The growing interest by credit unions in expanding into small business services was evident
The opportunity is apparent, but the risks demand attention, according to Steve Abercrombie, president of Business
* Failure to plan properly before start-up.
* Failure to monitor financial position.
* Failure to understand the relationship between price, volume and costs.
* Failure to manage cash flow.
* Failure to manage growth.
* Failure to borrow properly.
* Failure to plan for transition.
That credit unions are seeing increased demands for small business services are no surprise, Abercrombie suggested.
"There are a lot of people coming back into the free enterprise system and they need help and they need services,"
Their immediate needs include trusting the party they are dealing with (local credit unions have the advantage),
Typically creative, action-oriented, impatient and fast moving types, they also need people they can connect with,
That said, these new entrepreneurs also have various management styles that will vary from professional and
Among the borrower variables to consider, he said:
* Experience in their industry and general business.
* Reputation in the community and in the business world.
* Knowledge of their industry, impact of technology and competitive factors.
* Financial background: Do they use professional advisors, an accountant, an attorney, and insurance agent?
"All of these things are critical to deciding whether to serve them," he said.
Also important, Abercrombie said, is know the form of business the member is creating, such as proprietorship,
"Hopefully, they have used solid professional advice to choose the form of business structure," he said. "Learning