The Untapped Value of Honesty in Corporate Finance

I’ve noticed that honesty has taken on an increasingly prevalent role in new business models across a myriad of industries. This is not really a surprise as industry giants are generally not known for their integrity or moral fiber. Lack of honesty created a void that needed to be filled, even in finance. It’s not like people yearn for cold, hard truths. They just want sales reps and account managers to mean what they say when selling their products or services.

I can attest that honesty has been a major part of the success of my corporate finance company. As I progressed in my career, I began to realize that I was lucky to be in a field where it is actually possible to be 100% honest with potential clients. I believe that if more corporate finance companies took advantage of this advantage, more small businesses would be less hesitant to work with them.

Here are three reasons why honesty and this financial element go hand in hand:

1. Unforeseen crises are actually a reality

The goal of every salesperson is to convince potential customers that they really need (or will eventually need) their product or service. Many sellers try to achieve this by using scare tactics. They could predict what might happen to you (or your family) if you refuse them or paint a grim picture of the future where only those who made that critical investment are not left behind. In most cases, these scenarios are greatly exaggerated. Chances are the potential client will be fine if they say no.

However, in the field of business financing, salespeople often tell the truth when they express the need for their products. Any experienced business owner is well aware of the importance of additional financing. At some point, the average small business is going to hit a crisis. Demand changes, major suppliers go bankrupt, equipment breaks down, etc. It’s inevitable.

Most other types of sellers cannot apply this level of certainty to their words. That’s why I think sales reps in this space should stress the validity of their insights into the needs of small businesses. Yes you ignore this benefit, potential customers might think they’re talking to another stereotypical salesperson who carelessly resorts to the same scare tactics as everyone else.

2. You help people who really need money

Speaking of stereotypes, a common misconception about the finance industry is that its professionals only work with people who already have a lot of money. This may be the case for many companies, and I can imagine that at least some of these companies struggle to keep their employees motivated. I would probably have a hard time motivating myself if my clients weren’t exactly depending on my expertise to stay financially secure.

Business financing, on the other hand, is another story. Running a small business is incredibly expensive, even with a massive army of loyal customers. The costs of many standard business expenses have increased dramatically, and that does not include the various new expenses that come with adapting to a changing environment.

Motivation is less likely to be an issue when your team members don’t have to stretch the truth when thinking about how important they are to their customers. Few companies can legitimately say that they help their customers feed their families and achieve their dreams. Any corporate finance team should be honored to belong to such a small group.

3. You’re not upselling just to make a bigger profit

Entrepreneurs today often preach the power of upselling or simply focus more on existing customers than new ones. It’s much easier for companies that prioritize long-term partnerships as part of their business model.

Some of these companies, however, don’t favor long-term partnerships just because it’s more profitable. They do this because it’s the most effective way to prove their worth and drive growth for both parties. Many corporate finance companies have been built around this concept. They only succeed if their clients’ businesses achieve long-term growth, which typically requires multiple rounds of funding over several years.

So when these companies tell their potential customers that they’re here for the long haul and are ready to partner with them for their entire careers, they’re probably not saying that just to make more money. They say it because it’s simply what they do best. Companies that can back up this claim may want to remind potential customers that they don’t just tell them what they want to hear.

Honesty is a rare gift

The ability to be honest with your work is a skill indeed. It’s crucial to show potential customers that your business is not like the countless others who have tried to gain their trust with hollow sales pitches. Sometimes the biggest benefits take a little extra effort to implement.