Targets represent the demographically chosen “raw material” you will market to and you have two (2) types of targets you will constantly be adding to your lists and CRM…

1. Targets for Financial Products:  These targets are business owners demographically chosen as possibly in need of financing now or in the immediate future.
2. Targets for Referral Cultivation:  These targets are professionals in industries such as banking, accounting, insurance, etc. who, in the course of their daily business, interact with business owners that could be members of the aforementioned group of those in need of finance.

Selecting Targets for List Building

One of the truly great characteristics of the factoring and alternative business finance markets in general is the ease with which you can build compiled lists of targets to work on and market to.  According to the SBA, there are roughly 29 million small businesses in the U.S. with new businesses being started every day.  Some businesses…

• can qualify for bank financing and others cannot
• need financing immediately, others do not

As we stated in the Factoring 101 Broker’s Guide, you cannot sell factoring to a company that does not need money and even if it did need money, has abundant collateral and could easily get the needed funds from a bank.  Understanding this fact would (or should) eliminate such companies from being members of  your compiled target lists.

What Types of Businesses Make the Best Targets for Your Business as a Factoring Consultant?

Basically, any business operating on a B2B basis (even those not currently invoicing), is a candidate for factoring.  Some business types, however, are better than others.  So what types of businesses will make the best additions to your compiled lists for marketing factoring?

• Small B2B operators who do not offer payment terms and demand cash from customers on the spot.  They could be doing much more business if they granted 30 day payment terms and employed a factor to finance those invoices and they need to understand how that works.
•  Businesses that have a significant number of employees make good candidates for factoring. Lack of working capital for payroll is the #1 reason small business owners employ factoring.
• Service sector companies which have little or no hard collateral that could be used to secure a bank loan make good candidates for factoring.
• New, fast growing companies with little or no credit history make good candidates for factoring.
• Manufacturers and distributors new to exporting make great candidates for factoring