Small business owners have to think small to profit large. Good carwash operators know that attention to detail will build a carwash business better than most grand and sweeping business strategies might — keeping the lot scrupulously clean, the vending machines filled, the credit card machines working, and the landscaping pruned signals to customers that you will take good care of their car. Catering to your customers’ needs builds loyalty and repeat business. And that builds a strong business.
Three Ways to “Think Small” on Business Loans
Thinking small should extend to managing the finances of a carwash as well. An interesting example of this is in finding the right lender for your financing needs. Did you know, for instance, that small banks may be your best bet? Small banks (banks with assets under $10 billion) account for close to half of all business loans under $1 million, even though they are dwarfed in total lending by the giant mega banks. Local banks focus on lending in the communities in which they’re based, and on lending to small businesses. Smaller banks also display much more flexibility in loan approvals — because large banks rely much more on automated approval processes. Many small banks use automated processes as well, but they will apply much more personal review to every application. That personal touch results in small banks making more decisions to extend loans to smaller companies and in situations where the balance sheet is less than perfect.
It’s possible to get even smaller in your search for funding, by looking into some of the new Web sites that specialize in matching borrowers with credit unions and other small lenders. The way the sites operate varies, but in a typical format the prospective borrower specifies the desired amount of the loan and the rate they’d be willing to pay. The pool of interested lenders then bids on the loan, bidding the interest rate down. Not a bad way to go if other lending sources are not promising.
The final way to ‘borrow small’ has always been to turn to family or friends, which can unfortunately result in misunderstandings and damaged relations if loans are not repaid as expected. One new Web site has an interesting approach to addressing that dilemma as well, by offering an inexpensive way to formalize these types of loans with customizable documentation and repayment plans that all parties sign off on. Making this ‘smallest’ and most personal type of loan a little more formal and arms-length can be a very worthwhile thing, and make family gatherings happier too!
Laurie Sherman is Co-owner of Blendco Systems, LLC. Blendco manufactures a full line of detergents and waxes for the professional carwash industry. You can contact Blendco at: www.blendco.com.