Small Business Competitive Advantage

Why do so many small businesses fail within the first year of business?  There are many reasons a small business will fail before being able to make a profit.  Some of the reasons could range from lack of necessary money to operate, to lack of critical knowledge needed to be competitive.  Whether large or small, a business cannot sustain itself if it's not profitable.

One major reason small business fail is the inability to compete with or better yet, out perform the competition.  What are some of the ways a small business can be competitive?  One way a small business can be competitive is to know all you can about your type of business, and continue to learn about new trends related your product or service.

What should a small business look for?  The business must take inventory of how potential customers respond to new technology, and how the customers’ buying patterns have changed over the years.  So how does a small business adapt to those changes?  To be more competitive and perform at a higher level, it is mandatory that a small business stay abreast with new technological trends in the industry that can help your business. 

Many of us have heard the old saying that “cash is king,” however in today’s world that can be viewed as dinosaur thinking.  With all of the new technology available today, it is easy and convenient to accept credit cards, allowing your business to be more competitive.  Since most people don’t carry cash anymore, “credit cards are becoming the new king.”  Credit cards are accepted everywhere from fast food restaurants to vending machines, and there is no reason to carry cash. 

Is Cash King?

According to a number of recent surveys, many businesses are failing today because many of them do not accept credits cards.  What are some of the reasons these businesses give for not accepting credit cards?  One of the main reasons given is it’s to expensive to get setup and the fees are too extreme for a lot of small businesses, especially solo ventures.

Well, you might want to get that kind of thinking out of your head, because it’s no longer true.  With the latest technology, expense is no longer a deciding issue.  How can a small business justify the cost of accepting credit cards and still be profitable?  Think of it this way: how many customers can you afford to lose to your competition?  I would guess that the answer is probably not many. 

What do you think would happen if two identical businesses were side-by-side and one accepted credit cards and the other did not?  One business had a sign on the door that said “Cash Only,” and the other business displayed the “Credit Card Logos.”  Which business do you think most people would enter?  You are right, the one that accepts credit cards.

Many options are available from the desktop unit that you see in many storefronts to the portable units that can be used with your smartphone or tablet for people constantly on-the-go.  There are many occasions where one might use the smartphone or tablet to accept credit cards. 

Just to mention a few occasions you might accept credit cards on-the-go could include individuals that make sales while attending conventions, and other business such as contractors that are out in the field such as electricians and or any type of independent contractor.  A one person business that operates in-house and/or on-the-go such as a beauty salon operator is a good candidate to accept credit cards from their smartphone or tablet.

Small Business Credit Card Processing

One of the main reason I like the smartphone or tablet option is it can be used in-house at storefront locations in addition to being used on-the-go.  This method is very affordable and it gives a business a way to test drive accepting credit cards with little or no upfront investment.  The only investment you might have is your smartphone or tablet which many of you already have.    

However, if and when you decide to accept credit cards, you will need to choose your credit card service provider carefully.  For instance, how important is a BBB rating to you?  You probably have heard the saying that you never really know what you have purchased until you have a problem.  The quality of the service is not the same for all credit card service providers.  In addition, a few of the providers offer live telephone support 24/7, and some of the providers offer no support at all, or maybe email support.  But when you have a problem, you want service right then, not next week.

Another factor to consider is the amount of time it takes for your funds to transfer.  How soon your money is made available to your bank will vary considerably from provider to provider.  Some providers have a pay-as-you-go option, where you only incur a fee when you swipe a card.  Some providers also offer the credit card reader free.  It’s important to get a good fit at a competitive rate.  There is no one size fit all.

Recent studies have also shown that credit card buyers normally make more impulse purchases.  When compared to cash buyers, the amount of the transaction for credit card buyers is larger.  In today’s society, it’s impossible to operate your business competitively using trends and patterns that worked years ago.  To stay competitive it’s probably a good idea to embrace the new technology available in today’s marketplace. 

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