When businesses look to raise finance it is often to support their growth. This is all good and commercial loans for positive reasons are always attractive to lenders.
Part of financing growth is about identifying where the money will be spent, which drives the question of ‘What Are You Selling?’.
So, What Are You Selling Really?
This came out of a conversation the other day. Think about these companies and what you think they sell;
- Wonderbra sell lingerie
- Aviva sell insurance
- Ford sell cars
Sounds fairly straightforward. If you are a marketeer then you will be seeing the hole in this version of events, so let’s take a look at what these companies are really selling;
- Wonderbra sell confidence
- Aviva sell peace of mind
- Ford sell independence and freedom of movement
Why It Matters
The insurance one is always interesting. Nobody really wants to buy insurance, but they do want the peace of mind that knowing your family will be looked after, or you could replace your home should something happen is what people really value.
The same applies to Wonderbra, what is being purchased is not the item itself but the confidence it gives in terms of your appearance.
When it comes to commercial finance, being able to explain what you sell is vital to securing growth finance. Most lenders will look at what you do and take it at face value, they often struggle to apply what you say you sell to their experience in the real world. In this respect being able to clearly show what you sell can be the difference between securing the funding you want or not.
Whenever businesses undertake any sort of risk analysis, such as SWOT, then understanding what you are selling becomes key to getting any benefit from the task. Bear in mind that lenders love things like SWOT and you start to see more benefits in understanding what you sell.
By Dave Farmer