Mastermind Groups: A Lender’s Secret Weapon

Despite their best efforts, small and medium-size companies often struggle for survival. A small business “mastermind group” brings together lenders, CPAs, entrepreneurs and executives from a variety of industries and companies in a supportive environment. The goal of the group is to openly share information and best practices in order to promote accountability and business growth.

Establishing and hosting a small business mastermind group allows a lender to deepen relationships with business owners while simultaneously gathering data to inform future lending decisions.

What are they?

Introduced by author Napoleon Hill in 1925, a mastermind group is made up of small business professionals who meet to provide input and seek advice from peers. These collaborative groups provide a supportive, collegial environment designed to generate new ideas and solutions that will help participants improve personal and business performance.

Group size varies from five to 12 participants. Some groups designate one individual to act as the facilitator, while others rotate that role. Mastermind groups work best for those with a drive to improve business performance and who are willing to listen and share insights.

How do they work?

Start your group by inviting existing and prospective customers who are at similar stages of business development. Also, if you want to encourage uninhibited communication, don’t invite competitors. Here are other tips for creating a successful group:

Provide a welcome pack. In the first meeting, provide participants with some promotional items. Depending on your budget, include high-quality office supplies, such as a leather portfolio branded with your bank’s logo, a notebook, a pen and a highlighter.

Pick a location. Hold the first meeting at your bank. Then, ask the group for suggestions for future meeting sites. If the meeting is scheduled during lunch or dinnertime, cater a meal. To encourage active participation, pick a space within your building with limited foot traffic and proximity to bank employees.

Establish ground rules. Successful group discussion starts with simple ground rules. For example, limit speaking to one individual at a time and prohibit use of mobile phones. Encourage positive, nonjudgmental commentary that focuses on the idea rather than the individual.

Assume the role of facilitator. While the group may eventually choose to rotate the role of group facilitator, in the first meeting be prepared to assume that role. Establish an agenda that incorporates time for brief introductions and identify three or four topics to tackle in the first discussion. Encourage participants to share their backgrounds and what they hope to learn from the group. Ensure that everyone in the group contributes by asking and redirecting questions.

Use social media to connect the group. Consider using social media to help participants establish and solidify connections with other mastermind participants. Creating a private LinkedIn group, for example, can provide participants with a venue to engage with the group outside of regular meeting times. At least initially, assume the role of online facilitator by asking thought-provoking questions designed to elicit input from the group.

Document lessons learned. After a meeting ends, mastermind participants may struggle to remember critical points discussed. Assign a member of the group to take notes during each meeting, documenting the topics discussed and key discoveries. Distributing written notes after each meeting helps ensure accountability within the group.

Set up one-on-one meetings. To deepen your relationships and increase the use of your bank’s products and services, establish regular one-on-one meetings with each mastermind participant. In addition to requesting their feedback on the group, use the opportunity to improve your understanding of their businesses and position your bank to help with financing needs.

Establish metrics to track the ROI. Sustaining participation in a mastermind group depends on your ability to justify the time, effort and expense associated with the program. Before the first meeting, create a scorecard to capture key performance indicators associated with each participant’s relationship with your bank, including:

• Number of business and personal accounts,
• Loan products and balances,
• Account and loan-related fee income, and
• Collected account balances.

Monitor and report these metrics over time. Also track qualified referrals that come via mastermind members.

Why not try it?

While it sounds complex, a well-run mastermind group provides your bank with unprecedented access to how business owners think and run their companies. This could prove valuable in developing long-term, mutually beneficial banking relationships.

6 questions to help generate an active discussion

Not sure how to begin your mastermind group discussion? Here are some questions to consider asking participants at the beginning of a meeting to spark discussion and the sharing of information:

1. What was the biggest challenge you faced this week?
2. How would you rate your company’s performance in the last month?
3. What did your company do better this week than its competitors?
4. What did you learn in our last meeting that you applied to your business?
5. When was the last time you asked a customer for feedback on your business and its ability to solve their problems?
6. If you received a $500,000 inheritance tomorrow, would you spend the money on your business — and, if so, how?

For questions, please contact D. Alan Najjar at 404-874-6244 or fill out the contact form below.