So you’ve got a new, ground-breaking idea: maybe it’s the next Facebook, Air BnB, Uber, or Groupon. All of these businesses have one major thing in common: they all need to accept credit card payments from their users. There are many different payment processors that do not accept startup companies as clients, due to the high failure rate in this sector; Pinpoint Payments understands the up-hill battle associated with starting a new business and provides merchant processing services for many startup companies. There are a few questions that every startup should ask themselves: what will be your preferred method of payment? Do you plan on running an online-only business, a brick-and-mortar, or both? What are you looking for in a payment processor?
Credit card processing solutions for your startup doesn’t have to be a problematic step in your entrepreneurial journey. In this article, we’ll be covering the world of startups, the problems they face, and a few interesting facts involving new businesses.
The World of Startups
Building a successful, scalable, and profitable business model is no easy task. One of the first questions that new business owners and entrepreneurs ask themselves is: “what is a common problem that needs solving? What do people need that isn’t currently available in the marketplace?” Finding the right product or service for your business can be challenging, but once you have a golden idea, execution becomes the main factor.
While many say that 80-90% of startups fail within the first year, the reality of the situation is that those numbers aren’t quite accurate. For instance, the Bureau of Labor Statistics has numbers that indicate 50% of businesses survive five years or longer, with roughly 33% surviving a decade or more. Another study – from Harvard Business School – states that three-quarters of venture-capitalist-backed startups eventually failed. While these numbers are not as grim as the 9/10 failure rate that people love to throw around, these numbers are still the main reason why credit card processors are unwilling to do business with startups. Startups are seen as “high-risk” businesses, which can put a strain on the processors’ bottom-line. If you want to be part of the minority of startup businesses that succeed, follow a few of these tips:
Tips for Startups
Starting a business is one of the most difficult, yet rewarding things you can accomplish in this society. If you ask a random person off the street if they want to own their own business, the majority of them will say yes… however, the majority of people do not want to put the work in. Here are a few tips that successful startups have followed.
1. Learn How to Pivot
If you’ve read anything about startups, I’m sure you’ve heard of the term “pivot”. A pivot is a shift in business strategy that occurs when a business receives indirect/direct feedback on their business model, their product, or the changing face of their industry. Pivoting correctly makes a business owner/team question their design choices, their business and marketing tactics, and even the design of the initial idea itself.
2. Know the Market
Even if you think that the stock market doesn’t apply to your particular business, it does. Adjust to the market, as it tends to tell a lot about consumer behavior. Ignorance is not bliss when it comes to business. On a related note, how much do you know about your own business? The number of customers, the amount of gross revenue, total operating costs, and projected income should all be numbers you can reference effectively.
3. Know Your Customers
Who is your demographic, specifically? Can you effectively visualize who is looking to buy your product? It is crucial to know your target audience, what they are after, what their spending habits are, and what they look for in a particular product or business. Remember, your business does not exist without the consumer; getting to know individual customers and the reality of the marketplace can help you avoid tunnel vision in the narrow world of startups. Some people’s dreams are not rooted in the reality of the situation, so taking the time to assess who is really buying your product can go a very long way.
4. Have a Flexible Mindset
What old ways of thinking do you find yourself falling into? Do you think being ‘busy’ is a sign of a successful person? Being productive and busy are two very different things; take the time to analyze and evaluate what your business is doing right and what it is doing wrong. Many businesses hire a personal consultant or coach to evaluate their practices in an objective manner. Taking criticism, being flexible enough to change your methods and mindset, and taking risks are all things that successful business owners do on a consistent basis. Remember, change is the only constant.
5. Create Buzz
Are people talking about your company? Are you active on social media, replying to comments, and interacting with your consumer base? You should be encouraging people to leave positive reviews in one way or another. If your company is lacking Google reviews, try giving your customers an incentive to leave reviews, such as a discount on a product or a service.
If people are talking about your company, what are they saying? Successful startups listen to their customers and adjust – or pivot – accordingly. In the early days of your business, focus on the quality of your customers and not necessarily the quantity. The number of customers will grow through word of mouth and positive reviews if the business is exceptional.
There are many other things to take into account, such as PPC, search engine optimization, and advertising costs. You often get what you put into a business, and creating buzz and visibility through advertising, AdWords, social media, and SEO shouldn’t be overlooked.
6. Constantly Improve
Have you changed your original business model or idea? What you have you implemented in response to customer reviews and/or feedback? Have you upgraded your online infrastructure, your physical production means, and your customer service methods? The market is constantly evolving and growing and your business should be doing the same!
If you feel like the business is stagnating due to negligence or lack of momentum, it may be time for a radical change. Remember when we talked about pivots? Think outside the box and do something that none of your competitors are doing or offering (or do it better).
7. Balance Work and Life
It is easy to get caught up in your business and take it too seriously, especially if you’ve invested a large amount of your personal savings and time. 100-hour workweeks will come back to bite you in the long run, so make sure you are finding the time to practice some humor and fun in your position when you’re on the job.
For the sake of your employees, yourself, your friends, and your family, make sure you are taking enough time to decompress and relax after an intense workweek. Although it is tempting to work every hour of every day, emotional and physical burnout is a real thing that should be avoided at all costs.
Remember, a successful entrepreneurial venture isn’t about an end destination, it is about the journey of building a sizeable and sustainable business. Consider your decisions carefully and really understand how the workload may be affecting yourself, your family, and your employees. While it may be tempting to burn the midnight oil, it is also important to be stable and maintainable. Plus, no one is going to like a stressed out, tired, and irritable leader.
8. Hire the Right People
Does your business have a high turnover rate? Even though startups can be volatile in nature with young employees constantly making career changes and finding other opportunities, you should still be able to retain employees (and hopefully some of the original team). If your turnover rate is high, ask yourself a few questions: do you offer employees growth, benefits, and proper incentives? Is the management in disarray? Are the job descriptions and duties confusing and unclear?
Hire people that understand the volatility and possibilities of startups. Look for happy, driven, and motivated individuals who are not anti-social. A fair to middling grasp of human psychology helps when hiring new employees; try not to hire people who are in it just for the paycheck. Hire people who are looking to grow with the company and learn new skills.
Merchant Processing Services for Startup Companies
There are many different variables to consider when starting your own business. Learning how to pivot, how to balance your life and work, how to generate buzz and how to improve your business are just a few of the things that any successful entrepreneur needs to practice. While all this can be slightly overwhelming, selecting the right payment processor for your startup doesn’t have to be.
Pinpoint Payments has worked with a number of startup companies that needed a secure, safe, and reliable credit card processing service. We understand the risky world of startups; startups represent more volatility than an established company, which can deter many merchant processors from working with these entities. Pinpoint Payments was once a startup, which is why we are happy to help fellow entrepreneurs build the business of their dreams.
We offer chargeback management, fraud prevention, simply check-outs, modern POS systems, unparalleled financial security, and card-not-present transactions for startups and other high risk businesses. If you are looking for a secure online payments processing solution, contact Pinpoint Payments today at 1 (888) 325-7640.