Credit unions: The heartbeat of intentional support for SMBs

I grew up in a family of eight kids. Born smack in the middle, my older siblings watched over me, and I looked out for the younger ones. We created our own little ecosystem, and amidst the growth milestones and occasional scuffles, there was always an underlying current of empathy and taking care of each other.

Those core memories helped launch my early career as a general contractor. Every relationship I built with landowners, project managers and vendors started with intentional, person-focused interactions: “Hi, I’m John. What do you need, and how can I help?”

Taking care of each other is at the heart of growth for credit unions, too.

Looking through the eyes of our clients, we see Riley’s nervousness as her budding landscape business takes root after years of freelance trimming. Or Jorge’s goals for his family’s yeast roll recipe, which is rising to the top of the local bakery scene.

When we get to know our clients for who they are, that’s when genuine interactions overtake standard transactions. And by asking small- to medium-sized business owners what they need and how we can help, credit unions find themselves in an enviable position: Helping a neighbor achieve their dreams while growing their business in the process.

“Leadership is a very human experience. And there’s nothing like the feeling you get when somebody knows you’re pulling to make their dream come true.”

Dreams are the catalyst for growth opportunities

Every SMB owner has dreams: starting or growing a business, delighting their customers and retiring with a solid nest egg. An SMB’s dream team could be as robust as a growing 500-person company or as lean as a solopreneur managing three side hustles.

Credit unions are known for putting members at the center of business decisions. Now progressive CUs are beginning to expand their focus to members’ professional endeavors, growing the bottom line for their customers and their own businesses.

When I was a general contractor in the ‘80s—well before smartphones, tablets and the cloud—I carried paperwork in triplicate (copies for me, the client and my company). I hand-wrote estimates and used paper checks to move services and projects forward. Today’s contractors have replaced analog forms with the hustle of double, triple or 10 times the digital business.

But they’re still just one person trying to grow their business while managing demand and finances and payroll from a tablet or smartphone in the field. A 2020 study found that SMBs give third-party vendors more than $500 billion on accounting and payment processes annually—surely, CUs can better serve their neighbors’ tech needs at a fraction of the cost.

Listen to the contractors, the landscapers and bakers. They need financial tools and expect them to be available. And if they’re not, they’ll lose business … and so will you.

Understanding SMB owners’ dreams and gaps in their user experiences provides a starting place to create bespoke products or services that could potentially help achieve their goals. What an amazing opportunity to make something happen beyond typical banking transactions, especially when 2 in 3 SMBs say their current banks don’t understand their needs.

Now, that’s not to say dollars and cents don’t matter. The ledger still needs to balance. But when we’re presented with an opportunity to care for people and prioritize SMB transformation over commoditized deposits and loans, we all reap benefits. This shift has been decades in the making, and it is throttling forward in the age of digital side hustles.

“People will tell you what’s not working, and you can find solutions to bridge that gap together. Not just through transactions, but through interactions.”

Why CU brands should prioritize the smallest businesses

The spirit of entrepreneurial endeavor isn’t new. James Robert Lay highlighted in a Digital Growth Institute podcast this summer that the rise of small businesses, especially in the online domain, has been notable over the last 30 years since the advent of the consumer internet.

Two generations of SMB owners have flourished in the digital age, with about 40% of people in the U.S. venturing into side hustles or micro-SMBs to bolster their livelihoods. Astute CUs are collaborating with these small business owners to tailor financial solutions.

The potential for growth in this sector is boundless, and a strategic, phased approach is the path forward.

Back in my days at Lockheed in the ’90s, we focused on addressing the unique needs within the organization. Expanding our client base to a multiple common bond, we conducted roundtable discussions to gauge new members’ retail banking requirements. Transitioning to serving community grantees, we retained an intricate understanding of individual requirements while keeping the broader community in perspective.

SMBs, especially micro-SMBs, form a pivotal part of the community’s financial landscape. When a CU leads in this realm, collaborating with SMB owners becomes essential for devising and, more importantly, personalizing services that align with their immediate objectives and future aspirations.

Engaging in meaningful, compassionate conversations with these business owners ensures staying updated on their evolving needs and industry shifts, enabling a proactive rather than reactive stance. Given that about 1 in 5 SMBs is seeking a financial institution that resonates with their vision, now is the perfect time to focus on understanding what really matters for them.

With great leadership and great care for our neighbors, people really feel that you’re really in it for them. And aside from the altruistic lift and the buzz from a new relationship, that interaction by extension accrues an economic benefit.

“At the end of the day, caring about people doesn’t cost your business anything. But there is an enormous cost in not showing that you care—losing clients’ trust, and therefore their business.”

Why entrepreneurs will choose you

With CU partners, I like to share three criteria that SMB clients are looking for in a financial brand:

  1. You see them and their real needs. Talk with clients and ask questions to map the gaps in their user experience:
    • “I have 10 jobs running at once and need to keep the accounts straight”
    • “I can’t pay my team or vendors through your app”
    • “My customers need a secure online payment solution.”

Replace the dated mindset of “If you build it, SMBs will come” with the question, “What can we build together?” Then translate their pain points into action.

  1. You customize solutions to make their work easier. Taking your clients’ needs to heart and following through with action shows that you care about them on an interactive level and not just a transactional one. You can create a scalable, future-ready banking solution that empowers SMB owners to prosper financially while fueling sustainable growth for a brighter future.
  2. Follow up to improve on their solution. Ask what is working and what isn’t. Revisit their goals and talk through how well the new solution is serving their needs. While one-size-fits-all tools can be a starting place, enthusiastically right-sizing and creating customized experiences is the true measure of your investment in SMB clients.

So, cheers to the rakers, bakers and candlestick makers who bolster the community ecosystem. Your institution can become an important part of turning an SMB owner’s dreams into reality—and earn a front-row seat as those dreams unfold. For a passionate CU professional, there’s really nothing better than that.

John Janclaes

John Janclaes

For more than 30 years, John Janclaes has successfully led strategic growth initiatives for financial services organizations. As president and chief executive officer of $2B Partners Federal Credit Union, John ... Web: Details