They’re looking for long term relationships with a company.  I think we’re too much in the mindset of starting a business then in 4 or 5 years, get rid of it.  So that’s what we’re talking about in Forbes. Patrick:  You can see everything Ty writes in two places.  First of all, let’s plug Lendio.com/blog.  You can also go to Forbes.com.  Just do a search on Ty Kiisel.  Ok, let’s get to the main event.  We’ve got Scott Schaefer.  He holds the Kendall D. Garff chair in Business Administration, and is a professor of Business Finance at the University of Utah David Eccles School of Business.  He has a PhD in Business Economics from Stanford University.  It’s great to have you on the podcast. Scott Schaefer:  It’s great to be here. Thanks for having me. Patrick:  The title of your book is, Roadside MBA.  I guess the first question is, why did you go through the craziness of trying to write this book? Scott Schaefer:  The book is written by myself and two other business professors.  We spent  a good part of the last 4 years getting out and talking to owners of small and medium sized businesses.  We’ve written about what we learned and how you can apply the lessons that are taught in MBA programs to small business situations. Ty Kiisel:  This is not something three academics would typically do. Scott:  Probably not.  My co authors, Mike Nanzio at Northwestern and Paul Voyer at Stanford, and I met at Northwestern in the mid-90’s. We went our separate ways but we would see each other at economic conferences.  Have you guys been to an economic conference? Patrick:  No, but I can’t imagine actually wanting to go to one.  It’s not something everybody is probably into. Scott:  The three of us are economists, but we can only take so much.  So we got in the habit of renting a car and just getting out of the conference city, even if it was just for dinner.  That gave the three of us an opportunity to catch up and we just liked being out on the road seeing places.  One of those conferences we were in Boston so we drove up to Maine.  We wandered into a shoe store with 4 or 5 employees.  We got into a real interesting conversation with those employees.  One of the guys asked me if I wanted to try on some shoes.  I told him, “No.”  He came back 3 more times and I finally asked him, “What part of no don’t you understand?”  He then started to explain about the store’s secret shopper program.  The owner of the store would hire someone to go in and pretend to be shopping for shoes just to report back to the employees.  So now it’s a management conversation.  We three business professors learned so much in that conversation that we decided we needed to find more ways to do that. Ty:  What surprised you?  What were some of the lessons that blew your mind? Scott:  There were several things we learned about small business people.  To be successful, you’ve got to be sharp.  The people we met were extremely thoughtful and solving some really hard management problems.  It’s not just on Wall Street that you find good business brains.   Another thing was how small firms compete effectively with the big guys. The way they did it was by identifying what the big firms weren’t good at.  One great story is from Pueblo, Colorado and a company called GPS Source.  They’re a defense contractor and they make GPS gadgets that help the military keep track of where stuff is.  They do a good job of listening to the customer and then actually designing things the customer is looking for.  We asked the President why the bigger firms couldn’t do this.  He said that the big companies have a sales department and an engineering department and those guys hardly ever talk to each other.  And worse than that, they have completely different goals.  At GPS Source, they only have one water cooler.  Their best ideas come from chance encounters between a salesperson and an engineer. Patrick:  There’s a lot of truth to that.  It’s been my experience that software engineers and salespeople don’t always communicate well.  You have to talk in “nerd” a little bit.  That seemed to resolve a lot of headaches that I had personally.  So I totally agree with what you’re saying. Scott:  And think about the cost associated with doing that.  If you’re going to learn to talk “nerd” that’s time taken away from the customers.  Big companies have a real struggle with that sort of thing.  So GPS Source figured out how to do it better than the big guys do. Ty:  One of the businesses you profiled was Hoosier Sports.  I liked that story.  Will you share that with everybody? Scott:  That’s a great one.  Hoosier Sporting Goods is in Columbus, Indiana.  They are competing against all the big, national sporting chains.  So they compete by listening to the customer better.  In Columbus, the pee wee football league starts around the second week of August.  Mike, the owner, makes sure he has all his football gear in stock a couple of weeks in advance.  He told us that without fail, every year a couple of weeks after the football season starts, the big chains will start running their ads for football gear.   By then, all the kids already have their gear because the season has already started.  This is a case where the big companies miss out because of their scale economy approach to football gear.  They miss the market in Columbus. Ty:  The way he got into the business is a fun story.  Will you share that? Scott:  This was a strange one.  Mike told us that ever since he was 13, he knew he wanted to run Hoosier Sporting Goods.  This was the store he went to growing up as a kid in Columbus.  His father came home one day and told him a friend just bought Hoosier Sporting Goods.  Mike told his dad to let the man know that in 13 years, he would buy the store from him.  He missed it by 2 years because it was actually 15 years later.  But this was his whole goal growing up.  He took business classes and prepared and saved so he could buy the business. Ty:  Is this a common scenario?  Is it typical? Scott:  The 13 year old wanting to buy a business was not typical.  But we did talk to a bunch of family businesses.  People who grew up in the business knowing they wanted to be part of it.  Many of the entrepreneurs we talked to identified this desire later in life. Ty:  In the first chapter, you talk about scaling a business.  You shared a story about a business that makes parts for old Ford Pintos.  How do you do that? Scott:  One of the crucial things about scale is you’ve got to think about how your costs are going to change as you try to grow.  One of the ways you can think about profitability is the average price you sell for, minus your average cost of serving a customer, then multiply that by the number of customers you have.  One thing you have to be wary of is as you increase the number of customers, your average costs may rise.  That’s really going to squeeze your margins.  A steel rubber company in Hickory, North Carolina is a great example of scale economy.  This company makes parts that go in classic automobiles.  All the costs in this business are upfront.  They’re putting a huge amount of time, money, and resources to develop that capability.  Once they get an order, it’s just a matter of pulling the mold off the shelf.  This is a case of the more customers they get, their cost actually falls. Ty:  When you went out and visited with these small businesses across the country, did you recognize differences in the way the guys on main street finance their businesses and the way the big guys do? Scott:  We didn’t talk to any public companies.  We talked to a couple of companies that had angel help.  But one of the really important things for small business is their relationship with a banker.  Many of them said they had a really, really good relationship with their banker.  That was a nice lesson for us.  The small banks out there are performing a really important service with small business.  But we also heard a lot of complaints about bankers.  Financing is never easy, it’s always a really hard part of the business. Ty:  Has this experience changed what you do in the classroom?  Has it impacted how and what you teach. Scott:  Yes, for sure.  One thing it has done is to provide lots of great examples.  If I’m teaching a class about hiring, I’m able to pull in lots of great examples and stories.  I spent a few years as the Associate Dean of the School of Business at the University of Utah.  So instead of being just a professor, I was actually trying to manage the place.  Boy did I learn a lot doing that.  I know a lot more about the limitations of economics in part because I actually had to manage people. Ty:  I think this gives you lots of context which would make you a very interesting professor.  So if you’re interested in business school, go to Professor Schaefer’s class.  If someone wants to read the book, how do they find it? Scott:  We are at Roadside-MBA.com on the web.  And we’re on Twitter at Roadside MBA.  I think the book is available wherever books are sold. Ty:  It’s a great “how to” from a real in the trenches perspective.  You hear the stories of other mainstreet businesses, just like the audience we talk to.  I can’t recommend it enough, I think it’s a great book. Patrick:  The full name of the book is, Roadside MBA Backroad Lessons for Entrepreneurs, Executives, and Small Business Owners.  Scott thank you so much for coming on. Scott:  Thank you so much.   Patrick:  Let me remind our listeners that you can pick up the podcast every Tuesday morning on Lendio.com/blog.  You can also pick us up on iTunes.  There is also a transcription you can read.  So whether you want to read it, listen to it, or subscribe to the podcast, head over to Lendio.com/blog.  So for Scott Schaefer, Ty Kiisel, I’m Patrick Wiscombe. Thank you for listening.  We’ll talk to you next Tuesday.   Bringing you interviews with top business professionals and business financing tips to help fuel your American dream.  This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com   The post Roadside MBA—Business Fuel Podcast #83 appeared first on Lendio.

Listen to our interview with Dick Cross   Update RequiredTo play the media you will need to either update your browser to a recent version or update your Flash plugin. Click here to play this episode Click here to listen to previous episodes It doesn’t really matter if you’re trying to influence your customers or your employees, check out this week’s podcast to learn what Dick Cross calls the two “sledgehammers” for creating loyalty. In today’s world, as more and more of the products and services sold by small businesses are commoditized by their availability online, building loyalty is critical to small business success. The buying experience is what sets one business apart from another—you might be surprised at what Dick suggests really makes the difference. And, it’s not features, functions, or price. The post Sledgehammers for Loyalty—Business Fuel Podcast #82 appeared first on Lendio.