Have you wondered about taking the next step to having your small business accept credit cards?
It is a big step, but depending on the type of business you run, it can save you money in the long run. For example: My sister is an electrician, and for years she ran her business with cash or cheque for payments. She was able to keep her prices a bit lower for this reason.
For about 95% of the business, this worked out well, as most of her customers, were "friends of friends" and a lot of their work was planned. This means upgrading lighting and other electri
The other 5% of these customers, were people who simply did not have the money, or the job grew as more issues were revealed behind the wall, and the bill would grow to the point where these customers, would either stall paying or make payments.
This can be very hard on a business as it stunts cash flow, not to mention the time taken to chase down some of these tardy customers.
Accepting credit cards made a huge difference in this customer base. She had always been concerned about the fees involved and her bottom line, which is natural, but when we looked at the big picture, we did realize just how much of the population works on credit and how many customers were willing to pay slightly higher rates so they could use their cards.
As an electrician many jobs are not planned. There have been many customers that did not "plan" to need an electrician when they bought that old house, but were forced into a situation to make the house safe. In this case a cash strapped home owner, may not have any choice but to rely on credit cards.
As points cards starting showing up on the market, more and more people would ask right away which credit cards we accepted, and since we didn't accept any, we were losing out on customers. These points cards are now being used for most of the household purchases, accumulating enough points to end up with free gifts and holidays. So, there is a big push with points cards and customers are using them from everything to drug store and grocery store purchases to any work needing doing on the house.
She decided to take the time and look into it, and the first step was to ask her bank. They recommended a credit card processing company whom she then contacted and very quickly she was set up to take Visa and Mastercard.
As her business is out in the field and on the road, she didn't want the expense of a electronic machine like you would see in retail stores, so she opted for a old fashioned manual card processor, which you then phoned in for an authorization number.
This way you know right away if the card is accepted, and she knew once she got that number that within 48 hours this money would be in her bank account.
What you do need to research for accepting cards, is the rates the processing companies charge. In her case it was quite cheap, but she chose to drop American Express as it was double the rate at the time and she did not get many requests for it.
Her business has grown quickly simply because she now takes cards. She did a detailed cost analysis of her expenses on each job, and has allowed for the extra 1.4% she was being charged for having this ability.
Obviously there are expenses involved when it comes to a small business accepting credit card payments, but really take a look at your customers. If yours is the type of business that relies on the public sector, such as with trades, then this is something you may want to consider adding to your small business.
You need to set up your bookkeeping program for cards, but once you do, it is pretty straight forward.
The first step is research. Find out what these card processing companies will charge you. Start with your bank and see who they recommend. It will be setup so that the money goes automatically into your bank account which is a time saver. While researching, find out all charges. For example: Some of these companies will charge you a minimum "admin fee" if no one uses a card that month. It could be 5 dollars or as high as 20 dollars.
Find out all the details, you don't want to be "nickle and dimed" to death either! Research what type of machine works best for your type of business. Some of these electronic satalite machines will cost you per month and can get pretty high, so if you don't need one with all the bells and whistles, then don't get it.
If you do, make sure you include these expenses into your rates so that you are not out of pocket for the lease payment on these machines and an
Once you are setup, you can then let your customers know that they can pay with cards as an option. If you send out invoices in the mail, change them to accommodate an option for accepting credit cards and then the customer can write in their information and send the invoice back to you, or even do this over the phone.
There are many ways to accept cards now with all the updates in technology. If you really can't see your business taking this next step, but you do wish to offer some kind of payment plan, you could start with Paypal and take online payments. It is free to set this up but there will be fees involved when anyone pays you this way.
Just because you may be a "one person" micro mini business, doesn't mean you can't accept credit card payments. You just need to be able to show a working business and a need to get paid!