It’s a new year, and you may have spent some time setting goals and targets for 2018. At VITAL, we’ve been implementing the Entrepreneurial Operating System (EOS), a set of concepts and tools for business success. It’s been incredibly beneficial, and I find myself frequently sharing the basic EOS principles with our bank partners to an overwhelmingly positive response.
I’m going to share an overview of the EOS model and its areas of focus. There are numerous ways you can use the concepts for outstanding results this year, but let’s look at it in the context of SBA lending.
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When it comes to SBA or USDA lending opportunities, are you struggling through a small number of opportunities that just happen to come your way, or have you paved the path to create a high-performing small business lending engine?
Don’t worry, we’ve worked with many banks that are the former. Even if you are starting at square one with an SBA lending strategy, you can become efficient and profitable in a short amount of time – the only requirement is a willingness to consider different approaches.
The truth is, your conventional loan policies aren’t naturally conducive to SBA loans. Without a shift in mindset and some planning, you may find it difficult to achieve a level of success that really moves the needle. (And, really moving the needle is possible. Check out the math in this article.)
The good news is, developing the framework for success is simple. (But perhaps not always easy.) Creating the roadmap for a successful and profitable SBA/USDA program doesn’t require a 30-page plan and months of time. It just requires getting focused in the right areas. That's the key to experiencing truly significant results.
Here are the six areas of focus, and the questions I recommend you ask for each area.
Vision: What is the scope of your SBA lending program? This can mean a geographic area or certain industries. What are your goals, and how will you know when you’ve achieved them? Are you looking to hit certain financial targets, meet Community Reinvestment Act goals, or affect your balance sheet or income statement?
People: Who are the right people you need to put in place for success? Do they share the vision, and do they have the right skills?
Data: Who is the audience you are targeting? How many of them are there, where are they, and what are the metrics you need to ensure you're on course?
Issues: What are the internal and external issues that will keep you from being successful, and how will you solve them? This is where it is critical to evaluate the conventional loan policies, procedures and culture that are going to create obstacles for SBA opportunities.
Process: What will be the essential and efficient core processes you will follow consistently to serve your defined SBA market?
Traction: This is where the rubber meets the road. How do you make the vision reality? Adding some SBA information to your website isn’t going to cut it. This is where you bring together discipline, accountability, tools and an action plan to execute your vision.
Now, this is the part of the article where I’m supposed to tell you that you can just hire VITAL and not worry about any of this stuff. But, that wouldn’t be an honest recommendation for how to achieve the best results.
The most successful partnerships we have are with banks that have laid the groundwork for success by thinking about what they want to accomplish with an SBA/USDA program, and how they can develop the right culture and mindset for success. Then, a partnership with VITAL can yield attention-getting results because you can identify and pursue more opportunities without having to make all the investments in people and processes.
People and processes: those are the parts we have done for you. We’re always happy to share best practices in the other areas, too.
If you’d like to talk more about hitting your lending goals this year through a strategic SBA approach, contact me anytime.
P.S. – If you're interested in looking at the EOS model more deeply, you can start with this book.