October 2015

News From The Louisville SBDC
Sell Impact Dollars
-Tim DeLonjay

Your sales team is selling for impact dollars, right?
Impact dollars are in many cases, and rightly so, the only dollars being spent by organizations.  In other words, decision makers are evaluating spending and must see a 4, 6, or 10 to 1 net return for the dollars being spent.  We even see previous decision makers now in discussions to validate decisions or attempting to “convince” CFOs, controllers, CPA’s or investors as to why they want …

It is agreed, close inspection of spending is respon-sible and reasonable.  Is your team having this deep discussion with your prospect or are they leaving the prospect to figure it out alone?  Does your team believe they can?  Do they know how?  Are you examining to see if your sales team can perform the necessary behaviors?

When decision makers are left to work this through, that means the sales interview likely ends with, “Sounds good.  I have to think about this.”  The real problem here is the fact that the information the prospect has to work with is a surface level issue with a generalized impact assessment and a price to fix it.  Even worse if we aren’t in front of the decision maker to begin with, add that to the list and reduce the closing ratio by another 75%.

If the prospect’s issue under consideration is miraculously the only one on his or her plate, you might have a chance.  But, they are still likely to delay spending.  In fact, this issue is one of many.  If it ranks 2nd, 3rd, or 10th based on measurable 
returns, fluff up your pillow. You’re going to be waiting a while.

When left to figure it out, decision makers do not drill down into the true and total cost of the issue for the organization.  Costs which may include cascading effects into other areas, additional resources required to continue with the problem unchanged, lost opportunity costs, and any number of other impacts.  It is unlikely they know or will take the time to measure the Total Cost of the Issue, much less the multiplier for how long it has been happening.  Now, where are their impact dollars best spent?

Without these measurements there is no T.C.D. – Total Cost of Delay conversation when the prospect goes into stall mode.

A note of clarity: these total cost conversations are lost on non-decision makers.  They do not know the dollars and they do not feel the impact.  They do, however, have a clear line on the company’s initiative to cut spending.

If your sales interview fails to uncover total impact and you rank too low to qualify for the available impact dollars, but you have validated yourself, you’ll be invited to stick around.  They don’t want to lose you.  Prospects may say “no for now”, “we’ll take another look at this next quarter – next year.”  At that time you will have the (costly) opportunity for a “do-over” – new sales interview, rework, or re-price lower (because that’s the assumption as to why they didn’t contract the last time) and hope that you have somehow moved up in the rankings, which you don’t even fully know. 

Examining attitudes about responsibilities in the sales interview is a great first step to this change.  Does each team member know and believe that it is within their control and responsibility to uncover impact dollars?  Once proper attitudes are established, your sales agents must commit to the behaviors to have this discussion and to have it with business owners.  Finally, do they know how to have the conversation?  What questions and how to ask?  Do they technically know how to identify the underlying issues and related costs?  Complete and perfect this triangle to shorten sales cycles, dramatically increase closing ratios and produce higher profits.

What’s next?  Inspect your closing ratios and the respective profit margins.  If the results are unacceptable (or should be unacceptable), figure out whether impact dollars are being targeted.  In your inspection of sales interviews ask your sales team what is the total cost of the problem for the prospect.  If the response begins with “I think …”, “Obviously …”, “Probably …”, “I don’t know …”, then it is doubtful you are getting total impact and the available dollars.

On Tuesday, October 13th, Tim will present "Hiring the RIGHT stuff." To learn more or to register, visit https://hiringrightstuff.eventbrite.com

Tim DeLonjay, Director  Impact Sales Systems,  (502) 690-5486 or email at Tim.DeLonjay@ImpactSalesSystems.com Tim eliminates the #1 challenge facing business owners today…Top Line Growth. He does this through a proven method of behavioral change to create sales production results.

6 Steps to a Business Loan

As an entrepreneur, you may be faced with the challenge of acquiring a business loan as your consider launching a new business or expanding an existing one. To be successful, you must be strategic, prepared and organized. Your greatest chance for success lies in being able to clearly understand and communicate how much money you will need, why you need it, what you’ll do with it and know when you need it.  Here’s my 6-step process to getting that business loan you need:

1.    Prepare personally – Get a free credit report from one of the credit sites.  Make sure there are no mistakes and if there are listings of non-payment see what can be done to mitigate any issues.  Download a personal financial statement and fill it out.  Any financing source will require this so it’s best to be prepared. You will also need to copy three years of your personal tax returns for your loan package.
2.    Prepare your Business Plan –   A business plan will identify all uses for capital whether it is for a startup or an existing business.  In fact, until you have finished your business plan you probably won’t even know how much money you really need. A good business plan will also have detailed financial information including several years of projected financials as well as several years of past activity for an existing business.  You will also need to include details as to the uses of funds and an analysis of the market opportunities that make repayment of loans likely.
3.    Identify potential lending sources – All lenders are not created equal.  While some banks say they want to work with small businesses, often that is just PR. Local and regional banks are best. Make a list of at least 8. 
4.    Plan your presentation – Put together a professional looking presentation to give to the loan officer. Have ready everything the loan officer will need including tax returns, personal financial statements, and your business plan. Have everything professionally bound and include charts, spreadsheets, leases or anything that will help sell your opportunity.

5.    Practice your pitch – A commercial loan officer is more likely to go to bat for you with the loan committee if he believes in you and your opportunity.  Practice trying to sell your idea to some business professionals that you know that have gotten a business loan.
6.    Make an appointment – Loan officers are busy so be mindful of their time.  When you make the appointment briefly explain what you’ll be talking about and how much time you will need.  Again, all lenders are not created equal so visit several.

Need a Loan to Expand or Start your Business?  We Can Help!

Despite what you hear in the media about Shark Tank, Angel Investors or Crowdfunding, the most common way to fund a startup or expand an existing business is still good old fashioned debt.  And, you don’t have to take on a bunch of partners to get the money either.  While it can be difficult to get a small business loan, it’s not impossible.  Banks are flush with cash but new, tighter lending guidelines mean you have to have a solid loan proposal. 

While we cannot guarantee financing, the Louisville SBDC team of experts will work closely with you to prepare all the necessary documents and projections you’ll need to make a solid presentation with lenders. With a comprehensive loan proposal in hand, your advisor can make recommendations as to likely financing sources and make initial introductions.

The goal at the Louisville Small Business Development Center is to not only help you obtain a loan, but to simplify the process. While we do not make business loans, we know that proper preparation increases success. And to help you succeed, we have developed the expertise, tools and connections to financing sources that can save you time and offer you greater access to financing possibilities.
Our mission is to help startups and existing businesses get capital so they can grow and hire more people.   Through our extensive experience, we’ve developed a process that can help you get the financing you need.  While we can’t guarantee success, we’ve helped enough people that we know what lenders are looking for.  Let us help you navigate the funding maze.
Helping to make your small business dreams a reality is our ultimate purpose.  And, we are very good at what we do.
If you need a business loan to start or grow your business, contact me.  I’d like to help.
Dave Oetken david.oetken@uky.edu  502-625-0012

David Oetken
Center Director,
 Louisville SBDC

Email David
Dave has worked with the KSBDC for since 2011. Dave began his business career in the sports/entertainment industry, primarily in ice skating and ice hockey. He has owned and managed three ice rinks and earned the Manager of the Year award from the Ice Skating Institute of America. In addition, Dave was operations manager for several professional ice hockey teams in both the East Coast Hockey League and the American Hockey League. He has also owned, operated and sold several businesses in the food industry. From there he moved into the restaurant field, owning and operating a number of franchise concepts. Since 2005 he has owned Louisville News Company, one of the largest distributors of thoroughbred horse publications in the eastern United States. David has a B.A. and M.B.A. from Bellarmine University. Dave has his Export and Trade Counseling Certification from the U.S. Small Business Administration. He remains active in his community and is a past vice chair for GLI’s Small Business Innovation Committee.
502-625-0012 l david.oetken@uky.edu

Can’t Get a Business Loan?  Check Out the KIVA Microloan Program

Bad credit? No credit? This might sound like the start of a used car commercial, but it’s the reality facing countless entrepreneurs and would-be entrepreneurs who can't access the capital they need to start or grow their businesses. Enter Kiva Zip,created to connect under resourced entrepreneurs to capital.


Kiva Zip is a platform that crowdfunds 0% interest microloans for local low-income or socially-impactful entrepreneurs. It makes microloans of up to $5,000 (or $10,000 for farmers). In the last two years, more than $9 million has been lent to more than 11,000 small businesses, all at 0% interest. Loans come from a community of generous people lending in increments of at least $25. Money is dispersed and repaid via Paypal. The repayment rate is currently 89%, impressive when you consider that the only thing binding borrowers is their word.

Getting a loan from Kiva Zip is very different than getting a loan from a bank. Kiva Zip doesn’t care about collateral, credit score, or how much cash you have; but they do care about your character, your hustle, and your great ideas. What you’re putting on the line is your reputation. Kiva Zip relies on the concept of social underwriting. It asks borrowers to prove themselves by bringing their network to support to them. Kiva has found that if you have 15 or 20 friends, family members, customers, and acquaintances lend to you, you will pay back the loan. After you’ve recruited your initial lenders, your loan goes public to Kiva's network of more than a million lenders around the world. Those lenders also become customers and brand ambassadors. When they’re paid back, 90% of lenders choose to relend rather than withdrawing their money, meaning their $25 loan becomes $50, $75, or $100 of impact over time.


There's no better city in which to fundraise a Kiva Zip loan. Louisville's program has the support of Mayor Greg Fischer, who said of Kiva at the Kiva City Louisville launch in November 2014: “It’s good for the economy, but it’s also good for the soul of our city.” Kiva Zip also have incredible funding partners: Stock Yards Bank, which matches all Louisville loans dollar-for-dollar, the Rotary Club, which provides an additional double match to immigrant and refugee entrepreneurs, and SEED (Sowing Empowerment Through Economic Development), based out of St. Stephen Church, which is contributing to businesses and entrepreneurs based in Louisville’s West End. Loans in Southern Indiana are also matched by the Horseshoe Foundation and the Ogle Foundation.

In the last 18 months Kiva has funded 42 loans locally, 46% of them to female entrepreneurs and 26% to people of color. Each loan has dozens, and in some cases hundreds, of lenders. Much of the $228,000 that local borrowers have raised is flowing into Kentucky from other states and countries.

Last month, three woman-owned businesses opened their doors thanks to Kiva Zip loans.
Ricka and Chenica are hairstylists who quit their salon jobs and opened C&R Beauty Bar; Katie is a self-trained cook who opened her meal prep kitchen, Katered to You, in New Albany; and Madeleine is a personal chef opening Fond, a homemade grocery store.

As Ricka and Chenica explained, “Without a loan from Kiva Zip, we would probably still be months away from our business. However, that loan has meant so much more to us than a dollar amount: empowerment that we can do anything we put our minds to, we’ve become role models for others in our community and in other parts of the world, and a renewed hope in humanity in that complete strangers want to see us succeed as much as we want to succeed.”
Go here to learn more or apply for a Kiva Zip loan.

You can also contact Louisville’s Kiva Fellow, Josie Raymond, at josie.raymond@fellows.kiva.org.
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