Nothing is more frustrating or confusing than when the business that you’ve poured so much blood, sweat, and time into inexplicably begins to stall or go backwards. This can happen for a variety of reasons, but for most business owners, lack of effort isn’t one of them. We get it, you’ve had your head down, grinding away on the actual business of your business and probably haven’t had the time to take a step back and look at the issues holistically, or like many business owners, you may just be too close to the problem. Fear not though, because we are going outline 3 of the most common drags on small businesses and what you can do to overcome them.
You Don’t Have A Customer Acquisition Plan
You may be a brand new business still trying to build up your customer base, or maybe you’re a more established business that has seen success from the moment you threw open your doors, but over the years your customers have begun to dwindle. Regardless of how long your business has been open, or what product or service you sell, or if you do transactions online or in person, your business needs a customer acquisition plan.
Your business needs customers in order to survive, right? It seems obvious, but many business owners are so focused on their actual product or service that they forget to plan out how they are going to market and sell it. You may not think of yourself as a marketer, but you are an entrepreneur, which means you are by default, a marketer, a salesman, an accountant, an operations manager, a CEO and maybe even a custodian. You get the idea.
It’s ok though, marketing doesn’t have to be overwhelming. For starters, look at what your more established competitors are doing. Why reinvent the wheel when there is already a working approach that you can model off of? Second, define who your ideal customer is. How old are they, are they male or female, where do they live, what are they interested in?
Once you’ve defined your audience, you can begin planning out the tactics to get in front of them. Are you a boutique clothing shop with a physical store? Run a sale and advertise it on Facebook to women within 10 miles of your store between the ages of 21 and 35. Maybe you’re a service based business like a mechanic. Run ads on Google search targeted to your local area so that you show up at the top of the page when someone searches “mechanics near me.” If you’re a restaurant, try running a special on Groupon, building out your Yelp and OpenTable profiles or being a concessionaire at local events.
The approach you take will vary by your specific business, and maybe you don’t think you have the perfect plan, but you don’t have to. You just have to Have A Plan. If this still seems too daunting, there are tons of great freelance marketers and agencies that you can outsource to on sites like UpWork and Freelancer.com.
You’re Overpaying For Merchant Services
When you’re a new business, your options for finding a merchant services provider to process your credit card transactions can be limited. The companies that offer the lower, more competitive rates often require a certain length of financial history and/or transaction volume to work with them. As a result, many new businesses sign up with whoever will approve them and get them up and running the fastest. Of course there’s no shame in this, you were busy trying to get your business up and running and at the time the 3%-4% fee probably didn’t seem like that much lost revenue.
The problem is that merchant services and credit card processing become an afterthought for most business owners once they are initially setup. Transactions are going through everyday and the money is (eventually) making it into your bank account and you don’t want to go through the hassle of shopping around and submitting all that application paperwork again, and you probably wouldn’t save much anyway right? WRONG!
The credit card companies (Visa, Mastercard, American Express) charge a fee called interchange, which on average is 1.5% or less of each transaction. The merchant service provider then tacks on a markup percentage on top of that, a statement fee, an access fee, a monthly fee, and a fee because it’s Tuesday and it’s raining (ok maybe not that last one, but you get the idea).
So back to the numbers, the true cost of credit card processing is around 1.5%, but your merchant services provider is charging you between 2.8% and 4% plus a bunch of strange fees. You’re now getting gouged and paying around double the actual cost of credit card processing so as your business continues to grow, so will the processing costs.
So what if I told you that you could get direct access to the true cost of credit card processing, not pay a markup percentage on transactions and save up to 40% off your current processing costs? Would that be worth making a switch? Of course it would (unless you don’t like saving money)! With Fattmerchant you pay a flat monthly membership fee and get access to the wholesale cost of credit card processing. No more getting taken advantage of and because it’s a fixed monthly membership fee, you actually save more as your business grows.
You Don’t Really Know Your Numbers
Another issue that seems to be pervasive in the small business world is that owners often don’t know their numbers as well as they think they do (not you of course though). Many owners are working directly in the business and they are there when each transaction comes in, so why bother looking at spreadsheets and reports? You know what you made, right? Then unexpected expenses pop up, but it’s not a big deal because you’re a mental math genius and know you’re fine. Then you check your bank account and the number looks like an area code when you thought it was going to be a whole phone number.
To quote real estate mogul Grant Cardone, “Money is a jealous lover and if you don’t pay attention to it, it will leave you.” Unfortunately, these scenarios happen all the time in small businesses, often for the reasons that we discussed earlier in this post, mainly that owners are overly-focused on the their product or service and not enough on the boring “businessy” parts of the business. Yes, math is boring and spreadsheets are headache inducing, but you’re an entrepreneur, so like we talked about earlier, that means you’re also an accountant and financial analyst.
Now for the good news, you don’t actually have to spend hours working on spreadsheets going through hundreds or even thousands of lines of transactions and expenses. When you sign up to be a Fattmerchant member, you get access to powerful proprietary business analytics tools to help you run your business more effectively. Our tools will track and store all of your transaction, customer, and revenue data as well as expenses and invoices, so that you have a clearer picture of how your business is really doing and can use these insights to take your business to the next level. Save time and get paid faster by automating your invoices or see when your busy times are so that you can staff up and have the right amount of inventory on hand or track repeat purchasers so that you can focus on your most valuable customers. These are just a few of the ways that you can supercharge your business with our technology. We don’t see our members as clients or customers, we see them as partners and we want you to succeed, which is why we developed these additional tools for you.