Winning Business and Loyal Clients in Accounts Receivable Factoring
#III - The Strategic Planning Process Advice Desk
In the third in a series of articles aimed at assisting you in winning business and loyal clients, Mark Mandula, Principal, Vice President, United Capital Funding, offers his guidance from the viewpoint of an experienced business finance and factoring professional based in the US.

Tampa Bay Office:
United Capital Funding Corporation
146 Second Street N.
Suite #200
 St. Petersburg, FL 33701
727-894-8232

I will try to make my observations from around thirty years of hands-on experience in the financial services industry. Much of this experience has been from the “school of hard knocks!”. My comments are geared to any professional in the financial services industry, and this could be an asset based lender, accounts receivable factor, a broker looking for a funding source, or a professional who may be considering this as a career.

As a quick recap, I discussed in the first Article a series of ideas, attempting to answer the following question, “Is your firm a Service Focused Firm?” Questions were introduced at the end of the first article, to stimulate thinking and analysis of the organization.

In the second Article, I discussed the need for all funding organizations to have a well defined, focused purpose for their existence. In addition, all marketing strategies require a written plan in order to be successful. I closed the second Article in this series with this question: What is our purpose? In order for any business, organization, family or for that matter, individual to be successful, they must first know what their purpose is.

The Strategic Planning Process for Accounts Receivables Factoring
Step 1: SWOT

I make an assumption in this Article that you are familiar with the Business Strategic Planning process. There are an unlimited number of excellent publications available and information on the Internet about the steps to take to complete a written, strategic plan for your accounts receivables factoring company.

All businesses, regardless of industry, size, location, ownership or age need a written plan. No exceptions. In today’s global competitive environment, to operate a funding business without a plan is a recipe for failure.

For this discussion, I am going to focus only on the marketing related aspects of the self assessment, Strategic Planning process.

This is the first step in the usual Planning sequence, commonly referred to or called SWOT: Analyze Strengths, Weaknesses, Opportunities and Threats relative to the invoice factoring  . In my experience, you need to undertake all of these parts of the equation in order to have an outcome that is credible. Let’s walk through an exercise for each of the areas, and present some ideas on variables to examine on your organization.

Strengths; Critically assess what you believe are your organizations current strategic advantages or strengths, relative to serving your commercial receivables factoring accounts. These are the areas that you should “run” your organization to.

For example, several years ago we completed this exercise on our accounts receivable factoring firm, looking at all facets of organization. The list included the standard areas of analysis such as our strategic focus, leadership, rewards and punishment, marketing and sales, standards and values, communication and systems, policies and procedures. We now, as part of our ongoing Strategic Planning process, revisit and update this analysis on an annual basis.

The identification of current strategic strengths or advantages is also important, because it serves as the cornerstone for the product or service menu to be offered by your business. When we finished this strength self assessment, here is what we came up with for our firm in the most recent assessment:

It is important to note that our list of strengths the first year we did this was not this long. In fact, it was quite short. The identification of our weaknesses [see the next section] actually served as the “To do” list for us. The areas of perceived/actual weakness became the areas where we needed to improve quickly, and transform a “negative” into a “positive”.

Please recognize that every business funding firm will have a different set of these competitive strengths or assets. Your firm is unique and also recognize that it is very important to be honest/objective when stating that a given area or discipline within your firm is truly a competitive advantage.

The second step in the SWOT is the generation of your factoring firm’s weaknesses; both internal and external/marketplace. This self assessment process is not easy to do, and unfortunately, is the most commonly skipped or neglected part of the Strategic Planning process. It is, however, from my experience, the most important step in the process for the business finance industry. Without an objective, perhaps humbling self assessment step, the planning process is incomplete.

As human beings, none of us [myself included!] like to admit that we have flaws, or have weaknesses. This step in the process is much like procrastinating in daily life; for example, not scheduling an annual physical or checkup for fear of the results one might find. I can relate to this in my own life; how many times have we rescheduled the Doctor’s office visit, only to be “relieved” when we find out nothing is the matter?

We also completed an assessment of our internal/external weaknesses, as part of our planning efforts. This process was actually a 2 step process, analyzing our overall firm weaknesses, and then I completed an assessment of our historical marketing efforts. Because of their importance, let’s review the results of both.

The overall weaknesses for our factoring company that we developed were: