Down to Business: Merchant Services

Merchant-Services-Product-Page-Photo

A professional on his lunch break walks down to a local eatery and enjoys a turkey club with avocado lime spread and a crisp dill pickle spear on the side. For twenty minutes out of his busy day he is calm, and he can already feel the tired 2 o’clock feeling coming on. He reaches for his credit card, swipes and in an instant his tab is settled. Let’s focus on that instant… blip… that instant when funds are transferred from consumer to merchant.

To break it down; the customer swipes his card through the terminal to pay $10.00 for his lunch. The terminal reads who the customer is and contacts the bank that issued the card. The bank at this point, must make a decision on whether or not to pay the merchant. Could the transaction be fraudulent? Are there funds available? Upon approval, the consumer’s bank sends $10.00 to the merchant’s bank, and then the bank deposits $9.80 into the merchant’s account. That $0.20 is sent back to the consumer’s bank and it is then split five times: with the issuing credit or debit card company at a predetermined rate, the issuing credit card brand (i.e. Visa, MasterCard, Discover, etc.), the processing company, then to an ISO selling the processing (if applicable), and finally, it is split for the last time if there is an independent contractor selling the processing for the ISO. We’re certainly not splitting the atom, but this is getting eerily close to nuclear fission.

At the end of each business day, all of the credits and fees are tallied by the processing company. After about 2 business days, the settlement is deposited into the merchant’s bank account. The processing fees are typically debited from the merchant’s account 3-5 days after the end of the month. Phew – that is quite the process! Why would a processing company go through all of this effort for pennies on the dollar… or sometimes fractions of a penny? Why would a business pay to have customers pay them?

Market trends and statistics provide an overwhelming answer to these questions.   According to Javelin Research, in 2011 only 27% of all in person sales were made with cash. According to the SEC in 2011 – $17,782,000,000,000.00 were spent using Visa, MasterCard, American Express, Discover and Diners Club. When you start to take small percentages of nearly 18 trillion dollars, it becomes clear just how lucrative this business can be. For the business owner, according to Ari Shapiro of NPR, consumers purchase 40% more when they shop with a credit card vs. cash. Many interesting clinical psychological studies break down the why behind this.

So what does all of this mean for our small businesses? Well, with so many entities fighting for a slice of the dollar, the competition among merchant services providers is stiff. Given the dynamic nature of the industry, loyalty, transparency and honest hardworking member service are hard to find. Perform your due diligence and interview various clients to see just what kind of service is actually provided. A few minutes now will pay dividends later!

If you’re interesting in merchant services for your business, you’re in luck! First Financial has a new processor who provides great service and excellent rates. If you would like more information on merchant services or business products and services, contact Business Development Manager, Matthew Brazinski, at 732.312.1421 or simply leave a comment below! 

*Sources: Psychology Today, Nerd Wallet, Huffington Post, and Host Merchant Services.

Down to Business: What to Consider When Writing a Business Plan

Remember writing term papers in high school or college? You had to prove a point using evidence provided by your research of the topic. In many ways, a business plan is proving the following thesis: “I can successfully operate a sustainable business.” So what research do you need to prove this idea?

  • Market Research – Who are your competitors in the area? What are their prices for comparable services? How will you differentiate your product/service from theirs?
  • Financials – Create realistic projections for the money you will make and lose over the next 3 years. Explain how you came up with these figures, and how they will figure in to the growth of your company. Also include the amount of money you, your partners, and your investors (if applicable) are contributing to the start up.
  • Biographies – Who’s who in the organization? What skills, experience, and talent does each of the business owners/partners bring to the proverbial table? Understand how each person will make the business successful.
    • What are the duties of each person employed by the company?
    • Each person should provide a personal financial statement
    • How will matters be resolved if the partners cannot agree on an issue?
  • Marketing Plan – How will your potential patrons know about your business? How much of your budget is devoted to marketing? Depending on the type of business, will you do traditional advertising, or organic word of mouth marketing?
  • The Company Itself – What product or service are you providing, and how will you be doing this? How did you originally get involved in the industry? What makes this industry a worthwhile use of your time, energy, and money?

These are only a few of the aspects to consider when creating a business plan. You can find many seminars on how to write a business plan for little to no cost at local libraries, local community colleges – particularly Brookdale Community College, and of course at First Financial Federal Credit Union. Formal templates can be found at www.SBA.gov or www.SCORE.org. Use these questions provided, along with one of their templates, to prove your thesis – you can, in fact, operate a successful business…once you have the right plan!

For more information about any of First Financial’s business accounts and services, you can contact Business Development Manager, Matthew Brazinski, at 732.312.1421 or simply leave a comment below! 

Down to Business: Has Your Mission Statement Changed?

Questions and Answers signpostAwhile back, we wrote about how an important part of starting your business is creating a mission statement identifying the proverbial “who, what, where, why, and how” of your business.

Now that your business is up and running, however, have you noticed that the snapshot vision you created for your future doesn’t align with the reality? If this sounds familiar, ask yourself the following questions:

  • Am I reaching the target audience I thought I would?
    • Perhaps you were targeting Baby Boomers and ended up servicing more Millennials instead – have you updated your vision, plan, and marketing to reflect this adjustment?
  • Who runs the business?
    • Have you added new employees to your leadership team whose decisions add value to your business?  Do you need to?
  • What is the business? What is the product?
    • Ultimately these might not have changed significantly since the launch of your business.  But should your company or product be altered to meet new demographics you did not realize you would reach?
  • Why does the business exist?
    • You started this business because you had a dream and a market to enter.  But now that you have been operating for awhile, what makes you competitive enough to stay in the marketplace?
  • How does the business operate?
    • Is it time to hire a new manager?  Are you solely an online business and would like to move to a storefront – or vice versa? Could you cut costs or do you need to develop your inventory more?

Admittedly these are a lot of questions; however, it is crucial to question your business several times per year to justify the sustainability of your company.  If you aren’t questioning it, someone else could be, as well as developing their own company that might be your direct competitor.  Questioning your mission statement that you created with the original bullet points gives you a chance to look at your business as if you were your own competitor.  The best way to maintain your mission is to stay ahead of it!

Have a question about business planning, products, or services? Contact Business Development or leave a comment below.

No Business Owner is an Island – Tips for Getting the Right Advice from the Get-Go

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Starting your own business is one of life’s most exciting and harrowing experiences.  Good planning is essential to helping you stay on course and deal with unexpected hurdles. Research is the first step in the planning process and you don’t have to go it alone.

While you should be an expert on your industry, products and services, there is no way that you could be an expert on everything that running a successful business requires, particularly the financial, legal and tax requirements.   You may waste precious resources – your time, energy and possibly money- in the long run trying to do things yourself that you are not qualified to do.

Outside experts can include bookkeepers/accountants, lawyers, web designers and business coaches.  Too often, we think we have all the answers and are the only people who can really get things done.  The reality is that we are in danger of stretching ourselves too thin, and can risk the potential success of our business by not utilizing outside expertise.  Consider hiring on a consulting basis to keep costs low until your revenues start growing.  Look to your industry for references – the ideal professionals are those who have specialized in yours.

Unless you are a numbers whiz or have a degree in accounting, it is advisable to get a professional to set up your accounting system.  Each start-up is unique but generally most start ups can begin with a bookkeeper.  The bookkeeper will help start you off with a good record keeping system, handle financial transactions, and produce financial statements.  An accountant will cost more, especially if you plan to aggressively grow.  To keep costs down, you can use an accountant for year-end tax planning; the right accountant will not only help you with tax returns, but also with longer term tax planning and networking.

Good legal advice is worth its weight in gold; bad advice can destroy your business.  A good business lawyer will provide vital assistance in almost every aspect of your business, from basic zoning compliance, copyright and trademark advice, to formal business incorporation, lawsuits and liability.

Hire a web designer who can design both your logo and website.  You want a website focused solely on your company that is easy to navigate and full of useful information.   Before the designer gets started, think about exactly what you want someone to do and how they should feel logging onto your site.

Get a coach.   Even if at first you don’t get a business coach to help you and guide you in your planning and operation, get someone who is objective and outside of your business whom you can rely on for nitty-gritty business advice and to hold you accountable for getting results.    Another set of eyes can work wonders for how you operate both for you and your business.  An outsider can also make sure you are getting the numbers you need both on the top line and the bottom line to survive.

Working with these professionals from the start will not only increase your business success factor, but also free you to thrive in doing what you do best – your business!   Remember no successful business owner is an island; plan to utilize financial, legal, technical and marketing professionals from the beginning.

Have a question about business planning, products, or services?  Contact Business Development or leave a comment below.

Disaster Recovery for Small Business

It’s a good idea for any small business to take a look at what can potentially happen & how to plan for a disaster at any time. Follow the steps below to make sure your business is prepared for any emergency.

 Start by minimizing the risks:

  • Develop a sound Disaster Recovery Plan – review and test it annually. This will help insure that systems are in place to help minimize the interruption in service that you provide to your clients and also providing valuable information to your employees that will give them both direction and peace of mind during a crisis.
  • Go out of your way to take care of employees
  • Make deposits in the bank of good will
  • Monitor industry news coverage, conditions and situations
  • Set up systems for early detection and warnings about crises
  • Identification and/or reduction of eventual risks
  • Establish good contacts with media and community
  • Conduct a vulnerability audit

When and if a crisis occurs, carefully evaluate the damage and prioritize your responses to employees, vendors, media and the community at large (or any other critical audiences).

What can we learn in terms of planning?

  • Create employee and business evacuation plans
  • Review remote office resources
  • Consider cloud-based client and project management systems
  • Make employees a first priority
  • Ensure an uninterrupted payroll
  • Establish a mobile work environment

What should we consider in regard to technology?

  • What tools are best for communicating? For example, cell vs. satellite vs. text messaging
  • Phone system: do we have voice activation, an 800 #, forwarding, online voicemail?
  • Do we have remote-access to an e-mail server?
  • What if we need to transition to a virtual office?

Some other advice:

  • Be proactive and routinely discuss, practice and implement your plans ahead of time
  • Ensure you have established clear, defined tasks and functions for everyone
  • Prepare strategic messages for every problematic, hard question imaginable
  • Be able to track and communicate with employees, clients and vendors
  • Realize planning is a best case scenario: what you least expect will happen, and most often what you think may happen may not.

Job Search Strategies Seminar Summary

job-wanted-sign-resized-600Recently we had SCORE join us for an informative and engaging seminar on job search strategies. Seminar attendees were provided with the current elements that are crucial in order to start a successful job search.

Some helpful information that was provided, included:

  • Focus on finding your strengths: Ask yourself – Who are you? What are your skills, training and work experience? How can you develop those traits into a positive image? The answers to these questions will help you define who you are when answering questions during an interview.
  • Elevator speech: Incorporating the strengths that you came up with, you need to create a 30 second speech that tells a short story about yourself. It’s great to use when you first meet someone outside the workforce – perhaps in an elevator? You can expand on your 30 second speech by another two minutes in order to answer the “Tell me a little bit about yourself” question that frequently pops up in interviews.
  • Addressing your weaknesses: A perceived weakness is the perfect time to sell yourself. This is where you need to provide the interviewer with a positive response. For example, a good response for “positive weakness” would be, “I have to work on having more patience and giving myself a break. There have been times where I take on too many tasks and then expect to have everything done at once, but I have learned to be more realistic in what can be accomplished given the time and resources available.”
  • Time management: Once you develop a plan, set aside a portion of each day to execute the plan. Don’t feel that you need to devote 12 hours plus each day job searching. A job search is always full of rejection and dashed expectations. By scheduling down time you can recuperate from these downers.
  • The “Tell-All” resume: This is the part where you sell yourself. Your resume is essentially your sales pitch to the company you’re applying to. You want to tell a story about your experience and history while keeping in mind that it needs to be concise and to the point. Employers typically only look at the first page of your resume, so putting the important information first and making sure the layout is neat and organized are going to be in your best interest.
  • The “Search”: Once you’ve decided what position you are looking for, begin to look for opportunities in that field. You can research online, in newspapers, the One Stop Center and dozens of other ways. However, networking is the most effective way to get leads and land the job you want. Just a hint, if you take the time to introduce yourself to someone in the industry you want to be in, ask for their help in a way that they will want to assist you. A great, FREE tool to use is LinkedIn, you can search for various companies, people who work in those companies and even apply to jobs – everything you need all on one site!
  • Use company and job websites: A lot of the time, companies will internally post any positions they have available on their corporate website. You can also try job websites like Indeed, Career Builder, Monster, Google, etc. Just be sure to look into the company your interested in to make sure it is not a scam.
  • Word of mouth = Networking: Make it a point to reach out to friends, neighbors and relatives to see if they have any job openings at the company they are currently employed at or if they know any contacts in the industry you’re looking to apply to. Sometimes the “It’s all about who you know” phrase is pleasantly true!

The bottom line is that you need to try harder in marketing yourself and remember there are no automatic opening doors to employment. You must make the effort to reach out and seize the handle.