VendorGuru - Size Matters: Customer Financing Makes the Small Business Seem Big

Aug 27, 2008

Size Matters: Customer Financing Makes the Small Business Seem Big

by Richard Barrington, Columnist

A small business can be a mixed blessing for owners and customers alike. The most successful small businesses are those that can accentuate the positive aspects of their size while neutralizing the negatives.

Offering customer financing through an outsourced provider is one way to neutralize a potential disadvantage without eroding any advantages.

Small Business Service with Big Business Resources
Customers say they want small business service backed by big business resources, but their behavior doesn't always correspond to that belief. For example, look at how customers flock to big-box retailers--even as they complain about the poor service and inconvenient access associated with those stores.

In other words, customers want the more pleasant experience of small business service and environment, but when push comes to shove, they opt to sacrifice that experience for the resources of a bigger business.

Does this force the hand of the small business owner, requiring him or her to sacrifice a lean operation in favor of expansion of services? Not necessarily, when certain key retail services can be obtained through outside providers.

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Customer Financing
Customer financing is one of these key retail services. It is something people have come to expect from larger businesses, and something they are afraid won't be available from a smaller business.

Customer financing may mean a variety of things, such as installment loans, store-branded credit cards, and lines of credit. Each of these is a form of convenience to the customer. Each also benefits the retailer that can offer them, because they facilitate customers' transactions.

Perception and Differentiation
In addition to the direct benefits of offering customer financing there are intangible benefits. One is perception--the ability to offer financing can help a small business seem bigger.

In turn, these perceptions can help differentiate a small business from its competitors. It provides a resource that other local retailers may not all offer, while neutralizing one of the advantages larger firms have.

Obtaining Customer Financing Resources
The benefits of offering customer financing do not have to be obtained at the expense of running a lean operation. They can be outsourced to a finance provider which specializes in offering small business services.

For example, GE Money, a subsidiary of General Electric Capital Corporation, offers not just customer financing but support services as well. This complete offering of capabilities and support adds to the resources of a small business without substantially increasing overhead. It provides a cost-effective way to make a small business seem big.

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.


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