No two banks will approach the microbusiness market in exactly the same way. Each has its own unique strengths, weaknesses, and business objectives. However, there are several universal tasks that every bank should accomplish in order to address the microbusiness segment:For all banks, regardless of strategy

• Make sure line staffers understand that microbusinesses are a profitable segment to be actively courted, not avoided. Typically, bankers roll their eyes and trot out horror stories about past “nightmares” with flaky microbusinesses. Staff must be educated to the facts: Microbusinesses can be risky, but with proper pricing and risk management, the segment provides an excellent source of incremental profits.
• Leverage the cachet of the “branch manager” in sales efforts to microbusinesses, a telephone call or visit with the local branch manager could be enough to land an entire microbusiness account; after the initial sale, the continued relationship could be fostered via email communications from the branch manager or a designated business banking officer.
• Use email to foster relationships, keep in touch, deliver information, and cross sell.
• Uncover microbusinesses within your own retail customer base by looking for random and fluctuating deposit activity.
• Develop a credit line package consisting of overdraft protection, home equity and business lines of credit (see Table 4).

• Develop a robust payment processing service that allows small businesses to accept email payments from checking accounts or credit cards
• Build transactive services that complement the small business’ current processes, e.g., downloading data in popular formats to import into accounting packages.
• Provide a universal interbank funds transfer mechanism.
• Provide tools to make annual financial updates simpler.
• Develop email and Web-based methods for enhancing the relationships between microbusiness clients and their banking officer contact.
• Develop Web areas that cater directly to the small business segments you are targeting:
  •  part-time businesses;
  •  self-employed (including full-time sales) or 1-person business;
  •  micro employers with fewer than 5 employees.
• Provide flexible financing vehicles that include an integrated line of credit and the ability to take out fixed loans when needed from the overall credit line (e.g., BofA Equity Maximizer).
• Offer flexible pricing. For those willing to keep significant non-interest balances, waive or reduce fees; for those desiring the maximum rate of return on their funds, develop fee-based package accounts.
• Boost email customer service so response times are similar to phone calls.
• Consider OneCore’s turnkey solution as the basis for your offering.

• Look to private banking for inspiration; the bank and its branch managers and/or business officers should treat microbusiness owners as VIPs.
• Develop financial “wrap” accounts that handle all the businesses financial needs for an annual fee, calculated as a percent of revenues under management; the wrap accounts could come in various levels depending on what functions the business wished to outsource. Users could also move up the scale over time.
  •  VirtualCFO: 1% of revenues, $2,500 minimum;
  •  VirtualCPA: 0.5% of revenues, $1,500 minimum;
  •  VirtualBookkeeper: 0.25% of revenues, $500 minimum.
• Provide access to other credit providers via a small business marketplace such as that facilitated by LiveCapital and PrimeStreet, prior to its bankruptcy (for a complete description of the pros and cons of PrimeStreet’s online application process, see the full report for details).