Cash is to a business what helium is to a balloon. Without a steady supply, you cannot stay afloat — paying your suppliers, keeping your inventory stocked or growing your business. A merchant cash advance might be just what you need to get the capital that is so essential to your operations.
What Is a Merchant Cash Advance?
Many people mistakenly believe that getting a commercial loan from a bank is the only way they can acquire funds. That’s a fine mechanism for larger or more established enterprises or for those with stellar credit. But if you are short on collateral or have poor credit, there is another potential solution: a merchant cash advance.
In this financial product, the lender purchases a portion of your future credit card sales at a discount. You get a large lump sum of cash right after the agreement has been confirmed. In return, the merchant cash advance provider gets a portion of your monthly credit card sales — usually around 8 percent of your total transactions.
Who Doesn’t Qualify for a Merchant Cash Advance?
A merchant cash advance is not a good fit for all businesses. Typically, you will not qualify for this financial vehicle if you have a bankruptcy on file. You also need to have an established credit card payment processing system in place, and your business should have been in existence for at least one year, although there can be some exceptions to this rule.
Things You Don’t Have to Worry About
A merchant cash advance is a sales transaction, not a loan. For that reason, it does not appear on your credit report. In addition, because you do not need to put down collateral, you will not lose it should the worst happen and you default on the agreement.
Easy to Obtain
If you have ever applied for a commercial loan from a bank, you know the extent of the paperwork that is involved: bank statements, tax returns and comprehensive business plans. By contrast, obtaining a merchant cash advance only requires that you provide information about two things: your monthly credit card returns and the amount of time you have been in business. In general, you should have at least $5,000 in monthly credit sales and have been in business for a minimum of nine months.
In many cases, months can go by before a business owner learns if he or she has been approved for a commercial loan. By contrast, merchant cash advances only take a matter of days, usually a week or less, after which time you have immediate access to ready cash.
Response times can be even faster if you complete your application online. In some instances, you can get an answer in a matter of hours. If you are trying to jump at an opportunity or if you need to pay off debts quickly, a merchant cash advance is an option worth exploring.
Easy Approval Process
You might have poor credit, but is your business stable and are your sales regular? If so, you will be pleased by the way merchant cash advances are approved. They focus not on credit but on your company’s performance, generally over the past year.
Collections Based on Your Revenue
Unlike commercial loans that usually have fixed monthly payments, what you send to your merchant cash advance provider will fluctuate to some degree based on your sales during any given month. If your sales spike during the holidays, the provider also gets more; however, ebbs in profits during slow times of the year mean lower payments.
Risks of a Merchant Cash Advance
As with any product for sale on the open market, some merchant cash advance choices are better than others. This is particularly true for merchant cash advance providers because the industry is not strictly regulated. In order to obtain a reputable, transparent product, it is best to take heed of the old adage, “If it seems too good to be true, it probably is.” Vendors that boast 99 percent approval rates and “the lowest fee rates in the industry” deserve special scrutiny.
Finally, if the merchant cash provider does not have a website or a paid email account, this definitely raises a red flag as well as suspicions that the operation might be so fly-by-night that it does not even have a solid infrastructure in place. Much grief can be avoided by doing your homework and choosing a provider with a solid leadership team that has years of experience in the industry. When in doubt, don’t sign or click until you have consulted with someone you trust such as a mentor or an attorney.
Check with the Better Business Bureau and read both positive and negative testimonials from former and existing customers. Take a look at the company’s press room to learn how they have been portrayed by newspapers and other publications, and take advantage of social media to glean even more information. The more knowledge you have about potential providers, the more intelligent your final decision will be.
When you run a flourishing business, there are many strategies you can adopt to keep customers buying and cash flowing. Great service, innovative products and a payment processing system that automates inventory, customer loyalty and accounting functions are a great start. But when you need a larger infusion of funds in a hurry, a merchant cash advance can be just the vehicle that can bolster your already stable business and catapult you to the next level of success.
These days, accepting credit cards is a virtual necessity for any business, however small or large it may be. Dealing with a merchant account company comes with the territory. However, that doesn’t mean you shouldn’t regularly look over your statement to be sure you are keeping as much of your money in your pocket as possible.
When you first signed up with your payment processing company, you probably did your homework. You looked around for the vendor that best met your needs at the most competitive price. However, the best option a few years ago may no longer be what’s best for you today. That’s why it’s a good idea to periodically put your ear to the ground and get a sense of what has changed in the payment processing industry. That way, you can be in a great negotiating position when it comes time to renew your account.
Here are some helpful questions to ask any prospective payment processor you are courting:
- Including fees, what is the total rate I will be paying?
- What, if any, fees are involved with cancellation, applying and monthly service?
- Can any of these fees be waived?
- Do I need to sign a contract or can this be a pay-as-you-go or monthly arrangement?
With this information in hand, take another look at your current payment processing provider. If they continue to be competitive, no changes are necessary. However, you should seriously consider jumping ship at the first opportunity and finding a new provider if your current company isn’t keeping up with the times.
Review Your Present Contract
It’s not the most exciting reading on the planet, but going over your agreement with your merchant account provider can be enlightening. What’s more, it could save you money by showing you areas that need to be tweaked. If you are paying more than you think you should or if there are redundancies, talk to your company’s customer service representative about making modifications. You may even be able to consolidate your monthly charges into a lower fee.
Pay Attention to Monthly Statements
Once every 30 days, you receive a statement from your merchant account provider. It details what you regularly pay, as well as goes through every credit card transaction that took place in your retail establishment or online through your e-commerce site.
Taking the time to review these statements each month can seem like extra work, but someday it might pay off. After all, checking the statement enables you to catch any errors the company may have inadvertently made. In addition, it can give you a snapshot of what you are selling as well as the payments you are making to your processing company.
Adopt New Technologies
There are three innovations in recent years that could change the entire complexion of your bottom line, putting more money in your pocket every day. First, if you don’t already accept mobile transactions, you should seriously consider enhancing your business by adding this payment option. Point-of-sale equipment that is provided through your payment processing company probably already has the capability to work with customers’ smartphones. All you need to do is obtain the necessary contactless readers from your merchant company. With each passing year, an increasing number of buyers are using their digital wallet-enabled smartphones to make contactless payments. If you don’t have the technology to make these transactions possible, you could be losing out on a significant amount of business.
The second payment trend you cannot afford to ignore is upgrading your point-of-sale system to accept EMV or “chip” cards. Over two years have passed since U.S. financial institutions rolled out this more secure form of payment. Even so, many small businesses have failed to upgrade their systems. Owners often fear that the cost of updating their equipment would be too high. Combined with the hassle of training themselves and their staff, the idea of accepting chip cards just seems unfeasible. The reality, however, is quite different. The new EMV equipment is not prohibitively expensive. What’s more, merchants who fail to adopt it are now held financially liable if a fraudulent credit card transaction occurs at their retail location.
As e-commerce gains in popularity every year, you simply can no longer ignore it. Thanks to its convenience and the ability it gives customers to easily find the best deals, online shopping is rapidly overtaking brick-and-mortar retail establishments. If your merchant account provider does not have the capability to enhance your business with a payment gateway, think about finding a more forward-looking vendor. Operating an online store isn’t for everyone, but if you see it in your near future, be sure your merchant account provider has the flexibility to help you set it up.
Customers want their payment experience to be as fast, easy and secure as possible. These innovations make that happen and help ensure your customers keep coming back.
When you run a small business, every penny counts. Taking the time to review your current merchant account might not bring millions of dollars into your coffers. However, it could lead you on the road toward smart, forward-looking decisions that can help your company gain stability and grow over time.
During the holiday season, you’re likely to create and send more invoices than any other time of year. You rely on the cash from these orders to carry your business into the new year, and you want to be sure payments arrive on time. Follow these eight invoicing best practices to keep billing flowing smoothly throughout the holidays.
Stop Using Paper Invoices
Paper piles up fast during the holidays for you and your customers. Printed invoices can get set aside, buried, or lost in the shuffle, leaving you to follow up or take a potentially serious loss when payments don’t come through.
Switching to a digital invoicing system delivers payment details to customers’ inboxes, making it much harder for the information to disappear. Digital options can be linked to the systems you already use to manage payments and inventory and can also be configured to automatically generate, send and collect payment on invoices. You can also set reminders to be sent at regular intervals so that clients don’t forget to pay as their schedules get busier.
Make Your Invoices as Simple as Possible
Invoices containing too much or too little information about orders can confuse customers and make them hesitant to pay. You either wind up dealing with late payments or have to field phone calls to clarify the information. Avoid both by itemizing products and services and clearly stating all costs. Use a logical and organized format in which it’s easy for customers to see exactly what they’re paying for, including associated taxes and fees. Include short descriptions if necessary, but avoid crowding the invoice with excessive text.
Allow People to Pay Using a Range of Different Methods
Providing diverse payment options gives customers the choice of paying in whatever way is most convenient. Credit cards and debit cards are popular options for quick payments, so make sure your business accepts all major card types. Many people also appreciate the ease of digital payment gateways like PayPal. However, even in today’s technology-driven society, the options should include a few “old school” methods like checks and phone payments.
When customers have multiple choices in the ways they can pay, they don’t have to delay making good on an invoice. Payments can even be made on the go through PayPal and other digital platforms.
Create Invoicing Policy Agreements
If clients don’t know when you expect payment on an invoice, you can’t reasonably expect to receive money on time. Every invoice should clearly state the terms of payment and the latest date at which you’ll accept cash before applying penalties.
Your invoicing policy should also include information about fees for late payment or incentives for paying early. Offering an incentive increases the likelihood of getting your money on time or even ahead of schedule. Late fees discourage clients from waiting until the last minute to send payments.
Consider an Integrated POS System
Point-of-sale (POS) systems upgrade your invoicing and payment process by providing one central platform for handling transactions. The newest options integrate directly with popular accounting and invoicing software, such as Xero and Quickbooks, to send order information in real time. When the POS system processes an order, an invoice is created immediately. Inventory is updated, and your records instantly reflect new information about a customer’s sales history and accounts receivable.
Given how crazy the holiday season can be, it makes sense to switch to an integrated solution for sales and invoicing. You’ll spend less time creating invoices, have an easy way to keep track of payments and minimize errors in data transfer.
Use Invoice Reference Numbers
Once the holiday rush is over, how can you be sure you received every payment for which an invoice was sent? How will you be able to pinpoint which customers need reminders and follow up on these specific orders? Establish a numbering system for your invoices, and keep track of these numbers in your files for future reference.
Numbered invoices are easy to file, easy to find and easy to refer back to. Clients can quickly pull up their orders when given the number, making the resolution of late or unpaid invoices much faster. Using a number system also simplifies the paperwork for you and your clients come tax time.
Always Send Your Invoices on Time
If you want invoices to be paid before the terms are up, you need to set a good example for your customers. Waiting to send an invoice says you don’t care much about punctuality and aren’t in any hurry to receive your cash. It also gives customers time to get distracted by the holiday rush, and they may already have forgotten about the order by the time the invoice arrives. If too many invoices pile up on your end, you could be the one who forgets to ask for payment and wind up losing important revenue. Deliver all invoices promptly to prevent these problems.
Use Your Invoices for Brand Promotion
Invoices should be considered a form of communication between you and your customers in the same way as emails, direct mailings and online content. Take the opportunity to increase the visibility of your brand by including a logo and tagline along with your contact information. You can even add information about relevant promotions if the details don’t overwhelm the invoice. Emphasize your brand in the colors and layout of the invoice, keeping in mind every one of your communications is a chance to cultivate a deeper connection with clients.
The 2017 holiday season is expected to show a 15.8 percent boost in commerce with a total expected value of $1 trillion in sales. With the average person contributing over $935 to this incredible number, it’s crucial for your business to keep track of invoices and collect payments without delay. Stick to your invoicing strategy and continue to maintain positive customer relationships to avoid problems with receivables during the lucrative November to January sales period.
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As a consumer, chances are quite good that you make at least some of your purchases using a credit card simply because of the ease and convenience. Now put on your entrepreneur hat and ask yourself why you don’t accept plastic at your own small business. If you still need convincing, following are seven reasons to accept credit cards:
1. Everyone Else Is Doing It – Today, it’s hard to find businesses that don’t accept credit cards as a payment option. Because of this, many people don’t carry significant amounts of cash anymore. If they enter your shop and pick out some products only to find that you don’t have a card reader and accept plastic, it’s quite likely that your customer will leave without making the purchase. Can you really afford that?
2. Collecting Payments Is Easier and Faster – No one likes it when they are owed money; for a small business, these types of debts can become a heavy financial burden. When the time comes that you run into a customer who owes you money, having the ability to accept credit cards gives them a quick and easy way to pay, thus increasing your chances of recovering the money you deserve.
3. You Can Keep Track of Payments – When customers make purchases using plastic, an electronic record is automatically kept. With just a few clicks, you can easily retrieve it in an hour, a day or next tax season. Bookkeeping just got a whole lot easier.
4. Online Shopping Is Made Possible – An estimated 90 percent of online purchases are made using credit cards. If you have any plans to start or expand your internet presence, accepting cards is a virtual necessity.
5. You Get Payment Immediately – One of the most frustrating parts of owning a small business is invoices. It can often take months before you receive the money you are owed, often creating major cash flow problems. Once you accept plastic, your customers can submit their payments without going through the hassle of writing and mailing a check. In the end, you will get what you are owed more quickly, and your customers won’t need to go through a multi-step process to make it happen.
6. Customers Spend More and Buy Impulsively – Cash is finite and is limited to what someone has in their wallet right then. By contrast, many customers have very high credit limits on their cards. That makes impulse buying and spending more on luxury items much easier. For your small business, it’s a win-win when customers are given more opportunities to spend money on your products.
7. Accepting Credit Is Cheaper and Easier Than You Think – Today’s card readers and software are not just easy to use; they are very competitively priced. That’s because the market is extremely competitive, and that fact works in your favor. Take a little time to look at your options, and you’re sure to find a payment processing company with equipment that matches your needs and your price range. You might even qualify for free equipment.
Those are just a few of the most compelling reasons for you to jump on the bandwagon and accept credit cards. Your customers will be glad you did, and your staff will appreciate the modern upgrades to your checkout process. Don’t wait another day to reap the benefits of accepting customers’ credit cards.
Virtually no week goes by without news of yet another data breach in which sensitive customer credit card information was compromised. As a business owner and as the holder of an account with a credit card processing company, it is vital that you take steps to secure your patrons’ valuable information.
Pay Attention to Your Hardware and Software
Check with your merchant services company to make sure that all of the equipment and programs you use, including any fixed terminal, tablet or mobile card reading software, is PCI compliant. Be sure your hardware is an approved PIN transaction security device and your software is validated.
Storage Is a Very Bad Idea
Regulations from your processing company specifically forbid you from keeping a record of the security code or any of the “track data” that is contained on a credit card’s magnetic strip. On any paper authorization forms that you may keep for your records, you must cross out the 3- or 4-digit security or CVV code with a dark pen in order to make it unreadable. Having approved hardware and software also ensures that you have not inadvertently stored sensitive data.
Encrypt Electronic Storage and Secure All Paper Records
In certain situations such as for recurring or mail order business, you will want to keep hard copy or electronic records of transactions. Always lock away written data in a safe or other secure location, and use encryption for electronic information. If you are unsure of how to do this or do not have the necessary equipment, you can pay a PCI DSS-verified provider to perform the service for you.
Encrypt Your Phone Recordings
If you take orders over the phone and record those calls for quality control or order tracking purposes, you now have an ever-growing database of customer credit card information. As with electronic data, it needs to be encrypted. Store it in a password-protected directory to guard against theft or misuse. Also, be sure that no software is attached to your system that would allow a criminal to transfer valuable credit card information via text-to-speech technology.
Safeguarding your customers’ sensitive credit card information is more than just a requirement from your payment processing company; it is also one of the most proactive steps you can take to protect your customers as well as yourself. In short, it is simply good business on multiple levels.
In recent years, pampering oneself has risen to an art form. It has gotten to the point that there seems to be a luxury manicurist or day spa on virtually every corner. If you want yours to rise above your many competitors, you may want to consider investing in the creation of a business app for your beauty establishment.
Examine Your Priorities
It doesn’t matter if you are running a hair salon, a barber shop or a full-service day spa; most business priorities are the same. For one thing, you want a steady stream of new customers. In addition, you need return business from regular patrons. Finally, your ongoing goal should always be to increase your revenue while keeping your customers excited and happy.
Get Online and Go Digital
Your first foray into the world of business apps will likely come in the form of a website. On your web pages, you can introduce yourself to potential clients, highlight the various services you offer, give visitors a chance to get to know your staff members and their work, and provide a way for people to sign up and get on your mailing list.
Of course, your site should also provide easy links to your social media pages where people can read reviews and look at customer-generated photos. Furthermore, your site can give your current customers a way to book future appointments and check on the status of those they have made in the past.
If you are keen about e-commerce, you could set up a shopping area where you could sell your favorite beauty products. Last but not least, your website can contain a link to the store where clients can download your mobile app.
As tablets and mobile phones quickly usurp old-school desktops and laptops, it is increasingly important for businesses to make their presence known via mobile-friendly applications. One way to do this is to sign up with one of the already existing promotion applications. For a fee, these prefabricated programs will do all the work for you as you attract and build your loyal customer base.
Another option is to develop your own unique app. Doing so is not as difficult as you might think, and there are plenty of options to hire someone to come up with the app for you.
Once your customers download your business’ unique app, it’s as if they have an instantaneous passport to your full range of services and benefits. These can include:
• Easy booking via the app with rapid-fire email responses to confirm that the appointment has been put in place.
• Email blasts and push notifications informing customers about flash sales and today-only specials.
• Handy appointment reminders that not only jog a customer’s memory about upcoming bookings but also encourage them to take care of a need they may have neglected. This strategy is even more effective if you can take a few minutes to send a personalized email to the customer.
• Location-sensitive alerts that are activated when a customer is nearby. These encourage customers to stop by your shop for a quick nail touch-up, blow-dry or chair massage if they have a break.
• Customer loyalty programs that reward customers each time they purchase one of your services. Many shop owners prefer a virtual card punch system that provides a free service after a number of punches.
• Handy features such as a style library that customers can view before they receive one of your services. You can also expand this to include photos of some of your and your staff’s best work.
• A gallery of your favorite products and how they are used. Not only can this provide a client with great ideas for how to maintain the hairstyle or manicure appearance they received at your shop, but having this type of gallery also gives you the perfect setting to market your favorite products. Considering that these items can definitely be some of your biggest revenue generators, having this capability is a win-win for both you and your clients.
• Referral rewards. Word of mouth is the most tried-and-true way for you to spread the positive word about your beauty business. Although people will naturally want to tell their friends if they are happy about a new look they received from you, they will be even more motivated if you provide them incentives such as discounted services or free products. While it might appear that you lose money by providing these incentives, they actually can pay for themselves many times over.
• Reviews engine. Similar to referral incentives, you can also use your app to encourage your best customers to give you positive reviews and, for all practical purposes, give you free advertising.
Believe it or not, your salon’s mobile app could catapult your sales exponentially. Do you remember when you were hesitant to adopt another form of technology, perhaps a mobile card reader or a cutting-edge styling wand? Taking the plunge and setting up a salon business app is no different. Soon, your customers will come to see you as a constant, friendly presence on their smartphones. In today’s digital age, that’s about as good as it gets.
Whether you own a casual restaurant or a busy retail shop, efficiency should be high on your priority list. That’s why you make your products easy to find, hire top-quality staff, and train employees on using your point-of-sale (POS) system to make customer payment experiences as smooth as possible. All of these strategies are right on target, but have you also considered implementing a plan for line busting?
What Is Line Busting?
Line busting involves using technology to minimize customer checkout times. All you need is a reliable Wi-Fi or Bluetooth connection, a mobile point-of-sale solution and staff who are willing to learn a new technique.
With line busting, you still process payments at your POS terminal as you always have. However, you now have someone greeting each of your customers in line or anywhere they may be in the store when they are ready to make a purchase. Your staff member takes their food order or records the clothing or other products they are about to buy using a mobile tablet. Even as the customer continues to move up in the line, their food order can be sent to the kitchen or merchandise can be scanned for purchase. Then, it’s just a matter of making the payment at the register. Ultimately, the line moves faster, customers are happier, and you make more money.
Other Advantages of Line Busting
When customers feel positive about their purchasing experience in a store or restaurant, they often tell their friends and family. Sooner or later, that good word of mouth can mean money in your pocket.
In addition, line busting gives your counter staff the chance to step out and actually interact with customers beyond simply taking their money or processing their payments. An employee whose duties are varied tends to be less bored and more satisfied with their job. Holding onto a good worker is one of the most important ways that you can ensure your business remains stable and profitable.
Another advantage of putting an mPOS tablet into the hands of your associates is that it does more than just process payments. With a few swipes, your staff member can see if an item is in stock or even locate it for a customer.
From busy airlines to restaurants, from hardware stores to clothing retailers, line busting is sweeping the retail and service industries. There is a good chance that it could be a huge benefit to your enterprise as well. Why not look into your mobile POS options today?
If you’re new to running a small business, you can’t be faulted for thinking that there isn’t all that much to learn about credit card processing and point-of-sale systems. After all, it’s easy to think that this is nothing more than the way you accept your customers’ payments. But once you learn how to make the most of your credit card reader system, you will see just how much it can enhance your bottom line.
Know the Rules
Whether you sign a contract or not, your payment processing company will still mandate you follow certain protocols. For instance, they will probably require that you provide additional information for online or telephone transactions where the card is not present. To reduce the chances of fraud and chargebacks, be sure that all of your equipment and security systems are up to date.
Be Clear and Transparent
Many product returns and chargebacks do not occur due to fraud; they are simply the result of misunderstandings. While you can never totally eliminate the possibility of confusion, you can keep it to a minimum by creating an environment of clarity and simplicity in your store and when it comes to your return policy.
Make it as easy as possible for customers to know which cards you accept and what procedures they should follow if they need to return a product, including any time limits. When issues arise, deal with them quickly and directly. Procrastination is never helpful when you own a business, particularly when it comes to dealing with customers or the IRS.
Protect Yourself from Fraud by Knowing the Warning Signs
Small businesses are the targets of criminal activity and data breaches because their owners often do not have sophisticated security systems in place to monitor customer purchase activity. Even though you don’t have a million-dollar system in place, you can protect yourself by contacting your customer if you notice any of the following:
• Ordering large quantities of the same item in different colors or sizes
• Customer uses multiple cards to pay for items
• Multiple orders on the same card shipped to various addresses
• Incorrect expiration date or security code
• Customer has a hard time providing personal data when you contact them by phone
• Rush shipping on large orders
Perhaps the best way you can make the most of your credit card system is to take the time to keep meticulous records. This attention to detail will not just be crucial when tax time comes around; it can also function as a vital safety net should you ever be involved in a credit card fraud situation. What’s more, thorough records can help you to see what is and is not selling and can help you predict what inventory you should order in the future. When you combine an organized back office with a credit card system that is economical and used to its maximum potential, you have a strong infrastructure on which to build your growing business.
It is notoriously difficult to sustain a restaurant business. When every penny counts, you would be a fool not to take advantage of every tool in your arsenal to maintain and enhance your profits. Assuming that you accept credit cards and are reasonably up-to-date in terms of technology, your restaurant point-of-sale (POS) solution is full of ways to keep more dollars in your pocket.
Thanks to your POS, you no longer need to scratch out long lists of the products you need on random pieces of paper. Nor must you pray that you have the complete list in your head to guard against running out of vital ingredients.
With every item documented and accounted for in your POS, you can accurately forecast how much of everything you will need, thus cutting down on waste. If valuable items start to disappear inexplicably, it won’t take months before you suspect that theft is occurring. Instead, you can immediately act to stamp it out.
Predict Sales Trends
Generating reports with your POS is a simple matter of a few clicks. With the information it provides, you can look back over specific time periods, noting when sales ebbed and flowed.
Armed with this information, you will be able to make accurate predictions about what your sales will be like during specific times such as the holiday season. Once you do, you can purchase exactly what you need without under- or over-estimating, thus padding your profit margin.
Gauge Staff Needs
Just as your POS can be a virtual psychic when it comes to sales trends, it can also track data to help you staff your restaurant appropriately. For instance, there is no reason to have a full staff of servers during times when you know there will be fewer customers, so you can trim staff hours and save money.
By the same token, being short-staffed during busy times can lead to dissatisfied customers and a long-term hit to your reputation. Once again, your POS can rescue you from potential damage.
Loyalty Programs and Promotions
Let’s face it: A half-full restaurant is a money drain. When sales are lagging, take advantage of your POS’ database capabilities to alert customers to flash specials and promotions that you can develop on the fly.
If your system is able to send out push notifications to customers’ phones when they come within a few miles of your establishment, you are even more likely to gain from spur-of-the-moment business. Once this happens and your loyal customers come back to visit during otherwise quiet times, your operational costs can be absorbed by means of the food sales you make to them.
Your POS is a lot more than a cash register. It can be your restaurant’s pipeline to lowered costs and increased profits, enabling you to utilize inventory and staff more efficiently. In the end, it just might help you be successful for years to come vs. suffering the fate of so many fledging restaurants.
Any company owner who cares about the stability and integrity of the business will naturally have backup systems in place that protect critical systems. That’s because accidents, data breaches and power losses occur no matter how careful you are. If you own a retail business, whether online or a brick-and-mortar location, you need to be just as protective of your interests.
Have you ever waited at the checkout line, only to learn when you get to the register that their credit card machine is not working? Not only were you probably annoyed but you also may not have even been able to complete your purchase using cash, particularly if it was a big-ticket item. At the end of the day, you left the store aggravated, and the enterprise lost the revenue you were about to send their way. You don’t want a similar scenario to befall your business, do you?
When a customer’s attempt to make a purchase is foiled by a non-working payment processing system, that person is very likely to move on to a competitor in order to accomplish his or her shopping mission. You work hard to get and keep your customers, so why would you let them slip through your fingers so easily?
If you have a payment backup system in place, your potential buyer probably won’t even notice any type of disruption, so you wouldn’t need to worry about them moving to a competitor and possibly becoming their loyal customer.
How to Protect Your Business
Now that you realize the importance of looking out for your critical data and credit card processing systems by backing them up, you may well be wondering what to do next.
Your first call should be to your credit card processing company. Ask the customer service representative to fully detail for you the mechanisms they have put in place that will protect you in the event of a system crash. If you are not fully satisfied with their answer, consider signing on with a second provider as a contingency backup.
If you are concerned that your DSL or cable internet connections may fail, you can obtain cellular broadband backup. As long as you only use it to protect key functions such as card processing, the monthly cost is quite reasonable. If the worst should happen and you experience a serious outage, you can transfer traffic to your secondary option.
In the end, defending your business from harm is relatively easy. Just figure out what you absolutely need to back up in order to continue operating; ensure that your system automatically switches to the backup contingency when an outage occurs; and finally, choose an option whose help desk hours mesh well with your timeframe.
When you are in the midst of a busy day, you cannot afford to wait for your provider to come online in a few hours. If you take the steps noted, you can go a long way toward safeguarding your retail business against the unthinkable.
Do you want to raise your profit margin while simultaneously getting to know your valued customers better? Creating a loyalty program can accomplish both of these goals. Thanks to today’s point-of-sale solutions, keeping the program going once you get it up and running is just a matter of a few clicks and some regular maintenance. Here are the main elements you will need if you are going to make your loyalty program shine:
Customers need to be motivated to join your program. After all, doing so involves some time as well as providing information such as their phone number or email address. In this age of endless spam, it’s your job to convince your patrons that signing up for your loyalty program is in their best interest.
You need to understand how to set up, maintain and grow your program. As we said above, your POS can be an indispensable part of your loyalty mechanism, but that is only true if you know how to use it. When in doubt, contact your payment processing company to get some training. Any vendor worth their salt will be more than happy to assist you. After all, your success leads to more profits for them.
Core Elements for Tracking Data
Your program is only as good as the tools you have in place to monitor it:
- Website membership. When your customer becomes a preferred member on your site, they can take advantage of exclusive specials and promotions. Meanwhile, you gain access to their all-important contact information for your database.
- Mobile app. When your website is optimized for mobile traffic, you can capture a whole new tier of customers. Combine that with your own app, and you can take things to the next level. Don’t be intimidated by the prospect of developing an application; it’s not as hard as you think. Better yet, there are plenty of professionals who would be more than willing to develop one for you. It just might be worth the investment.
- Your POS system comes packed with customer loyalty program-building tools. If you’re nervous about launching a program, set up a pilot for just family and friends. You’ll be a pro before you know it.
- Call center. Provide your customers another way to do business with you even when they cannot come to your physical store. Beware, however, of a call center whose staff is impersonal or hard to understand. The optimal call center experience is fast, friendly and task-oriented. Make sure representatives are trained to motivate customers to join your loyalty program.
- Social Media Management Tools. Whether it’s Instagram, Facebook, Twitter or the platform du jour, harness the power of social media. Reward your loyal customers for writing reviews and taking and sharing photos that feature your business.
- Customer Databases. These are the beating heart of your loyalty program. Work hard to maintain and grow your database with active customers. Use the database to tell you if a regular customer hasn’t bought anything for awhile. Then take a few minutes to contact them personally with an enticing offer.
- Digital Marketing Engagement. Today’s technology affords you numerous opportunities to keep your customers active and engaged. Take advantage of them all – email, social media, mobile app and location-based messages – to invite customers to stop by for a special sale or discount.
- Analytics Tools. Your POS isn’t just a database manager. It also enables you to generate sales reports that show what products are selling and which ones aren’t. You can also use online analytics tools to tell you how many visitors are coming to your website and how many are clicking away without making a purchase.
GETTING LEVERAGE AND MAXIMIZING BENEFITS
- Obtain customer intelligence that informs decisions. The more you know about the people who frequent your online or brick-and-mortar store, the better able you will be to tailor products and services to meet their needs. As part of your customer loyalty program, you might try generating a survey, complete with incentives to fill it out, that asks these very questions. The information you receive can turn into marketing gold.
- Use the information gained from analytics to refine your product line as well as your marketing programs. When loyal customers feel listened to, it reinforces their positive buying behaviors. What’s more, they tend to spread the word in a positive way about your store.
- Get to know your customers. Without a personal relationship, even the best marketing schemes can fall flat. People can quickly discern between fake and genuine interest in their needs. It takes time, but the power of the personal touch can never be overestimated.
- Make your rewards program easy for customers. When people can quickly see their status and track their loyalty points, they are far more likely to spend what it takes to get to the next tier or reward.
- Award points in real time. Whether it’s a punch of a card or a printout on a receipt, people like to see what they have earned right away.
- In the spirit of simplicity, eliminate fine print or confusing conditions from your loyalty program. All these do is create the misperception that you want to worm your way out of providing the awards your customers deserve.
- Market your rewards system to potential customers. If they don’t know it exists, how can they possibly sign up for it? In this case, their ignorance is your loss as well as theirs.
- Send reward notifications to your customers. When they have reached a tier or earned a discount or prize, celebrate with them via email or a notification on their mobile app. It’s a great way to get them to come back and spend money.
- Make the rewards system relevant to customers. Do some research to learn what your most sought-after products are. Then make discounting them an intrinsic part of your customer loyalty program. Make rewards meaningful, useful and of interest to your customers, and it’s a virtual guarantee that they will jump on the bandwagon.
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Pillars of a Successful Loyalty Program – An infographic by the team at Total Merchant Services
As a business owner, days, months and even years can go by without the need to access emergency funds to keep your enterprise afloat. However, the time will inevitably come when circumstances require that you dip into a pot of cash that you do not readily have on hand. By knowing your options and planning in advance, you can get your needs met much more smoothly.
Invest in Your Own Future
Running a business can often feel like a hand-to-mouth operation in which you spend money as fast as it comes in. When this is occurring, it is incredibly difficult to find the discipline to put dollars aside in an emergency fund. However, doing so at even the lowest level can add up over time and may ultimately save you from needing to resort to more extreme measures. The key to this strategy is deciding what percentage of your profits you can put aside and then doing your best to stick to your resolution.
Solicit Interested Investors
When you experience an unanticipated and urgent need for cash to keep the daily operations of your business afloat, one option is to ask family members, friends and other interested parties who might be willing to lend you the money you need. Unfortunately, many entrepreneurs do not have a ready supply of such cash cows.
Even if you do, be very wary of becoming entangled in financial obligations to relatives and friends. Nothing can tarnish a relationship faster than tensions over money. Therefore, use this option only if you have no other valid choices.
Take Out a Business Loan
In spite of your best efforts to save cash over time, you may still find yourself in need of emergency funds at some point in the lifetime of your business. When that happens, one of your first ideas will probably be to take out a traditional business loan.
Most likely, you are familiar with how this type of arrangement works: You go through an application process with a financial institution. If you are approved for the loan, you begin paying it back at predetermined intervals. In addition to paying back what you borrowed, you are also responsible for interest charges until you are finished paying. Should you have the means to pay back the entirety of the loan early, you might also be assessed a prepayment penalty.
Apply for a Business Line of Credit
On the surface, a business line of credit resembles a loan. You approach a potential lender and request a specific amount of money, usually being asked to provide evidence of your credit history and other relevant factors. As with a loan, your application can be either declined or approved.
The difference between these two financial arrangements becomes apparent after you are approved. Once accepted, you are given access to a set amount of funds that you can use at your discretion. You only pay for the amount of money you actually use plus interest charges. As long as you continue to pay down your debt, a business line of credit will be constantly refreshed, giving you ongoing access to a revolving amount of money.
One note of caution: Before signing on the dotted line for a business line of credit, be sure that the financial institution or merchant account services provider will not charge you non-use or monthly maintenance fees that could make you pay up front for cash that you never actually use.
Obtain a Business Credit Card
Many entrepreneurs fall into the trap of using their personal credit cards to cover the expenses that suddenly arise when an emergency occurs. This can lead to chaos and confusion in your bookkeeping as well as added angst when tax time comes. Instead of using your own personal plastic, consider getting a business credit card.
Like a line of credit, this is a revolving arrangement in which you only pay charges for the portion of the full amount of funds that you are actually using. With both business lines of credit and credit cards, you can actually use them to raise your credit score and enhance your profile. Over time, this can make applying for business loans easier and less costly in the future.
Get a Cash Advance
If your business accepts credit cards or has other payment streams, you might also consider asking your merchant account services provider for a cash advance. This is not a loan; instead, this type of financial arrangement is based on your future credit card revenues. In effect, you are selling a portion of your future profits to the lender in exchange for cash on hand right now.
Cash advances often come with fees that are higher than what you would find in a traditional business loan. However, they are frequently available to entrepreneurs who would be rejected for a traditional business loan. If you decide to take this course, be sure you have a thorough understanding of all the fees you will be charged in order to determine if this option is a sound financial move.
As is the case with so many other aspects of running a business, preparation and preemptive action are excellent strategies to adopt when contemplating how you will obtain cash in an emergency. Take time now when conditions are stable to map out your plans of what you will do should the worst happen. Then, if it does, you can act decisively in the knowledge that you have previewed all of your options and set the best course.
Is money flowing out of your small business a lot faster than it is coming in? With stiff competition, increased staff costs and constantly rising expenses of products and services, it’s no wonder you’re struggling. Fortunately, there are some concrete steps you can take right away to stop the bleeding and get back on the road to profits instead of losses.
While it’s tempting to think that the solution lies mostly in making more money, you might be able to trim a significant amount from your losses by being more frugal. Examine all of your recurring costs, including what you pay for insurance and utilities. While cheaper isn’t always better, you might find places where you can reduce premium levels to basic ones or otherwise excise costly luxuries.
Another money hog can be your advertising budget. Look carefully at which of your ad campaigns actually brought sales and which did not. Only continue to fund marketing plans that are truly effective.
As difficult as it may be, you may need to re-examine your labor costs. That may mean paying your employees less, or only keeping on workers who are at the lower end of your salary structure. Be ready, willing and able to work extra hours yourself without expecting to be paid. Enlisting your family is even an option. If these important people realize just how high the stakes are, they will probably be more than willing to pitch in.
Act As if Every Sale Is Your Most Important
If you are falling into frustration and despair as your profits decrease, you might find it next to impossible to get excited about the products or services you sell. The problem is that a bad attitude leads to a self-fulfilling prophecy. Instead, force yourself to be enthusiastic no matter how you feel inside. Your upbeat attitude will be contagious to both customers and staff, leading to a more vibrant workplace and happier people. If a certain member of your team is a dynamo on the sales floor, be sure to send your best customers to that person.
On the other hand, there is no room for slacker employees with poor attitudes. At a time like this when your survival hangs in the balance, you have no other realistic option than to fire people who cannot help you turn things around. If a lead comes your way, take the time to follow up on it personally. Devote a block of time each day for making follow-up calls and sending emails to prospective customers. Carefully record when you last spoke with a potential customer, setting a concrete date for your next call.
Enhance Your Efficiency
Time is money; therefore, the more streamlined your business procedures and practices are, the more dollars will stay in your pocket. To that end, your job is to make all aspects of your company as free-flowing and easy as possible. That includes everything from your credit card processing protocols to the way you track your staff’s time, schedule their hours and pay them. Streamlined inventory management is also a must.
The good news is that today’s modern point-of-sale systems enable you to easily automate many of these tasks, helping you to stock only what you sell and replenish your wares before they run out. Finally, take a look at your customer checkout setup to be sure that your buyers’ experience at the register is as fast, secure and seamless as possible. After all, it is satisfied customers who come back again and again and who spread the word about your store.
Encourage People to Pay on Time
Chasing customers for late payments is one of the most frustrating and time-consuming parts of a business owner’s life. While you will never be totally free from this unpleasant task, there are some things you can do to entice tardy payers to fork over what they owe.
For one thing, you can offer a small but appreciable discount for paying within a set period of time. Furthermore, if you would prefer that someone pays within 60 days after purchase, ask them to give you the money in 45 days. That way, they can still be late without causing you a great deal of fiscal pain. Finally, make paying you as fast and easy as possible by being willing to take credit card information over the phone or letting your customer conduct the transaction online.
Get and Keep the Right Employees
Competent and loyal employees are worth their weight in gold. They consistently promote your brand and provide excellent customer service, often also mentoring other employees as the years go by. Hiring and keeping people like this in your organization should be one of your main priorities. That means you should spend as much time as you need to find quality workers. Once you have hired them, carefully and thoroughly train them in all of your processes and protocols. The tone you set with them during these crucial first few months is generally reflected in the way they will work throughout their tenure with you.
Never Underestimate the Value of Your Customers
The profits you make or the lack thereof are directly connected to the people who either are or are not buying what you are selling: your customers. Of course, people only want to spend money on items and services that are of high quality and that they either need or want, but those are not the only pieces of the equation. What you may have lost sight of is that your customers are, above all else, people. They respond to the personal touch, and they are more likely to give their dollars to a person or a business that makes them feel special.
To that end, it is your responsibility and that of your staff to take the time to establish a real connection with the people who walk into your store or who click on your website. If you have an upgraded point-of-sale system, you can easily compile a database of customer information, including their birthdays and even the products they prefer. A specialized message from you may serve to cement a long-term, positive relationship between you and your best customers.
Turning things around for your business won’t happen in a day, and no one is saying it will be easy. However, you have many tools at your disposal to change your prospects. Take the first step today.
You would think that customers would be flocking to embrace mobile payments. In spite of their apparent advantages, many buyers staunchly resist the appeal. Fortunately, there are some things you can do to get your NFC-enabled payment terminal humming with activity.
Why It’s Important
In a nutshell, increasing customers’ mobile payments is good for business. Doing so leads to a boost in revenue. After all, people carry their smartphones with them all the time; the same is not true for cash or credit cards. As a result, impulse purchases are more likely with mobile payments. Moreover, checkout times are faster, particularly quicker than the time it takes for a customer to dip their EMV chip card.
Finally, when your customer pays with their phone, your point-of-sale solution can capture their data, thus creating a gold mine of information you can use later for marketing purposes.
Here are three ways you can encourage customers to starting using mobile payments:
- Make it Clear
One reason your patrons might not be using their phones to pay may be simply that they are unaware that you accept mobile transactions. Take all of the guesswork away by placing clear signs indicating that you accept Apple Pay, Android Pay, etc.
- Educate Wary Customers
Once people know that you have the means to take their smartphone-based payments, some may need reassurance that these transactions are easy and secure. Take some time to develop a short, clear explanation about why mobile payments are safer than using a standard credit card since their card data is encrypted and the transaction does not take place without the customer’s unique fingerprint.
- Lure Them with Rewards
Once you ensure that your existing rewards program is linked to your mobile pay platforms, your customers will have yet another reason to jump on the smartphone payment bandwagon. When they do, they will no longer need to keep track of a physical rewards card and can easily monitor points via email.
Smartphones look to be here to stay, so why not capitalize on them? Take a little time to upgrade your systems to accept mobile payments if you haven’t done so already. Train yourself and then your staff on the advantages of this platform as well as how to quickly and effectively use the equipment. Once a neophyte Apple Payer or Android Payer realizes the advantages, they may never want to conduct a transaction in another way again.
Your point-of-sale solution is a vital part of your company. It enables you to perform payment transactions, streamlines and automates your business, helps you market yourself and create ultra-useful reports. Enhance its benefits by protecting yourself against making common mistakes that can dull your POS system’s effectiveness.
Making a Rash Decision
One of the worst errors you can make when it comes to choosing the right credit card processing for small businesses is to jump the gun. Many entrepreneurs leap at the first POS hardware and software they see, failing to realize that they may be contracting with a particular merchant account provider with questionable practices. For instance, you might be paying elevated processing charges or be forced to contend with account freezes or early termination fees.
Making an impulsive POS decision might also land you with a company that has shoddy customer service or does not provide adequate upgrades or training on new equipment. To protect yourself against this distressing fate, do your homework. Talk to your peers about what systems are working best for them, and ask your prospective merchant account provider if you can test out the system before you buy. If something seems wrong about a particular product, move on to one of the other excellent POS products on the market.
Installing It Without Guidance
POS solutions have numerous settings that, if improperly calibrated, could cause you to pay higher fees. If your system has inventory capabilities, you’ll want to be sure things are set up correctly at the start, or you may need to re-input all the data again down the road. Consequently, it makes sense to ask your POS provider to set up the system for you in advance, so you can enjoy optimal performance and cost effectiveness when it’s on your store counter.
Failing to Plan for Breakdowns
However well-maintained it is, no system is immune to breakdowns. As Murphy’s Law predicts, these catastrophic failures always happen at the least opportune times: during the holiday rush, when you are critically short-staffed, etc. That’s why it makes sense to have a backup option.
If your system is web-based and uses WiFi to process payments, be sure to have a “hotspot” connection that can be readily employed to process credit card transactions in the event that your main system goes down. Another option is to have a secondary system handy for times like this. It could be a virtual option or even a mobile system on your smartphone if you’re really in a pinch.
Violating Your Merchant Services Contract
There are many ways you can go against the contract you signed with your merchant account provider, often unintentionally. Regardless of the root cause of the breach, it can end up meaning that your account is frozen, or you may be rendered unable to use your POS.
Minimize the chances of this happening by first carefully reading the contract you are about to sign. Ask your merchant provider any questions you have. After becoming an active customer of the account provider, review the contract at least annually to keep aware of its terms. For the most part, you will remain in good standing with your provider if you stay within the monthly credit card processing limits specified in the contract and minimize chargebacks.
Failing to Keep Your POS Secure
Small business POS systems are often targets of fraud, especially if ignorance or laziness leads to lax security. Make sure your system always meets PCI-DSS compliance standards: Upgrade software to the latest security patches; provide each person to whom you give access a unique ID; encrypt your WiFi network; choose strong POS passwords; keep your POS software restricted from customers and staff without administrative privileges.
Failing to Take EMV Cards
The old-school magnetic stripe credit cards are quickly being supplanted by the new Europay, MasterCard and Visa (EMV) cards, which encrypt transactions and are much more secure. Even so, many small businesses have dragged their feet about upgrading their POS systems to accept so-called chip cards. If you are one of them, your reluctance is leaving you open to fraud since criminals are now targeting the security loopholes in magnetic stripe systems. Should you become a victim of fraud, you will be on the hook to pay the costs, and that could be a financial nightmare for virtually any small business.
Under-Using Your POS
Your POS is a great deal more than a glitzy cash register. If you are only using it to process customers’ debit and credit card transactions, you’re missing out on some game-changing capabilities. These include being able to generate sales reports, developing a customer database from which you can easily build a loyalty program, tracking your inventory, managing your employees and payrolls and conducting e-commerce.
If you suspect that you are not employing your system to its full advantage, it’s time to have a long chat with the company who sold it to you. Ask that a representative provide you training. Then integrate what you have learned into your business model.
Having a modern POS is a lot like hiring a bright new employee. It might take a little while to get to know them, but once you do, you will wonder how you ever functioned without them. Taking full advantage of the capabilities of your POS system can have long-term positive effects on your business, your profits and the satisfaction of your customers. Don’t wait another day to harness this power.