Gary Ferguson, vice president of business services, joins “Money, I’m Home!” to discuss your business’s journey to financial stability. From loan applications to a growth mindset, you’ll find your answers in today’s episode of “Money, I’m Home!”

 

Transcript:

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00:07 Lynne Jarman-Johnson: Money, I’m home. From finance to fitness. Hi everybody I’m Lynne Jarman-Johnson with Consumers Credit Union, and we’ve got a great podcast. It’s about business. And you know what? We are in the business of helping business. And joining us is Gary Ferguson who does just that. He’s the Vice President of Business Services for Consumers. Gary, thanks so much for being with us.

 

00:27 Gary Ferguson: Happy to be here, Lynne.

 

00:28 LJJ: And I’ll tell you what. You’re rocking and rolling this year.

 

00:31 GF: We are. We are.

 

00:32 LJJ: You’re just coming back from a really exciting time. Tell us about your award.

 

00:37 GF: We received recognition as the number one small business lender for credit unions under a billion in assets, which is kind of fun because the credit union itself actually crossed over a billion back in June. So I kind of kid everybody that’s good because the next year I can get another award for being over a billion.

 

[chuckle]

 

00:55 LJJ: Absolutely. Absolutely. Well, congratulations.

 

01:00 GF: Thank you.

 

01:00 LJJ: I know it’s a lot of hard work.

 

01:00 GF: It is. But it couldn’t happen without having great people. And our team does an awesome job.

 

01:05 LJJ: So when you talk about your team and the types of businesses we serve, what does that portfolio look like?

 

01:12 GF: It spans over all types. So, if you look at our portfolio today for loans probably $100,000 and under, we’ve got probably right around 90 to 100 of those. Then you look from that half a million, actually you could go all the way up to a million. There’s probably… And that represents another $40 to $50 million of our portfolio.

 

01:37 LJJ: That’s awesome.

 

01:37 GF: And then we do have some larger ones a million and over that we do which… As we talk about that and the credit unions, that the folks in our community recognize that we do business loans, once you pass that hurdle the next one is, “Geez, I didn’t know you could do any that size.” Yeah, I can do mult-imillion dollar request today and everything. So it’s awesome. So I can work with sole proprietors, partnerships, corporations, all different sizes and everything. We’re looking at all types of deals and structures today.

 

02:10 LJJ: You’ve built a really big team. And I think that team is zeroed in and focused on partnership. When a business comes to you and they say, “Hey I want to start something.” Might be that they want to add to what they already have. Would you consider your team to be financial advisors in the sense of helping them? Are they ready?

 

02:34 GF: Yeah, that’s exactly what our position is. We want to be good trusted advisors to our business members. Offering the right solutions at the right times and just being a good partner with them as they continue to grow. And also actually the type of businesses that we’re really interested in is those that are growing because we want to be able to grow with them. And that’s part of our mantra.

 

02:57 LJJ: So tell me a little bit about what happens when a business, they think they’re ready or there’s mistakes, either common mistakes that businesses seem to have, or do, or is that… On the personal side, we always say, “Oh geez we just spent too much money on X this month.” Similar?

 

03:15 GF: One of the things that we’ll see from time to time is that sometimes concerning is they’ll take out too much cash, and sometimes as for tax purposes and then that makes it challenging for us to underwrite. So there’s almost a two-prong approach, if you work with your accountant, he’s trying to save it dollars in taxes but yet you also need to borrow money. It’s a balancing act, do I leave it in? Do I take it out? For us I’d rather see people… I’m not saying you shouldn’t take it out, but reinvest in your business because that’s going to serve you well in the long-run and help you be successful as times change.

 

03:53 LJJ: When you talk about strategy and transparency in business, do you see that there may be the idea but not the background, not the guts that has to go with an application?

 

04:11 GF: Yes.

 

04:11 LJJ: Did you see that?

 

[laughter]

 

04:15 LJJ: That’s okay.

 

04:17 GF: A lot of times we see applications. I think sometimes people are reluctant to disclose everything. I’m not sure why. It’s just like…

 

04:27 LJJ: In the long-run it has to come out, right?

 

04:29 GF: Yeah, and so it’s just a back and forth. And we always look at… These are financial tools, we need these to make a sound educated decision. Just like if you went to see your physician, they asked all these questions and people are very open and provide this, and if you don’t tell them everything they can’t make the right diagnosis. And it’s very similar in ours, and the more you disclose sometimes the better the pricing can be on your deals and it helps.

 

04:57 LJJ: You know what’s interesting, truly, is if you look at a budget, if you say on a personal note, people don’t like to talk about money. It’s a personal affront if you’re talking about money in the sense of… And yet it’s the number one stress. And so if it’s your business that’s going to be a double whammy in some respects.

 

05:17 GF: Yeah, it’s a double stressor. And for business owners, for them it also means that’s their livelihood that affects their personal wherewithal and everything. One of the things obviously is a business owner… They obviously got into business for a reason, because they had a passion for something, they love doing what they do and they do a remarkable job with that. Where it goes little sideways is they don’t really understand a lot of times their finances. Do you really understand the balance sheet, the income statement, your cash flows? A lot of times they don’t have time for that.

 

05:49 LJJ: Because they’re running their business.

 

05:50 GF: Because they’re running their business and they’re off to the next widget that they’re trying to make. We look at it, that’s important to focus in on that, that’s your scorecard. That’s your measurement to know, “Am I doing better? Am I getting where I need to be? Is my pricing right to be successful?” Just like you do your own budget. You want excess at the end of the month, right? So if I’m running a business, I want to make sure I have enough net profit at the end of the month to go on to the next month and so on and so forth.

 

06:22 LJJ: When is it that the growth starts to happen where you’re saying, “Now it might be a time for a loan. Now it might be time to put on the books another employee.” That’s to me what you’re talking about, is where is the timing and how important it is to understand what’s looming out at the same time as you’re running your business.

 

06:48 GF: Yeah, I think a lot of times business owners are reluctant to add additional staff. And sometimes maybe you don’t have to do that and maybe it’s outsourcing some of that to other people that have that expertise, that can lighten the load for your business. You want to be able to continue to do well. I always remembered earlier in my career, we had a bakery and it was just… Guys started out in a very small kitchen, and he made a super product and it was awesome. And he was an artist on the side as well, because he could decorate them and everything, but as he grew… And that’s an example of growing so rapidly and trying to hit so many markets that he outstripped his expertise, and he didn’t really bring in any additional expertise to help him get to that next level. And you have to be able to recognize your limitations and how do I expand on that and how do I bring in the expertise? I just kind of remembered good successful people, obviously you surround yourself with, in my opinion, people that are smarter than you. I’m not the smartest guy on the block. So, hey, if you’re smart that’s great, because that’s going to help me.

 

07:57 LJJ: Right. You know what’s interesting? I just read an article about, from the New York Times, I believe it was. And it was about a food critic who wrote a list of the top number one place to have a hamburger. And you think to yourself, “Okay, that’s cool. I want to be on that list.” You fast forward 10 years later, and the individual had one little location, and became so busy that they could not provide the great food that everybody was used to.

 

08:27 GF: Right.

 

08:27 LJJ: And literally they just stopped business for a while, because they couldn’t do it. So be careful what you wish for, you know?

 

08:33 GF: Absolutely, and bigger isn’t better.

 

08:35 LJJ: Bigger sometimes isn’t better. You’re working with a credit union in communities, and you do talk about that. The mom and pop, the community support. Tell us a little bit about why and how thrilling it is. You talk about driving around and seeing those locations, but it truly is, makes the communities, those small businesses.

 

08:56 GF: Yeah, absolutely. And a lot of times those business are very content to just operate every day within those communities or out of that location or retail establishments. And a lot of times it’s very community oriented, because they get the same people that probably may come in day after day, and it creates a friendship, relationships, and you know everybody in your community. It just makes it very enjoyable and fun.

 

09:20 LJJ: When you see stories now, technology in business, are you watching and kind of looking at businesses today that may not invest in technology and you can help them understand why it’s going to be so critical in the future?

 

09:35 GF: Yeah, that’s a huge hurdle, I think, out there. Some invest more than others. I think it’s a clearer channel for the consumer, because it happens in so many different facets. I see business a little bit slower in transitioning to that. Just because they still like that personal touch. That one-on-one, whether it’s with your banker or your accountant or your attorney, if you will. It’s a little bit more relationship oriented. I hear and see people doing everything by texting and social media and everything, and they may never even put their eyes on that individual. So, it’s a different world. It’s changing very rapidly, but it’s also we’ve got to be able to change and adapt to that.

 

10:20 LJJ: And talk to each other face-to-face.

 

10:22 GF: Absolutely.

 

10:23 LJJ: Like we’re doing right now.

 

10:25 GF: Exactly.

 

10:25 LJJ: Which is very nice. I think the same is true, though, for business banking. The tools that a business expects are a little bit different than a personal bank account.

 

10:37 GF: Mm-hmm.

 

10:38 LJJ: How important is it that we stay up-to-date?

 

10:40 GF: It’s very important. There’s some tools out there that we’re looking to build into our arsenal, if you will, in 2019 and beyond. Because there’s businesses that are already utilizing these. So it’s important for us to get up to speed, so we can continue to offer the services and support that they need to run their business very efficiently. And as we looked at our own business model, we’re trying all the time to gain efficiencies in that. And that’s what I kind of look at business, how are you trying to gain efficiencies out there? We just saw that GM’s laying off all these workers and everything, but in the same breath manufacturing production is the highest in the country that it has ever been. So you kind of look back and say, “Well, how can that be? All these people are being pushed out of jobs.” Absolutely right, but because of technology and robots and all this, we’re producing more efficiently and without, unfortunately, labor in that, but that’s how it’s being done. And I kind of think back to probably when I was in high school, and that was a concern that was projected back then, that robots were going to take over everybody’s job and everything. “Ah, no they’re not, they’re not.” And it’s like you fast forward and you’re going, “Holy crap. That for prediction was right.”

 

[laughter]

 

11:58 LJJ: Well, yeah. And it’s interesting because now they’re saying it’s just different jobs.

 

12:02 GF: Right.

 

12:03 LJJ: There’s just different jobs and different tools. And again, it’s back to I think what you said. Hit the nail on the head. Who’s surrounding you to help you grow is important.

 

12:15 GF: Right.

 

12:15 LJJ: Well, Gary, fascinating conversation. We’ll have you back. Thank you so much. This is Money I’m Home, from finance to fitness.

 

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