"Cash is king" goes the saying when it comes to business practices. While it still holds true that maintaining a steady cash flow is extremely important for the health of your small business, the value of that expression may be changing for your customers.
The King Dethroned
In a study for the Bank of Canada, Ben Fung, Kim P. Huynh and Gerald Stuber examined trends in the market share and value of retail transactions in Canada from 2009 to 2013. They found that while a gradual shift away from cash toward electronic means of payment has continued, the cash share of the value of retail purchases was, however, virtually unchanged over the period in question.
Paper or Plastic? A Question of Convenience
Where are cash-users going and why? In particular, the BoC study noted that the credit card share of retail purchases has continued to rise, at the expense of both cash and debit cards. Consumers appear to be getting used to spending more with credit even as household debt becomes a more significant issue nationally with each passing day.
The study links this trend to the emergence of mobile payment technologies (Such as Square and Apple Pay) the likes of which we've discussed before on this very blog. Cash is still mainly used for small-value transactions, but its share for such transactions is decreasing as "tap-to-pay" technologies evolve to increase the speed and convenience of user transactions.
The Effect on Small Businesses
What does it mean for your business if more and more customers will be expected to pay with credit? As the study notes, lightweight credit-based point of sale systems are more cost-effective than conventional payment terminals for smaller retailers and for merchants that do not have a fixed location. However, an increased proportion of credit purchases means that your business gets hit harder by the fees associated with credit processing. As we've previously examined here at the Merchant Blog, the Government of Canada has taken certain steps to limit and reduce the fees that merchants must pay to process credit payments - however, these fees still present an obstacle (rather ironically) to small business cash flow.
Businesses will need to balance the appeal to convenience of credit card payments with the more financially stable options of cash and debit.
We're happy to welcome a contribution from the the bright and talented wordsmiths at Canadian online lifestyle magazine Vitamin Daily to the pages of the Merchant Advance Blog today. Check them out for a daily dose of all things fashionable, beautiful, sociable, original, delicious, and local!
As an entrepreneur, you are likely likely always looking for tips on how to find new customers, drive web traffic, improve your product and stay ahead of the curve. To gain some new insights on highlighting the unique qualities of your small business’ brand and creating a distinct voice through digital strategy, Vitamin Daily attended Social Media Camp 2015 in Victoria last month and collected our top takeaways to share. Hit the Read More link below to find out what we learned! (more…)
Though the Merchant Advance team generally strives not to be overly political - least of all here on the blog - we can't help but take notice of leaders with an appreciation for the small business marketplace and its valuable role as a binding agent for the economic and social fabric of nations.
It was a welcome development when none other than 2016 American Presidential candidate Hillary Clinton stepped up to the plate in recent days to proclaim her affinity for small businesses. "I want to be the small business President," she said yesterday at a town-hall gathering in a New Hampshire craft brewery. She has recently spoken at breweries, bike shops, ice cream parlours and other American small businesses, even turning over the keys to her own Twitter account to New Hampshire entrepreneur Mary Jo Brown for 24 hours last week, in a display of social-media outreach and common-people campaign savvy.
Clinton has even taken to LinkedIn in recent days (amassing close to forty thousand followers) to publish a four-pronged strategy for American small business development. The full text of Clinton's policy statement can be read at this link.Its four key tenets are reduction of regulatory red tape, improvements to taxation policies for small business owners, opening access to new (and especially e-commerce) markets, and perhaps most intriguingly for this blog, improving facilities for small business access to capital.
To be honest, some of these polices (and the campaign moves that accompany them) rank on the fairly innocuous side. As a campaign strategy, showing support for small business is unlikely to cause Hillary Clinton much, if any, opposition or controversy. However, her message is still resonant. By highlighting the importance of access to capital for small business owners - as well as engaging with those owners in digital and social spaces that stress the importance of personal connection - Clinton shows her understanding of the particular needs of a new generation of entrepreneurs whose paths to stability and success are increasingly becoming more diverse.
Small businesses needn't adhere too closely to the size descriptor that loosely defines them. Any business with a defined customer base or a successful product will eventually feel the need to reach out and expand! This process can be complex, but rewarding - and there are many different directions in which a small business can grow. No matter how you decide to go about it, access to capital is a critical factor in the assessment of any decision to expand or diversify. If your small business needs help finding the financial resources to support new growth, Merchant Advance can help.
Introducing Something New
Is it time for your business to introduce a new product or service into the existing marketplace? Allotting the right resources to research and development will be a key goal. Effective market research should help your business build a picture of customers' needs and desires, their location, and the habits that might influence the success or failure of a newly designed product. Businesses should focus available resources on the creation and distribution of effective surveys, questionnaires, online polls, focus groups or other generators of feedback and data.
Finding the Right People
Small businesses can be significantly influenced by the strengths of the teams that contribute to their success every day. In fact, in a recent survey, team composition was cited as one of the key factors for determining small business success. Hiring additional employees, or searching for the right candidates to make your business more efficient, profitable, safe and customer-friendly can be considered a form of expansion. Go into the process with the right resources so as not to create a drain on your cash flow during periods of training or transition.
Expanding Your Reach
Can your business benefit from physical expansion or movement to a new location in order to reach new customers? This type of transition can be particularly challenging from a logistical perspective, and especially dependent on having the proper funding in place to ensure a smooth start for your expansion and a minimum of disruption to your existing one. You may also consider the value of expanding your existing sales channels or moving market into the digital or e-commerce space: an investment in growth that, while less tangible than a new location, opens up your business to customer interest across the vastness of the internet.
Upgrading Your Core
Certain tools, machinery, technology and infrastructure are central to the operational success of many small businesses. Short-term funding can provide the financial impetus needed to update these critical components, bringing your business up to speed with the latest trends in your industry or field of choice.
These are just some of the ways that merchant advance funding can help spark growth and expansion in small businesses of all types. We are proud to be able to help Canadian small business owners find the financial resources they need when it's time to reach higher, stimulate business growth and achieve even greater things.
Have you ever needed a quick, concise instruction that helped you perform some sort of specific task - changing a bike tire, fixing a lost internet connection, or tying a clove hitch?
According to recently released Google data, it’s increasingly likely that in order to solve everyday problems like these, you’ll reach for a mobile device and search for a “how-to” on Youtube. So likely, in fact, that 91% of smartphone users are likely turn to their device for ideas while completing a task. For those of you curious, the top three educational searches in the past decade have been “how to kiss”, “how to tie a tie” and “how to draw.” Clearly, humanity has its priorities in order.
It Started With A Crash
An unfortunate thing happened to me this week: I crashed and shredded my favourite bike kit full of holes. I was fairly distraught. The physical damage would heal: the kit felt like part of my identity!
All was, however, not lost! A friend mentioned to me that she knew an excellent spot that could conduct repairs. "They do great work," she said, "trust me."
Well, trust I did, and it turns out that she was right! I could not have been more pleased. I would probably tell my own friends to pay the same establishment a visit in case they ever had things to mend after a brush with cold, unfeeling asphalt. And then I realized: this was an excellent case study for the importance of word of mouth marketing for small businesses. (more…)
Our newest Merchant Advance Loans 101 Video is now live over at the Youtube channel for your viewing pleasure. This week, Merchant Advance CEO David Gens takes a look at the differences that separate merchant advance funding from traditional business loan products. The video is below: click through for a full transcript of David's thoughts.
(more…)
Your intrepid blogger recently returned from the cinema, having gone out to indulge in blatant nerdery and general action-adventure escapism courtesy of the new Avengers film. Verdict: not bad! Lots of robots! James Spader!
Though, I started to think: superhero movies are a billion-dollar genre. Many of these films focus on the early days, the so-called "origin story" of your favourite crusaders (caped or otherwise), in order to allow new fans the chance to get acquainted. Poor Spider-Man has had to suffer the indignity of three or four retellings of his origin over the years with various actors in the title role, with another on the way. And yet, some of the best comic-book stories are in fact origin tales! Batman had Year One. Hulk: Grey gave the Bruce Banner story impeccable heft. Iron Man: Extremis made Tony Stark feel genuinely human only to become superhuman.
Small business owners know that the first year of operation can be a challenge requiring heroic feats as well. There's a tremendous amount to learn, do, and experience - much of it unexpected. At Merchant Advance, we recognize the challenging gauntlet that businesses can run in their first operational year. Competencies such as business planning, marketing, finding a client base, creating trust, developing workplace culture, building a team and creating goals are all developed in this time!
As Peter Parker's uncle Ben so sagely put it, "with great power comes great responsibility." Your small business has the power to influence the community around it, and it can also take time to understand and manage the many responsibilities. Once you've built your small business' origin story, we want to see it develop and grow into a longer arc that will keep your customers engaged for years to come. This is true even if banks have told you that access to working capital and funding for your business is out of reach. Visit us at merchantadvance.com to find out more.
As I write this, I can see beautiful rays of sun shine down on Merchant Advance HQ in Vancouver. (At last!) Along with the proliferation of people going out for runs and abandoning their jackets, there's one other sure sign of the turning seasons: farmers' markets - much like the one I walked through just yesterday in the streets of Yaletown - begin to set up their wares in cities all over Canada. On spring and summer days, these installations form a recurring nexus of public activity that is almost entirely driven by small business participation.
(more…)
