How Financial Brands can Build Relationships with Local Businesses in a Digital World

“We have less than a week to catch up with money we lost during the pandemic. We applied for help through various means to no avail. Come have lunch and tell a friend.” - Facebook post from a local burger joint in Richmond, Tx. (August 2020)

Over the past few months, like many of you, similar posts have surfaced on my newsfeed pleading for community support in order to keep the doors open for small businesses. Local restaurants and mom-and-pop shops are drowning with the health-crisis and struggling to stay afloat. Surviving as a small business is challenging, and that’s without facing a worldwide pandemic. 

Now more than ever, small businesses are relying on financial brands to lend a helping hand. 

James Robert Lay sat down recently with Seth Siegal-Gardner, chef and owner of Para Llevar in Marfa, Texas, on his latest Banking on Digital Growth Podcast. Seth shared his unique perspective and provided insights into the hearts and minds of small business owners so that financial brands have an opportunity to step up and help those in need most. 

With the fumbles made by some of the big nationals like Chase, Wells Fargo and Bank of America regarding the Paycheck Protection Program (PPP) application process, this is a time for community financial brands to step up and guide small businesses as we move forward. 

In fact, Ron Shevlin noted in a recent article on Forbes that more than six in 10 small businesses that currently bank with a mega bank, like Bank of America or Chase, said they were somewhat or very likely to look for a new banking relationship in the next year. 

And that was before PPP. 

There is no greater time than now for community financial brands to turn the tide of the small business lending and deposit decline.

Adapt and Pivot

Even as a globally successful chef, Seth admits that he has had to adapt his dream, and like many of his peers in the food industry, he has had to pivot his business model.

“Everybody loves their restaurants and loves their neighborhood spots. They're watching the restaurants turn into to-go restaurants. So that's the obvious pivot that everyone is making now, now everyone is a to-go restaurant. And I think that’s a necessary evil for a lot of restaurant people...when we had our full-service restaurant in Houston, we hated the idea of doing to-go food, but it was just part of the business and you had to do it. Now it's essentially one of the only parts of the business.” 

While restaurants are scrambling to create or optimize their to-go models, other organizations are pushing towards a digital model or moving quickly to get their online stores running.

When creating the model for Para Llevar, Seth had always intended on having online ordering as a feature. But like we have said before, COVID-19 has accelerated the plans that were already ensuing. 

The pitfall here is that rather than following through with carefully laid plans, organizations are rushing to get new models or features up and running. 

But digital growth does not and cannot happen overnight.

Digital growth is a journey. 

Financial Institutions: It’s Time to Step Up for Local Business

There is an undeniable opportunity here for banks and credit unions to step up and help the local businesses. Restaurants are following laws and regulations that require masks, gloves, and other safety measures. However, the safety protocols are not exactly the issue.

The question is: who is paying for the extra equipment? 

With the possibility of stricter regulations, Seth questions just how long many restaurants, his included, can operate with the new expenses. 

A recent report from Datassential, concludes that 92 percent of restaurant traffic is now off-premise. There is unexpected inventory needed to fulfill the increase of call-ahead, take-out, and delivery orders that restaurants are facing. Plastic utensils, straws, napkins, and containers are resulting in an overhead expense that many restaurants are having a hard time keeping up with. 

As Seth has partnered with many local businesses to support each other, there is also room for local financial institutions to step in. There is an opportunity, for example, to build a community page to promote the local businesses in a more direct manner. 

Beyond giving access to loans.

Financial brands can partner with local businesses to co-create content, possibly create a Facebook Live featuring a local restaurant or bar discussing at-home cocktails or recipes, while promoting their business. Financial institutions could run a campaign where consumers are entered into a drawing to win a personal, virtual private chef class for their family. Maybe the Facebook Live collaboration helps benefit a local hospital. Maybe every time your bank’s debit card is swiped at a local restaurant, X amount is donated to a local hospital or charity affected by COVID-19. 

If we are truly all in this together, as James Robert reminds us, let’s put our money where our mouth is.

It is no secret that local businesses took an immediate hit due to COVID-19. But the depth of the domino effect, especially in regards to the hospitality companies, paint a much bleaker picture. Seth points out how the farmers, the delivery drivers, the waiters, and bartenders, almost immediately lost their jobs instantly. 

“There was no holding onto them for a couple of weeks to see what happened. It was no money in, no money out. And you know, most people don't know restaurants are on a 15 to 30-day net. So everyone's bills are coming due right about the same time. So you've got a lot of suppliers that are asking for those $15,000 - $25,000 checks to cover all your dry goods for the past month.”

It’s time to pull together.

It’s time to collaborate.

It’s time to work together to solve the real problems your community is facing in a digital-first world. 

There is an opportunity for financial brands and for small businesses to adapt and pivot and not get stuck in that old thinking because the world's never going to be the same again.

“For better or worse, we're in a virtual world right now,” Seth proclaims,” And we need to have like a virtual neighborhood too, for all of our close friends.”

Bonus: Listen to the Humanity of Digital Growth