How to Improve Cash Flow and Help Your Small Business Bloom
While consumers are increasingly demanding more convenient payment methods-echecks, email invoicing, and online payments-small businesses are still slow to adopt. Here's a look at one small business owner who sought an e-payment solution to improve his customers' experience, and ended up improving his cash flow.
It’s not far-fetched or even a stretch to say that the “traditional” way of making payments—writing out a check, mailing in a payment, or even paying with cash—is diminishing. There’s more than enough statistical information to lend support to this point: From 2003 to 2006, electronic payments increased 12.4 percent per year;* the 2007 Consumer Bill Payment Study revealed households with Internet connections paid more bills online (39%) than with paper checks (34%); and last year, the Federal Reserve announced that it would cut its check processing centers down to four by 2011, which have already decreased from 45 since 2003.
Nearly every major service company offers electronic statements, online bill-pay, recurring billing, email invoicing, or some variation of these services. Currently, over half of all U.S. household pay at least one of their monthly bills using electronic bill-pay.** And to no surprise, after experiencing the convenience, consumers are beginning to demand these types of flexible payment options from all of their service providers, small or large.
So where does that leave small businesses? Does this data imply that the “Mom and Pop” stores, home businesses, and startups can’t survive without some expensive technological marvel of an electronic payment processing suite? Not at all. Read on to learn how one small business owner found a solution that not only made his customers happy, but actually made his business more liquid.
Nick Perez and his team at MultiFlor have dedicated themselves to creating artistic and professional floral decorations for events of all types. Known for being a full service decoration company, they also offer lighting, props, and fabrics to give any event a one-of-a-kind touch. Their creativity and originality leaves their customers dazzled by trend setting arrangements at competitive prices. After 13 years in business, MultiFlor has established a reputation for creating an excellent customer experience while providing fresh and unique floral designs. And, it is this reputation that has led them to become one of the top event companies serving the Washington, DC metro area.
However, despite receiving praise and compliments for creating an excellent customer experience, Nick Perez, owner of MultiFlor, realized there was still more he could offer his customers to make their experience even more seamless. By listening to his customers’ requests and offering simple online payment options, the result would be an even better customer experience and stronger company loyalty.
After testing multiple systems, Perez decided on a web-based payment processing application, PaySimple, which provides merchant accounts to accept credit card and ACH direct-debit payments from a securely hosted, customizable web payment form. This simple, robust interface allowed Perez to customize fields, along with adding company logos and colors. Perez had no problem setting everything up without the help of an in-house IT specialist. “Anyone who uses a computer can easily handle this,” Perez commented.
In addition to receiving payments, Perez was able to send out electronic invoices. Electronic invoicing, or email invoicing, turned out to be a seamless, win-win situation for a small business like MultiFlor and its customers. For example, a customer can receive an email invoice with a payment button linking them directly to the payment log-in screen. From there, they could review their invoice information, pay their bill, and receive an email receipt.
Nick Perez was able to find a complete and customer-centric solution which not only made electronic payments easy for his customers, but also cut what he was previously paying on credit card rates in half. This outcome is not uncommon, though. According to NACHA – The Electronic Payment Association – electronic payment processing saves small businesses 11.5 cents per transaction, on average. “The overall benefit from working with PaySimple is we became more liquid – very helpful to us as a small business,” Perez added.
Although small businesses like Multiflor are garnering the benefits of electronic payment solutions, which provide small businesses the technological efficiencies to better compete with large companies, many SMBs are still slow to adopt them. A recent small business survey performed by Market Platform Dynamics revealed that of the over five hundred small businesses surveyed, almost half do not utilize an electronic payment solution. Of those, 30 percent cited concerns of complexity, cost, and security as reasons for non-adoption. And, even in the face of the changing payments landscape, 63 percent of all the respondents do not believe there will be any change in their mix of payments received over the next two years.
Perhaps it takes examples like Nick Perez’s flower shop for small business owners to see that electronic payments aren’t difficult, scary, or expensive; they’re just the opposite. They simplify accounts receivable, lower costs, increase security—and they’re an eventuality. As Perez can attest to, what your customers are asking for and you might wearily begin implementing, can provide business benefits and savings that you might not have imagined possible.
See more small businesses who’ve improved their business with electronic payments
If you would like to know more about MultiFlor, go to www.nicksflowers.com for customer testimonials, pricing, pictures, and contact information.
*2007 Federal Reserve Payments Study
**electronicpayments.org
