by Brendon Degner | Jun 16, 2022 | Education, Merchant Services
Before you decide to go with one merchant services provider or another, it is important to have an honest and thorough discussion. The right fit is crucial in helping your business save time, money, and stress in the long run. Asking the right questions is a great place to start, and a good merchant services provider should have no reservations addressing any of these concerns.
1. What Do You Do?
As a business owner, you’ve probably been told that you need merchant services. But that doesn’t tell you much about what, exactly, a merchant services provider does. Ask your potential provider for specifics about what services they offer and how it will benefit your business.
In a nutshell, a merchant account enables a business to accept payments by credit or debit card. Card data is handled by a payment processor and transferred securely to the business bank account, where it is received as funds. Beyond this, your merchant services provider should be willing and able to answer all your questions about the specifics of payment processing, including security, data storage, fees, and more.
2. What Security Steps Do You Take?
Security is of the utmost importance when processing credit card data, which can be subject to all manner of fraud. Ask your merchant services candidate to explain any and all security measures they take to prevent data breaches.
Your merchant services provider should also be willing to help you work toward PCI compliance. This is a set of twelve security requirements developed by the Payment Card Industry Security Standards Council. PCI certification can take time, but it will help you avoid additional fees for non-compliance.
3. What is My Contract, Exactly?
There is no reason why your merchant services provider should want to hide anything from you within your contract. He or she should disclose all fees and thoroughly review the contract terms with you. Watch out for shady clauses like low introductory rates that will double or triple after a trial period. Ask about locking in your rate and if you are eligible for any discounts.
A good merchant services provider should want to help your business succeed so you can have a long-term relationship. Hidden fees, unreasonable contract lengths, and too-good-to-be-true intro offers are red flags that you will want to watch out for.
4. What Happens if I Have a Problem?
The best merchant services providers will be communicative. If you have an issue, your provider should have a way for you to discuss it with a live person and in a reasonable amount of time. Generic customer service lines or chat bots that have you on hold for thirty minutes at a time are no good in an emergency. Ask your provider to be candid about their customer service protocols.
You can get a good idea of how well your potential provider handles customer service through their online reviews. Check for key words like “responsive” and “above and beyond.” This is a solid indication of their attitude towards helping established clients.
5. How Long Will it Take to Get Set Up?
The time it takes for your merchant account to be approved will ultimately depend on your type of business and your financial standing, including credit score and any prior issues with merchant services. That being said, the process generally takes anywhere from a few days to a few weeks. If it is taking any longer than that, you may want to try a different provider with more experience in your type of business.
If your business is considered high risk, for example, you will want to be sure you are working with a merchant services provider who has experience in getting approval for these types of businesses. Otherwise, you run the risk of your merchant account being denied and having to restart the process.
Help Choosing a Merchant Services Provider
Selecting the right provider is essential in helping your business grow. With so many companies to choose from, this can be a daunting and time-consuming task. A merchant services broker is a great place to start to help you filter out the best candidates for your business. Brokers have relationships with many different providers and can help find the best match for your needs.
If you are a business in need of merchant services, contact Brendon Degner at Summit Payments. Brendon is highly knowledgeable about industry requirements, trends, and common security issues. Call our office today to get started.
by Brendon Degner | Apr 13, 2022 | Education, small business
Knowing how to prevent cyber attacks is a crucial step for long-term success in your business. Small businesses are particularly vulnerable, as cyber criminals may perceive them as having fewer security resources.
As attacks become more and more sophisticated, many business owners find themselves overwhelmed with how to avoid becoming a target. Luckily, there are a few simple measures that remain highly effective and should form the basis of your cybersecurity resources. Regularly implementing these steps will help avoid potentially damaging cyber intrusion.
Top 6 cybersecurity tips
1. Use Strong Passwords
This may seem obvious, but utilizing strong passwords to access data is one of the most important steps in good cybersecurity. As a business owner, you have a lot of information you need to keep track of; it may be tempting to use the same two passwords for everything, but this poses a significant risk.
Use different passwords for each and every point of entry. This does not mean simply adding an exclamation point or a dollar sign to another password. In the event that a cyber criminal is able to discern one password, don’t make it easy on them by using the same or similar passwords for everything else.
2. Use Multi-Factor Identification
Whenever possible, use at least a two-factor identification process. This process effectively involves more than one way to prove you deserve access to certain data. In addition to the initial password, for example, you could require that someone enter a code sent to an authorized email address. Some businesses might even implement biometric authentication tools, such as fingerprint scans or facial recognition.
3. Use a Firewall
The concept of a firewall is not new to cybersecurity, and for good reason. It is a highly effective way to block undesired data from infiltrating your network. A firewall allows you to create a set of security requirements that must be met before any outside data is permitted. Information coming from suspicious or unsecure websites, for example, will be blocked and flagged.
A firewall can exist as software or hardware, though it is generally recommended you use both. A software firewall is installed directly on your device and monitors traffic through port numbers and applications. A hardware firewall is a physical piece of machinery that forms a barrier between your network and your gateway address.
4. Update Your Software
Again, it may be tempting to postpone software updates. But these updates often address new security concerns, and skipping them can leave you vulnerable. Make sure you and your employees are routinely updating software, even when it is unprompted. This will protect you from new viruses that can affect both the operating system and third party software.
5. Make Back-Ups
A particularly nasty form of cyber terrorism involves something called “ransomware.” As the name suggests, this type of virus locks you out of your files and data and holds them hostage until you pay a ransom to retrieve them. Even if you pay the ransom, you cannot be sure your data will be returned or that the attacker won’t come back.
The best way to avoid being a victim of ransomware is to make back ups. Back ups are copies of your data that are stored on the hard drive or an external storage device, such as a flash drive. Make regular backups of anything and everything you need to operate your business. In the event you are targeted by ransomware, your attacker will have nothing to bargain with.
6. Train Your Staff
All the firewalls, backups, and passwords in the world won’t make any difference if your employees are not properly trained to recognize cyber threats. Hold regular training sessions that focus on the latest scams and how to avoid them.
Employees should be advised to never open emails from unknown addresses and verify all sources before downloading anything. If possible, it is a good idea to hire an outside agent to provide professional instruction on cybersecurity.
Stay On Top of Cyber Security Threats
Credit card and bank data are primary targets for scammers. Your first point of contact for preventing a data breach should be your merchant services provider. He or she will be well-versed in the most effective cybersecurity measures as well as the latest trends for illegally obtaining data.
If you need assistance in finding a quality merchant services provider, contact Summit Payments. We will help you find the provider that best meets your specific budget, business, and security needs.
by Brendon Degner | Apr 1, 2022 | Education, small business
Steps to Cut Overhead as a Small Business
Running a business can be expensive: from rent to business cards to mileage, costs quickly add up. It can be useful for small businesses, in particular, to know where you can effectively reduce overhead costs without compromising efficiency or quality.
Overhead vs Operating Costs
There are two main kinds of spending associated with running a business: operating costs and overhead costs. Understanding the difference between them is a great place to start when you are looking to reduce business expenditures.
What Are Operating Costs?
Operating costs are ongoing expenses related to the actual manufacture and sale of your product on a day-to-day basis.
Common operating costs might include:
- Packaging
- Special Equipment
- Payroll
- Ingredients/inventory
Operating costs are generally considered essential to the business. While you can look for ways to reduce the cost of operation, you run certain risks. For example, you could reduce payroll expenses by eliminating certain employee positions. But this cut back in personnel could ultimately impact efficiency and productivity.
You could also attempt to save costs by switching to a different vendor for certain ingredients. However, you may lose established customers who like your product exactly the way it is.
What Are Overhead Costs?
Overhead costs are those related to the actual running of the business outside of labor, materials, and production.
Many overhead costs are considered “fixed” expenses, since they will continue regardless of whether or not the business is turning a profit. Certain expenses, such as utilities, will vary depending on the scale of the business.
Common overhead costs might include:
- Rent
- Utilities (electricity, internet, water, gas, etc.)
- Transportation
- Marketing
- Merchant services
- Insurance
- Administrative salaries (accounting, management staff, etc.)
Unlike operational costs which are more difficult to minimize, overhead costs should be reviewed regularly to see where cutbacks might be made. Switching to a better contractor with lower rates is almost guaranteed to have a positive effect on your profits.
How To Determine Overhead Percentage
Calculating your overhead percentage will help you decide if and when you need to find ways to reduce costs. While the exact percentage of revenue you are spending on overhead costs will vary depending on your personal business, most experts recommend you do not exceed 35%. To determine your overhead percentage, divide your monthly overhead costs by your monthly sales. Then, multiply by 100 to obtain the percentage.
(Monthly Overhead/Monthly Sales) x 100 = Overhead Percentage
In general, the lower your overhead percentage, the better. If it seems ridiculously low, however, you may be compromising too much. If you find your percentage is too high and digging into your profits, consider the following easy ways to reduce your overhead:
1. Downsize/Eliminate Office Space
One of the biggest overhead costs associated with running a business is rent. These days, many of us are still working entirely from home or utilizing a hybrid model. Ask yourself:
Do I even need an office?
Remote work has been shown to be just as effective as in-office work, if not more so. During COVID lockdowns, employees reported greater morale and productivity levels. This may or may not be related to the ability to work in comfortable clothing and avoid being in traffic for three hours every day.
If I do need an office, does it need to be this big and/or fancy?
How much space do you really need for the office to be efficient? Do you need an office with a private bathroom or a ritzy view of the city? Do enough people visit to warrant a waiting area?
Does my office have to be in this part of town
In Denver, rent can vary wildly depending on the district. Consider moving your office to an area where rents are not as high.
2. Hire an Accountant
While it may seem counterintuitive to hire another employee when you are looking to cut costs, an accountant is a worthwhile investment. A good CPA will help you avoid mistakes and will be knowledgeable about tax breaks and deductions that could save you thousands of dollars.
3. Review Merchant Services
These days, nearly every business requires a way to accept credit card payments. The ability to process credit and debit transactions is known as “merchant services.” Electronic payments are facilitated via a merchant account, which is essentially a bank account that allows businesses to accept credit and debit payments.
However, not all merchant services companies are created equal. Rates can vary significantly from merchant to merchant (by more than 2 percentage points!). Furthermore, many companies charge questionable fees that go unnoticed by clients. These fees can add up to thousands of dollars over time!
Like an accountant, hiring a good merchant services broker is a wise investment. He or she can help you find a company with fair rates and eliminate unnecessary fees.
4. Outsource
Outsourcing can be a great way to scale back on costs by filling employee gaps without committing to full-time pay. It is particularly useful when you only need freelance work, such as digital marketing or graphic design. In the event you no longer need their services, you can simply pause or cancel your contract.
5. Save Energy
Implementing energy-saving appliances, light bulbs, outlets, and windows can be another great investment that will cut costs for utilities long-term and give a friendly nod to the environment. You can also encourage customers and employees to go paperless, ultimately saving a lot on ink, paper, postage, and printing/copying equipment.
Locating a Merchant Services Broker
Next time you review overhead costs, be sure to review your merchant services provider. This is a common expense that is often bloated with unnecessary processing fees. Brendon Degner has years of experience helping clients find quality merchant services at fair prices. Contact Summit Payments today to schedule your consultation.
Recent Comments