Analysis using data at the Census Bureau finds about 35Ys ago startup companies as a percentage of all businesses were 16%. That percentage has dwindled to 8% as of the latest year analyzed (2009). Also of interest, the moist recent Census Bureau Survey of Business Owners survey found that just under 52% of all businesses were operated primarily from someone's home, so if you are looking for customers you may have to get out of the business parks and head into the neighborhoods. Be careful though, as the same survey found only about 7% of home-based businesses were bringing in $250k or more in receipts, while 57% brought in less than $25k.
Given this information as our starting point, let's consider other facts and potential opportunities for community bankers seeking to capture new customers. On that front, ask yourself when the last time was that you asked someone you knew to go online and try to open a bank account with your bank while you watched over their shoulder. You might be surprised, but new research from Javelin finds that in 2010, a whopping 55% of the 58mm US adults that tried to open a bank account online failed to do so. Perhaps more importantly, by reason, 28% gave up somewhere along the line; 19% were able to open an account but could not fund it; and 7% were rejected for various reasons. Eliminating as much customer confusion as possible; making the process as easy as possible; only collecting the minimum amount of data needed; and eliminating moving customers to other areas of the web site with embedded links are all key ways to improve your bank's own results.
Another area of interest is embedded within the branch. Customers that enter are usually seeking additional help and the more you can talk to them the better. Doing so helps your customer facing team gain valuable insight about the person's small business, offer cross sale opportunities and explore ways to increase your products sold per customer. One possible way to free up more time is through better branch capture. Celent finds that while about 80% of banks had some form of image capture in place at their branches by the end of 2010; only 6% had deployed check imaging through teller capture. Community banks should consider moving more to teller capture over time, as studies find small business customers not only appreciate the real time posting of deposits, but doing so also benefits the bank. Consider that teller capture can reduce transaction processing time by more than 20 minutes per day, or 380 hours per branch per year. Think of all the cross sell and customer service you could do with that sort of additional time to utilize. Moving RDC out to the teller stations also improves risk management by reducing fraud; shortening deposit processing to same day and reducing write-offs to name a few. It costs money to be sure, but it could make sense for your bank to analyze the customer base and think about the tradeoffs.
Finally, we focus on the branch itself. Here a report from BAI finds banks that have branch outlets representing less than 8% of total branches in the area generally capture less than a fair share of that market. However, since customers really do care about convenience, having 12% to 16% of branches in the area generally delivers the most desirable results (above that level, the analysis found offices compete for the same customers, reducing returns).