A few years ago, one of my first business coaching sessions was with an entrepreneur who had spent a year and a half in development. He’d given up a well-paid job and spent about $25,000 on developing an app. He had no real business plan. When I pointed out that he had notionally invested about a quarter of million dollars years on the app, he drew a deep breath of entrepreneurial fatigue, and said dishearteningly, “Well, I suppose so.”
This back of the envelope calculation was done as follows:
Here’s a situation you might be familiar with:
You’re at a festival and you need to get lunch. After queueing up for half an hour, you get to the front of the line and start ordering food for you and your mates. The total amount comes to $57.95.
Unfortunately, you don’t have $60 worth of notes. You now have two choices: Start digging through the coins in your pockets to make the remaining 95 cents or start thinking about running to your mates to get more cash.
Usually by this point, I’m wishing the vendor would accept credit cards.
How much easier is swiping or inserting your card than wading through notes or digging through coins to pay for $57.95? Card use is certainly a welcome respite from carrying around a bulging wallet full of coins (first world problems I know!).
But it is frustrating and I bet you offload your coins at every opportunity. For example, paying $10.55 for a sale worth $9.55 (using a $10 note and additional coins) to get rid of as many of the pesky 5, 10, 20 and 50 cent pieces as possible. The speed and convenience of card payments today make for an easier and more desirable experience.
Reasons you are losing sales
If your business is still not taking card payments, consider these stats:
64% of people prefer to pay by card (TNS Omnibus March 2014)
Yet, 61% of small and medium businesses don’t accept credit cards (MYOB Business Monitor)
10% of businesses have lost customers because they don’t take credit cards (MYOB Business Monitor)
More than 1 in 2 people walk away from a sale or service each year because they can't pay by card (TNS Omnibus)
Each year, 8.88 million people walk away from a sale or service because they can't pay by card (TNS Omnibus)
Every month, 5.13 million people walk away from a sale or service because they can't pay by card. (TNS Omnibus)
According to data released by the Reserve Bank of Australia, ATM cash withdrawals are decreasing every year. The increase in popularity and preference for card payments mean that consumers are less likely to carry cash.
First and foremost, taking card payment on the spot means you get paid faster which improves your cash flow as you don’t have to wait 7, 14 or even 30 days to get paid. You save valuable time on paperwork such as raising invoices as well as the hassle of chasing late payments.
Moreover, the MYOB Business Monitor shows that 37% of businesses sending invoices say over one quarter of their customers pay late. And 15% of businesses sending invoices spend more than five hours a month chasing payments. Interestingly, only 1% of people say internet transfer is their preferred payment method which means providing a card payment option is critical when customers don’t want to pay by cash.
It’s very important to understand consumer behaviour if you want to stay relevant and ahead in business. We’re moving towards a cashless society. As cash payment continues to decline, you need to ask yourself: Am I giving my customers all the necessary means possible to pay my business?
Embrace the shift to a cashless society and enjoy the business benefits of providing card payments with MYOB PayDirect.
When it comes to growing your business, you are often reliant on the expertise of others who have been there and done that (or promote that they have), and you may miss their hidden agenda.
In 2006, I was getting my financial planning business off the ground and felt the time was right to find new clients. I chose to run a direct media campaign with a distribution of flyers to attract local interest as it seemed a simple and low cost option.
To help with the flyer layout, I spoke to a local graphic designer who I later found out was on a commission from the printer and distributor. The designer said the one thing they had learned from other campaigns with mostly product-orientated clients was that you needed to ‘go big’ in terms of numbers to ensure you get adequate response and to always promote a free offer to engage interest.
Are you spending endless hours every day chasing people who owe you money? It's not a pleasant job. Well, I’m going to show you in three easy steps on how to get your debtor days down to a single digit — or have no debtors at all. If you implement the following three steps in this order, then your days of chasing people for money are over.
From today, millions of Australians will be ditching the pen for credit card payments at point-of-sale. Instead, we will be punching in PINs to authorise transactions with the PINwise initiative taking effect today.
The initiative was launched by the Industry Security Initiative, a group composed of Australia’s major financial institutions and card schemes to expand PIN at point-of-sale and phase out signature as a form of verification.
It’s simple, I was told. You just buy one of the LinkedIn Premium subscriptions like Recruiter Lite or Recruiter Corporate or the Business Executive option for non-HR people, and away you go. You can contact any prospective employee, review their profile and start the conversation. Easy solution — not!
As a working mother, I often struggle with how much pocket money I should give my kids. It’s a conundrum. I want to raise financially savvy children who know that immediate gratification is not everything and that saving for a rainy day is important. So encouraging them to manage money from an early age is a good thing. Yet, the jobs we do around the house are about all of us pitching in as a family. I don’t want to pay them for just doing daily chores.
In the second instalment of ‘The Savvy Accountant’, host Jim Stewart chats with MYOB Senior Product Manager Bruce Polderman about his past life as product manager of – among other things – Google+, Blogger and Google Maps.
Bruce has plenty of insights about the importance of keeping your business up to date with Google products. After all, the majority of your clients and prospective customers are using Google as the first port of call to find out more about you and your competitors.
Executives in the higher echelons of the business world know that discipline and paying attention to detail are extremely important qualities to have if one wants to succeed, but do these characteristics apply equally to startups and entrepreneurs?
In the cut-throat world of small business, the importance of detail and discipline rings true now more than ever. These guidelines will help you to survive and thrive no matter what challenges you face this year in your business.
A chance to be the Chief Executive Officer (CEO) of a startup company can be one of the most exciting, challenging, inspiring, risky and adrenalin-filled periods of your life. Particularly for young innovators and entrepreneurs, the dynamic and fast paced environment can leave little time to reflect on your own tax position or obligations to any new employees.
A lot of great startups come undone by neglecting the mundane — but essential — regulatory or compliance functions. So while I would love to write an inspiring story of innovation and success, I am going to make you think a little about taxes instead. Why? Because you are the CEO …