Money-saving Have you ever read the book “The Four Hour Workweek” by Tim Ferris. It is, without a doubt, one of my favorite business books of all times, and I recommend it to nearly everyone I talk business with. But the reason I bring it up today is that this book is creating a phenomenon of lifestyle changes across the country. People are working in offices less, and working from other areas in the world more. In fact, families are now taking year-long sabbaticals from their normal daily grinds in order to live the life of digital nomads. What does that have to do with getting paid, you may wonder. Simple. This is a trend that is growing just as fast as Atkins or the Southbeach Diet. Soon, it will be something everyone considers at least once, and possibly even tries (…including this author. Come August, I plan to take my own family on a year-long sabbatical around the world). It is a trend that you can hop on early by catering to these people before they move out of your market area. Here’s what I mean… A common mistake a lot of businesses make is not accepting every form of payment they can possibly accept. Obviously, everyone takes cash, although not everyone wants it. Money orders and checks are common in industries like the property management and rental industries, but not much else. Cash and credit card are common in the restaurant industry, but not checks or money orders. Checks, money orders and “creative financing” are used in the automotive industry, but again, it’s rare that they accept anything else. But none of these payment methods are really feasible for someone who lives on the other side of the world. These are all payment options that often require being in a location in person, or having someone sign a slip of paper. To cater to people you never physically see – like virtual bookkeepers and their clients – you need to start accepting payments in other forms. Because if you are the only person or company accepting the “other forms of payment” while your competition does not, you will dominate your industry in your area. Now think about what payment types your industry accepts. What don’t you accept for payment, and why not? An Example of Why Not Accepting “Other Forms of Payment” is Just Downright Stupid As stated previously, Property Management Companies rarely take anything but cash, checks, money orders or cashier’s checks. On the other side of the equation, are their clients – homeowners. Due to layoffs, job changes, or an upside down housing market, homeowners can easily fall behind on their payments. The fact that it may not be the “industry standard” to take a credit card is a ridiculous reason for a property management company not to get paid. If they took credit cards, homeowners can catch up quickly, and often get miles. Instead, they fall behind, and the property management has to send the account to collections or place a lien against the property. This is a long messy process that can easily be avoided, but instead encourages a homeowner to “just let the property get foreclosed on.” Then, the payment will become the next homeowner’s problem, and the property management company may have to write off a portion of the money owed to them as “bad debt.” This all could have been
avoided if the property management company just made it easy for a homeowner to pay another way – i.e., from a credit card. The truth is, the more types of payments you take, the more useful you’ll be to your customers. Now that I’ve got you thinking, here are some other types of payment you need to consider. PayPal: PayPal is quickly becoming one of the fastest, easiest, and least expensive ways to pay money for something. With it, you can instantly wire money to anyone anywhere in the world, for a small fee that the receiver pays. You can also receive credit card payments or bank debit transactions, and you would pay as little as 1.9% of the transaction if you chose to allow your customers to pay via PayPal. This is completely an Internet-based payment option, and all you would have to do is put a link on your website that allows your customer to pay you. But, there are many other benefits to accepting PayPal. For one thing, the account is free to setup, and any payments received can be transferred directly to your preset bank account. For another thing, you can get a debit card that accesses this account, and thus use PayPal as your second bank account. Honestly, there’s no real reason not to use this payment option. Credit Card: There’s a saying in Mary Kay that I’ve always found to be true. If a customer can use a credit card, they will often buy 25% more than if they had to pay cash. Why? Because a credit card can be paid back over time, and thus doesn’t feel like real money when a customer uses it. Thus, credit cards create more impulsive purchases. Yet many companies don’t accept this form of payment because they usually have to pay a fee of 4-6% of a transaction. But think about it: Would you rather spend 4 to 6% to increase your sales by 25%, or would you rather not make that money at all? In my opinion, not taking credit cards is foolish. Not only can you increase your profits instantly, but you can also expand your local market area to a global market area. Therefore, If you aren’t taking credit cards, you should be. I don’t care if your industry’s standard is not to take credit cards. Credit cards are basically “Creative Financing” for the average business. And since PayPal allows you to take credit cards and pay as little as 1.9% of the transaction, there’s no reason not to take credit cards.
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