If you are an entrepreneur, you have a lot on your shoulders – but you are not alone.In 2008, the Small Business Administration (SBA) estimated there were almost 30 million businesses in the United States alone. Small firms (those with less than 500 employees) make up 99.9 percent of all businesses.
It’s tough out there for all entrepreneurs, but even more difficult for those who run their own businesses – bosses who have no employees, but carry the business by themselves. According to the SBA, about 10 percent of new businesses enter the market each year – and about 10 percent exit it. Solo entrepreneurs have a turnover rate about three times as high as businesses with employees.Facing these kinds of odds, entrepreneurs should seek every solution that can make life easier for them and boost their business.
One of the easiest ways to ease your work load is to open a merchant account that will allow you to process credit card sales. One swipe of your customer’s card and you and the credit card processing firm have all the information needed to make a sale. Consider the benefits:
Credit is Quicker and Safer than Checks and Cash
Many people grew up writing checks, instead of carrying cash. But with today’s sophisticated printers, fake checks and forged signatures, many merchants have been forced to quit accepting checks. After all, if someone pays you with a bad check, it’s you who will have to take time to follow up with the banks in an effort to get paid. Plus, our society is becoming increasingly paperless. Part of the reason people love credit so much is that no one wants to deal with the hassle of cash any longer.
Credit Cards Do Not Bounce
And if they do, it’s the credit card company that goes after the bad debt – not the merchant. When your customer swipes a credit card, the authentication process starts immediately. If there is a dispute, the cardholder takes it up with the credit card company and vice versa. You, the merchant, were paid long ago.
Safety First
The more credit card transactions you have, the less cash in your register. This cuts down on theft from cashiers, misplacement of funds and the risk of robbery.
Simple Field Transactions
Even if your business does not operate out of a bricks and mortar store, your customers will still want to pay with plastic. The retailer who has the ability to process credit cards in unconventional venues has a clear advantage. For example, if you want to sell your inventory of skis from the back of a truck in the parking lot of a ski resort, you’re going to be met by customers who probably don’t have the cash on them. But thanks to their credit cards and your merchant account, you can process the sales using a cell phone, laptop or portable swipe terminal.
Cut Down on Trips to the Bank
Gone are the days when you have to rush to the bank after closing up to make a deposit. The processing company will deposit funds from credit card transactions directly into your account within two or three days.
Of course there are some aspects of credit card business that you need to watch for:
Avoid Chargebacks
A chargeback is when a transaction is reversed and the amount is deducted from your merchant account. This is how processing firms handle double charges, expired credit cards, customer disputes, fraud and bank errors. As a merchant, you want to avoid chargebacks. Not only do you have to make up the funds, but if you have too many, you may lose your merchant account. Taking some simple precautions can help prevent chargebacks – such as verifying the address of the purchaser in case of fraud. If an order seems suspicious, get in contact with the customer immediately. And most importantly, follow all the steps outlined by the credit card processing company. They are the experts in avoiding problems.
Watch the Fees
As a merchant, you will pay several fees to the service processing your credit card sales. It’s a cost of doing business – the benefit of which far outweighs the fees. Remember, you can expect to sell more merchandise once you accept credit cards. Studies show that people who pay with credit cards typically spend 30 percent to 100 percent more than they would with cash. But in return, you’ll pay a transaction fee on every purchase and several fees at every stage of the process. They include: