An industrial loan company (ILC) is one that’s not regulated by a federal bank. The majority of which are chartered by the state of Utah. They can be owned by companies and because they don’t face scrutiny via the Federal Reserve or laws that regulate banks, they’re becoming popular amongst financial tech and investment companies. However, to thrive and be successful is more than lending money, it involves having a strategy to remain a market leader. This article looks at solutions every ILC should consider using to keep thriving.
Scrutinizing Your Business Plan
What are the core elements of your business plan? Are you on track to achieving them? If so, when? If not, why not and what are you going to do to remedy this?
You need to be confident that your business plan is viable for your ILC to grow. You need to know your business plan inside out to ensure all the elements within it can indeed prosper and make your ILC a profitable venture.
It’s when you meet the initial objectives of your business plan that you can keep progressing. Additionally, if your objectives change, that’s no bad thing. It shows your adaptability and willingness to alter the course of your ILC to keep it operating.
Know Your Competition and Keep One Step Ahead
Even though you will have a clear idea of the direction of your ILC, you would be foolish to not pay attention to your competition, whether it comes from companies considering opening an ILC, established ILCs, or even banks.
You need to be aware of all of this, plus market forces and world events. You have to pay attention to what’s going on everywhere as it can have a potential knock-on effect on your ILC.
It’s from doing this, that you’ll be able to plan ahead and remain a force to be reckoned with. Yes, you may have ideas, but these ideas will be of no use if you’re not aware if other ILCs have tried it before, succeeded or failed in doing so, and have now moved on. By knowing this, you can avoid the same pitfalls and even do what your competitor is doing, but better.
Hiring the Right People
You can’t do everything by yourself and for a company as big as what your ILC will become, you’ll need experts in different areas to do what they know best. This allows you to focus on running the ILC.
You cannot do this and be a marketing manager, financial manager, human resource manager, IT manager – the list goes on, and we haven’t even started on the teams they’ll need to help them!
Despite not being everything in every department, as owner, you should have a rough idea of what each department does and be able to perform the typical daily duties. This is for several reasons: one, you’ll understand what each person does; and two, you’ll know when something isn’t right and needs investigating.
It’s not always about the highest qualifications, nor is it always about achievements. You want a team that you can get along with and trust to do things in the best interests of your ILC.
Selecting your team is as much about planning for the future as it is about finding the best person for each position. They’re the infrastructure of your ILC and quite rightly need to be experts in their respective fields. You have to think strategically. For instance, the person before you may play a part in steering your company in the right direction, but is that enough for your future plans to drive forward your ILC?
Capital and Reserves
You would already have proven you have sufficient funds when you were applying to open as an ILC, this could have been via investors or even yourself with the appropriate permission. As an ILC it makes sense that you have enough capital to use in your day-to-day business.
This includes working capital, as you and your staff need money to pay rent and bills, go shopping, and travel to and from work. It should also include reserve money for when the unexpected occurs.
The recent pandemic should be reason enough to know that you need to be prepared for the worst-case scenario because when all else fails and your competition has collapsed, your ILC will still be standing. Your customers will not only thank you, but you’ll hopefully end up with the customers from ILCs that were once your competitors.
You’ll also want some of that money to work for you, preferably giving you a high return. A good finance manager will be able to help you with this, as well as long-term and short-term forecasting. This is a vital part of your ILC’s future, so make sure you listen to your financial manager.
Operating an ILC is as challenging as it is applying to be one. However, it’s not impossible. It requires a knowledge of what’s required and being on top of your game. It’s about constant planning in a dynamic industry to remain ahead and become the ILC of choice. You can’t go blindly into this sector and envisage immediate success.
You need to have a strategy, and you need to have people that understand it and are committed to working to reach it. Some of the strategic solutions in this article should help you along your way.
