Uncategorized

Credit cards have become the universal currency of life.  American Express is a huge player that is excepted ALMOST everywhere.  Yet can you think of a company or store that does not accept Visa or MasterCard?  If you can, do you find it convenient to do business with them?  Have you at times not bought something from them simply becuase you didn’t have cash on you and they didn’t accept credit cards?

Merchant Services are now a global phenomenon.  Accepting credit cards is a must for any business and it has more of a global appeal than Soccer as this entertaining 2010 Visa commercial highlights.

When you are starting up a business there is a lot of ways you can save money.   You know that every penny counts when you are starting up your business.  So today were are going to share with you the 7 most common mistakes of wasteful spending in a start up.

1) Assuming the best without planning for the worst.   Most start ups fail.  The simple truth is that when most people start out a new business they have an idea without a formal business plan.  If they do have a business plan they make financial projections that are so rosy they get themselves really excited.  This leads to an irrational exuberance and an “I want it now” attitude.  The end result is the business owners overspend and are not strategic on where they place their investments. 

What you need to do is write up a business plan, and within your business plan have best case, expected case, and worst case scenarios.  You must take emotion out of this and look at this completely logically.  Then within your business plan, you need to have a contingency plan for anything less than your expected scenario.

2) Failing to shop for different vendors.  For every product or service that your business needs that could cost a reasonably large amount of money, you need to shop around.  This goes for things like rent, computers, office supplies, marketing services, merchant services, contractors, and paying fair and reasonable compensation to employees without underpaying (and causing resentment), or overpaying and wasting capital.

3) Not accepting credit cards.  Accepting credit cards improves sales everywhere.  It is now the currency of life.  In recent years even McDonald’s, Wendy’s, Sub Way, etc. have started accepting credit cards.  They do so because it improves sales by more than 400%.  The key when looking for a merchant services provider is to find one that provides free merchant equipment, and low merchant services rate and fees.

4) Relying too much on debt financed employees rather than contractors.  When starting out if you don’t need a full time employee for a position, get a contractor.  Websites like www.elance.com and www.guru.com are great ways to find good contractors cheap and fast.  In addition, if you are using venture capital or bank loans to fund your business you need to be very careful to use every penny wisely.

5) Excessive Debt Financing.  If you are looking to finance your business you can do this several different ways:  one, a bank loan;  two, venture capital; three, your own capital.  Obviously the best solution is to use your own capital, and then get setup with a line of credit with a bank  in case you need the money.  If you negotiate with the bank intelligently you won’t have to personally guarantee the full amount either. 

6) Not investing in online marketing.  Search Engine Optimization, pay per click marketing, and email marketing have the best Return on Investment of any form of marketing besides word of mouth (with can also be done through Social Media).  Fail to do this and your business is missing out on a heap of cash.  What is also great about this form of marketing is it is completely trackable so you can know to the penny how many dollars you get back for every dollar you put into your advertising efforts here.

7) Blind Faith – You should have no blind faith in anyone – not even in yourself.  For yourself, you should be constantly reading on how to improve yourself and your business.  Websites like www.Gazelles.com are great places to get a better than an MBA level education on how to succeed in business – just by reading.  When working with your business partners, and contractors as well, bind faith is not great either:  trust but verify.

Do all of the things above and your business is on the path to being able to produce prosperity.

When you are looking for a merchant services company that does credit card processing and electronic check payment, it is difficult to find a legitimate and reliable company that you can trust to give you a good price and good customer service. 

One of those companies you can trust is North American Bancard.  It started with one employee, has grown to over 300 employees and provides credit card processing services to  over 110,000 businesses.  Even with 110,000 customers, North American Bancard has maintained a an A+ BBB Rating.  That is a difficult thing to do in an industry that is known for sudden rate and fee increases, as well as dishonest sales people.  If you operate a service-based business you know that you have to do a lot of things right in order to keep your customers happy.  What are the things that North American Bancard has done in order to be an A+ BBB Rated company (the highest rating of the Better Business Bureau)?  Really it’s quite simple:

1) Offer good merchant services processing fees and do so in a simple, honest, and easy to understand way.

2) Give free merchant equipment to their clients.

3) Give good customer service to their merchants.

It’s really that simple.  That is why ChoiceMerchantServices.com has partnered with North American Bancard.

Every local business wants more sales and revenue.  It’s always a good day when your merchant services equipment is being used non-stop to accept payments from customers.  The question is how you do that.  Here are some simple steps to help your cash register bring in the money whether you are a local business or even if you are business that serves the entire nation.

The fact is that people look for businesses online now.  The days of the Yellow pages helping your business get real visibility are over.  In addition, by 2015 mobile internet usage will exceed desktop usage.  The majority of mobile searches in Google are for local businesses and those people searching want to buy.  Getting your site optimized to come up on the search engine rankings for local searches on desktop computers and mobile devices will bring in a lot of new business for your company.

So here is how you can get the edge on your local business competitors:

1. Setup a website for your company.

2. Setup a contact us page with your contact information and local business address in it.

3. Install rich snippets on your website.

4. Setup a Google Places account.  All of the above will get you setup for free local search traffic from the search engines.  This will lead to local foot traffic and customers for your store.

5. Setup a Google Adwords account.  Then once you setup your ads on the Campaign Settings, set them up to geo-target the geographic area right around your business.  You can target down to individual cities, town, metropolitan areas, etc.  To get a good ROI, just set your geo-target settings to the geographic area that your customers usually come from.

There is a lot more that we can share with you later on to get more traffic and sales to your store, but this is a great way to start.  Stay tuned for more information.  Our goal is to get your credit card processing and cash transactions to dramatically increase, and we have the knowledge to help you do that.

When looking for a good merchant services processor there are several things you need to be wary of: 

Thief Practice #1) If you get a credit card processing rate that is too good to be true, for example a .98% discount rate, look very closely at the fine print.   What you will probably find is a mid-qualified rate in excess of 3% and a non-qualified rate in excess of 5%.   Most merchant services processors will charge a very low-qualified rate to make you think you are getting a good deal.  Yet, in reality they are placing a huge mark-up on the mid-qualified and non-qualified credit card processing rate.  They are tricking you into thinking you got a great deal, when in fact they are robbing you on your mid and non-qualified transactions.  For most merchants, mid and non-qualified transactions make up in excess of 30% of their total volume.  So a big mark-up here could cost you 1-2% of your total annual sales!  Do you want to give up 2% of your margins to excessive credit card processing markup?  I know I would not.

Thief Practice #2) Look at the fine print.  Most merchant services companies state that they can raise your rates at any time and without warning.  This is not fair, so ask for some protection from this.

Thief Practice #3) You monthly minimum fee, gateway fee, statement fee and everything else should be no more than $25 per month in total.  Anything more than that is just plain thievery.

Thief Practice #4) Find out from your merchant services company what is an acceptable charge back rate and get that put into your contract. Almost every contract you sign with anyone states that if you have too many charge back,s your merchant services processor can withhold new funds from your bank account and actually go into your checking account and take  all of your money and hold onto it until they feel like giving it back to you.  Sound scary?  That’s because it is.

At Choice Merchant Services, we move all of our credit card processing volume through A+ Better Business Bureau rated North American Bancard.  When you get a merchant services processing quote from us you know it is done so with integrity and that we will use good and fair business practices with you.  You can’t maintain an A+ rating with the Better Business Bureau in the credit card processing business unless you treat people right.

So only work with A+ BBB rated companies and be on the lookout for the merchant services thief by looking in the fine print for the 4 points above.  When you do that, you and your business will be in much better hands.

The world is going mobile.  Everything is on the go.  In fact, it is predicted that by 2015 wirless web surfing activity will surpass desktop web suring activity.  So when it comes to the world of credit card processing and merchant services, it is no different.  Verizon Wirless recently released a funny commercial called Suzy’s Lemonade.

In this commercial an adorable 8 year old girl starts up a lemonade stand empire using wirless merchant services.  She uses a Verizon phone with a built in swipe credit card processing terminal to accept lemonade wherever her stand is.

Check Out This Video: Suzy’s Lemonade Stand

Taking a serious look at Suzy’s lemonade, let’s see how much money she saved her lemonade stand empire by using wireless merchant services.  Le’ts assume she was doing $500,000 per month in sales.  If she was using something like dial charge to accept credit cards remotely by using the touch pad on her phone, her average credit card processing rate would have been about 2.70%.    Now say she used wirless merchant equipment  like the Verifone Vx670 or the Way System’s Way 5000 terminal with a swipe transaction setup, her average merchant services processing cost would have been about 1.90%.  Let’s do the math and figure out her savings.
 
Costs with a non-wirless terminal:

$500,000
x 2.70% in non-swipe processing costs
=========
$13,500/month
X 12 months
=========
$162,000 per year

Costs with a wirless terminal:
$500,000
x 2.70% in non-swipe processing costs
=========
$9,500/month
X 12 months
=========
$114,000 per year

$162,000 per year in non-wireless processing costs
-$114,000 per year is wireless processing costs
===============================
$48,000 per year in saving using wireless merchant services!!!  So it seems like Suzy is pretty smart after all!

In the economic environment that we are in now, just about every business needs to cut costs.   The question is, where do you cut costs and have it not hurt your business?

When a company is having economic difficulties or wanting to increase their net income, an owner or senior management may decide that they need to cut costs by a certain percentage, for example, 10%.  They then make an across the board 10% cut in everything.  This is stupid.  There are areas of a business that deserve additional investment because there is a good return on investment there.  There are other areas of a business that aren’t needed and can be cut or downsized.   In addition, there is waste in just about every business that should be found and eliminated.

Another common mistake is for senior management to have a gut feel as to where the waste in a business is or what product lines, services or departments should be cut.  Gut feels are great, but they are often wrong and can only get you so far.  Instead create a financial dashboard for your company.  Your dashboard should show you your revenue, gross margin and gross profit by product line.  It should also have key performance indicators that help you gauge the health of every individual business unit.  Then, when it comes time to increase your net income or make hard cuts, you’ll have the facts right in front of you to make wise decisions.

So here is the right way to cut your costs and increase your profits:

1) Pull up your financial dashboard and see areas of your company that are growing, shrinking, creating profit or are an outperforming outlier or an underperforming outlier.

2) If something is overperforming, for example, creating excellent gross margins, mark it as a bright spot.  See how you can duplicate that in other area in your company.  This is probably the last place that you want to make cuts.  Instead, if you can afford it, this is an area of your business that you should invest more money in.  If a business unit is underperforming, find out why.  If you don’t have a good plan to turn it around, then downsize this business unit or get rid of it all together.

3) Go through your accounts payable and look at all invoices.  Talk to the appropriate people in your company and ask if they really need that product or service.  If they don’t, get rid of it. If they do, require that they shop around for a competitive quote, then take that quote back to the vendor and show it to them to negotiate a better rate with it, or find another vendor.

In addition, by price shopping many of your services you will learn a lot about them.  For example, when looking for credit card merchant services processing, by price shopping you will find out that you really should not be paying more than $10 to $20 per month in fees and your merchant processing rate should be no more than 1.6% for swipe transactions and 2.25% for non-swipe transactions.  In addition, you should be getting free merchant services equipment instead of paying $250 to $1,000 per merchant equipment.  On average, this type of savings could save a company processing $50,000 per month in credit card sales about $4,900 per year.

4) Also, pull up Google News and Google and do some searches to see what the typical costs are for everything your company buys.  If you are overpaying, get a better deal.  Lastly, look and see what the economic forcasts are for your industry or product and services lines of your company.  If the forcasts look bad for certain parts of your business, you may very well be best served by cutting your investment in them thus maximizing your profit there, and moving your investment dollars to an area of your business that has more growth potential.

The key to successfully cutting budgets at your company without hurting it is to be strategic with your cuts.  What is easiest is not usually what is best.  Making your business better in the long run can require some pain now – but that’s OK.  Just force yourself to maintain a positive attitude and a can-do spirit and you will get through the hard times and budget cuts, and you will find a way to prosperity.

Welcome to The Merchant Services & Business Insider – as a regular reader, you will get:

• Insights that will save companies  like yours time in processing electronic payments and accounting by getting advice on the best of breed merchant equipment and merchant software to accept electronic  payments. 
• You will learn how to integrate your electronic payment processing into your accounts payable and accounting systems making running the finances at any sized company, big or small, easy and fast.
• You will know the tricks that merchant services providers use to hide fees and get you to pay more.
• You will learn how to to save hundreds of dollars per year in merchant services costs if you are a small company, if you are a huge company we will show you how to save millions of dollars per year in credit card processing costs.
• You will learn how and why you should never have to pay for merchant services equipment and software.
• Plus, we’ll have a lot of fun along the way by sharing with you great jokes, videos and business news that can help you save money, grow and prosper your business.

Get ready!  You are going to learn a lot and have a good time doing it!