A man channeling Wild Bill Hickok charged into the bank as if he was chasing a party of renegade Apaches. He marched past the receptionist, by two other loan officers and sat down in the chair in front of my desk without being asked.

He had long gray hair tied back in a ponytail, a mustache and a little goatee that came to a point below his chin.

“Wanna’ get a loan,” he said and slid a brochure across the desk in my direction.

 He wore a suede jacket with fringed leather dangling from the sleeves and granny glasses like John Lennon used to wear.

 I picked up the brochure and opened it to the first page. It was one of those cattle deals that were the darlings of the investment world in the eighties.

 They were disguised as investments in cattle ranching, but in reality were created for the tax credits that sprang from a loophole in the IRS code. CPAs and tax attorneys were cranking these things out by the truckload and taking a tasty piece of the action as the General Partners.

 I’d read dozens of them. Some made financial sense; most did not.

 “How much you want to invest?” I asked.

 “Fifty thousand,” he said and spun a business card through the air as if he were dealing poker at Caesar’s Palace. It landed on the business plan.

 “And how much of a tax credit are you going to get, Mister…” I picked up the card and read his name; “Blasedell?”

 “Thirty grand.”

 I looked up at him waiting for him to address the disparity.

 He looked back.

 My desk phone rang. I let my secretary pick it up.

 “Seems like you’re going to come out on the short end of this deal,” I said.

 “How do you figure?” He said.

 I glanced across the lobby of the bank. It was a Friday afternoon and the line of customers waiting to see a teller was backed up all the way to the front door.

 I looked back at Blasedell. “Well, if you invest fifty-thousand and are only going to get a thirty-thousand dollar tax credit, you’re twenty-thousand upside down on the deal.”

 Wild Bill sprang forward in his chair like a horizontal jack-in-the-box. “It’s not my fifty-thousand Mister Bank Vice President, it’s yours.” He sat back in the chair with a devilish grin and patted his goatee with the index finger of his right hand.

I wasn’t sure if he was really missing this many brain cells, or was pulling my leg. “That’s true,” I said. “But you have to pay the loan back.”

 He shot forward again. “You banker guys are supposed to be smarter than this.”

 “Smarter than what, Mr. Blasedell?”

 “Sebastian,” he said. “My friends call me SB.”

 I nodded.

 He sat back.

“Let’s say, my credit is A plus. And let’s say I’m willing to move a couple hundred thousand in deposits into your bank here. And let’s say you approve my loan.”

 “Go on,” I said. The deposit balances had my interest.

 “If it’s a line of credit, I would only have to make monthly interest payments, right?”

 I nodded.

 “Payments of around $300 a month, right?”

 I ran a quick interest rate calculation in my head and nodded.

 “Twelve payments of $300 is $3,600, but I would get a tax write off this year of $30,000!”

 He couldn’t contain his smile and now tapped his goatee rapidly with his index finger as if it were coming unglued and he was making sure it stuck to his chin.

 “But at the end of the twelve months the fifty-thousand would come due,” I said.

 Then the penny dropped.

 “Yes, but that’s next year and by then they will have sold the cattle and I’ll have the fifty-thousand to repay the loan.”

 The actual business side of these cattle tax shelters were notoriously shabby.  Few of them returned anything to the investor but the tax credit, which was usually much larger than what Wild Bill was getting. Beyond that, the key question was the track record and viability of the General Partners – would they actually buy the cattle, then sell them and return funds to the investors. Some might. Many would not.

 “Have you researched the track record of the General Partners?” I said. “Or how many of these cattle deals have they done that have paid off?”

“Got it from my brother-in-law. Friend of his is a CPA.”

“Tell you what, Mister Blasedell, you do some homework on the people that put this shelter together. See if they have put other deals like this together, and if so, how well they paid out. And then do a little homework on these kinds of shelters in general. And if you still want the loan, come back and see me.”

 The tapping of the goatee stopped. “You don’t trust me?” He said.

 “I don’t know you, Mister Blasedell. But the last article I read on cattle-based tax shelters said that 76.2% of them did not generate any cash flow other than the tax credit itself.”

 The goatee again. Tap, tap, tap. “Seventy-six percent,” he said.

 “And two-tenth,” I said.

He stood and took the brochure off of my desk. “Much obliged,” he said, and walked out of the bank with a little less bounce in his step than when he’d come in, but twenty thousand to the upside no matter how you sliced it.

I confess to a little literary license in the dialogue, but not the perspective of the customer. As a banker in the San Francisco Bay Area and later in Beverly Hills, I reviewed countless loan requests; for everything from a family trip to Antarctica, to an investment in a new Indy car.  But several were from customers who had an idea for a new business or a new product or service and wanted to borrow start-up capital.

It is a testament to the imagination of the human mind that people can dream up the some of the most creative solutions to market opportunities. Some dazzling in their brilliance, others… eh, not so much.

 But a common mis-step in such requests was a lack initial market research. How big is the market? Who are the competitors? Is there a 900 pound gorilla in the field? If so, who is it? Why are they the leader?

 How does market leader promote their brand? What “buttons” do they push in their advertising? Do they have a market position and if so, do they utilize it in their marketing? What PR do they do? And, after this kind of research, is there an element of this market you can grab? What is it?

Key…what makes your product different – really different, unique. And what words and phrases should be used to communicate these benefits to the prospective public?

This kind of research is a key initial step in the research work we do at On Target in addition to surveys. Without it, the client is marketing blind – they may be saying the same thing as the competition, without mentioning anything that distinguishes them.

 They may be trying to take a position that is already taken, which results in wasted advertising dollars.

If Wild Bill, had come into my office when I was a banker with some solid market research, (and his credit checked out), I might well have made that loan (and gotten the $200,000 deposit)

We have conducted research for clients that they took to potential investors and helped secure investments.

“It has been a few months since you performed the market research work for us, so I write this with a very good appreciation of the benefits of the work. In launching our new company, I considered one of the most important things we would do is brand and position the company. Your work to help us get into the minds of our customers and prospects really pinpointed – with precision – what our brand should represent. And the rest fell in place from there. “

MD EVP

Even before surveys are done, we can conduct extensive market research that will help guide your forward progress.

Call for a quote.

Best,

Bruce

Bruce Wiseman

President & CEO

On Target Research

www.ontargetresearch.com

Br***@**********an.net

1-818-397-1401