Today I’m starting a new series called RAISE THE BAR, where I’m sharing simple things you can do to raise the bar in your own business.
After working in the online world for five years, I hear a lot of the same worries, fears, and complaints over and over. Many of them, with experience and hindsight in my favor, are really non-issues. But they can be difficult or impossible to see when they’re happening to us. I sure didn’t see them as non-issues when I was faced with them!
In this post I want to share with you one area where business owners put too much time, energy, worry, focus, and complaint. It’s one of those “facts of business” areas that just aren’t worth stressing about… yet we all do when we’re first getting started.
When you worry about this one thing, you’re adding undue stress to your life and your business. You look less professional. And you’re limiting your money magnetism. (Yikes!)
When you stop stressing about this one thing, you’ll have more energy to focus on doing what you love and making good money doing it.
Online Businesses Have So Many Perks!
As online business owners, I often think of the countless perks we have.
No physical signage!
No storefront!
Contractors, not employees!
The ability to change our mind about almost anything whenever it feels right!
And as online service providers, we have even less to work about.
No inventory!
No inventory management!
No vendors!
No expensive equipment!
Running this kind of business is amazingly inexpensive and incredibly simple. This is why I am IN LOVE with the online business world. I mean, how awesome is this??!! And it’s my job??!! It’s downright awesome.
The Cost of Doing Business
At the same time, running any business has a price, even a relatively inexpensive online business.
It’s almost impossible to make money without spending even just a little money. You have to pay for website hosting, email list management, and bookkeeping software, to name a few.
You also have to pay to take credit cards.
Yet over and over, I hear the frustration, “PayPal charges so much! There has to be a cheaper way!”
Yes, it costs an online business an average of 3.5% to accept credit cards, whether you’re using PayPal or a regular merchant account.
So to this common newbie complaint, I lovingly say: It’s time to RAISE THE BAR.
Accepting credit cards (and paying the associated fees) is part of doing business.
If the biggest expense you have is to take credit cards, consider how minor that is and how lucky you are!
As a consumer, it’s a pain in the ass to send checks, and everyone loves credit card points!
It’s time to skip the checks, accept the credit card fees, and RAISE THE BAR. I know you’re in this business for the long haul, so it’s time to be the professional you are and up-level this area of your business.
Playing It Smart, Doing Business Like a Pro
When I create a new product or service or plan a retreat, I factor in the cost of taking credit cards… even and especially when it comes to my five-figure price tag programs. Sure, having clients send me a check would save me money, but it’s a pain for them and less professional for me.
So if you’re worried because the 3.5% is critical to your bottom line, maybe you need to start increasing your prices by 5% to cover this expense and eliminate the check-sending hassle for your clients.
Because taking credit cards is what “real” businesses do.
That store down the street, that restaurant you love, amazon.com, and that spa that treats you like a goddess… they all take credit cards. And to cover the cost (if they’re smart), they add the fees into their prices to cover the cost of accepting plastic.
If you’re serious about business, do business like a pro. Accept credit cards from all of your customers. They’ll thank you for it!
What Do You Think?
I’m curious what you think!
Are you or were you like me, asking for checks instead of credit cards because you are or were afraid of the fees?
Are you ready to RAISE THE BAR and accept credit cards?
Have you ever wished a business you love accepted credit cards? (Like that great Thai place in town that only takes cash!)
I can’t wait to hear what you think about today’s hot topic! Please share in the comments below!
YES! Thank you for saying this Jenny.
I just got hit with the 3% charge that someone else put on top of the invoice to me which as somewhat of a customer experience evangelist, I’ve got to say, IT PISSED ME OFF.
Why the hell should I have to pay for your expenses on top of what I’m already paying.
Especially as it wasn’t a small invoice either.
You don’t walk into a restaurant and get hit with a bill for their lighting, rent or staff costs. It’s factored in.
Sucking up the fees is a cost of doing business. Account for it, raise your prices…. whatever.
But don’t make it difficult or ANNOYING for your clients to give you money.
I’m with you 100% of the way lady xxx
Your passion made my day. I have been closeted on this one, trying to keep my passions at bay, but I’m so glad you feel the same way. I can’t stand it when people charge more to have me pay with credit cards (and tell me about it). Just factor it in, people!
I believe it is actually illegal to charge more to someone paying with a credit card.
It’s not actually “illegal.” More accurately, it’s a violation of the Visa/MasterCard Terms and Conditions. (My husband’s in the industry so I know way more than you’d ever want to know about accepting credit cards!)
Technically, each person would have to check with their processor (whether that’s Square, PayPal, or a bank) to see their specific terms and conditions.
In most cases, when you see businesses (think: coffee shops) say, “Minimum credit card purchase $5 or a $0.50 fee will apply,” that is in violation of their terms of service with V/M.
However, the credit card industry is changing a bit and now gas stations and some low-margin businesses are able to adjust pricing based on card or cash. Each business should verify their T&C to be sure.
I just ran to ask my husband about this, and he said he tells business owners to instead offer a “cash discount.” No one is turned off by a discount; everyone hates extra fees.
But just to clarify, offering a cash discount is the exact same thing as charging more to credit card users, just with a different spin. I think your advice is best: check your T&C. Better yet IMHO, just charge everybody the same.
My husband loves a good research project! He found this link regarding PayPal: https://www.paypal.com/webapps/mpp/ua/useragreement-full?country.x=US&locale.x=en_US
If you search for “surcharge” you’ll find this:
4.6 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions.
So those business owners that do charge extra are in violation of their PP T&C.
Nobody in Norway or Sweden has used checks in over 15 years. We all use cards here. So it’s been totally natural for me to accept cards all along.
Thank you Jenny, for saying that. As an online business newbie I was annoyed by the fees looking around to find s.th. cheaper. But you’re totally right. I’m gonna up my game now! 😉
Way to claim it and raise the bar, Kiria!
I also love using Paypal because I can send professionally branded invoices (my brand) but from a global service. Plus it makes my accounts much easier when most of my income comes in via one source. Plus I can take credit cards! What’s not to like 🙂
I love it for that reason, too. So much easier to manage and keep the books!
You are totally right! we should factor in the costs.
Interestingly cheques are a lot less frequent in canada. I actually have the ability to accept debit. I still need to get paypal gadget so that I can put in credit cards directly. Thanks for the remidner.
When I saw the email, I thought you were going to say something else entirely. Interesting.
Thanks again!
This definitely tends to be more of a US-based problem. We love our free checks!
I’m so curious what you thought I was going to say… Will you fill me in? 🙂
Hi Jenny,
I’m a little weird so I don’t know if it will even make sense.
When I saw this paragraph…
When you worry about this one thing, you’re adding undue stress to your life and your business. You look less professional. And you’re limiting your money magnetism. (Yikes!)
My head when to “stop worrying about money.”
There is a difference between concern and worrying. Obviously there is concern and there is a need. One should be concerned and take appropriate action. But when there is too much worry, it creates a neediness, which turn people off. It can make you look unprofessional. I think people can sense that a million miles away. In my learning over the last year, I’ve become rather obsessed with the prices and I think I missed out on some opportunities. I was doing of being of service with a hidden agenda.
Also and I’ve been asking for spiritual information about the Law of attraction and the law of magnetism recently. I was shown that the two go hand in hand. It’s more about being a magnet, allowing others to come to you — rather than pulling other people to you. When you worry about money, then you are pulling. It takes a lot more energy to pull than to allow others to come.
Hope this makes sense!
Interesting! I think the clingy “I need that 3.5%” energy of the credit cards are in line with what you’re saying here.
“Stop worrying about money” is good advice but it’s also hard to swallow! I’m certainly not the expert on teaching that; I’m better at working my ass off to make it 🙂
Thanks for sharing, Nathalie!
I totally agree!
By the way, I’m not the expert either. Just learning some new things recently, which is why my head went where it did. I actually enjoy working my ass off.
I remember when I used to grumble about credit card fees, and did everything I could to avoid paying that fee. Happy to say I factor in the cost of accepting cards now without thinking twice, which must be a sign I’m not a newbie anymore! Yay!
Way to raise the bar!
I’ve always taken credit cards and I didn’t even realize that people still accepted checks as a form of payment, especially online! The only thing that I write checks for is my rent! I definitely think that if you are doing business online that you need to take credit cards.
It does happen. Crazy, right?!
Funny you should post this now. My square is in the mail as we speak! AND my Acuity count is just about up and running. I thought about lowering my price when I changed from traveling to each person’s home to having them come to my new studio but thought… If I’m booked why should I lower my price, especially if I have to account for CC sales now. I’m excited to see how this level of professionalism pays off!
You’re right, Sarah! If you’re fully booked or nearly so, you definitely don’t have to lower your prices! In fact, you might need to raise them!
I’m so glad you got a credit card option for your business. I love being able to use my credit card to pay yoga studios and massage therapists. It amazes me how many don’t take cards. I love that you will. High five!
If I didn’t pay the service fee PayPal and others wouldn’t be in business. That’s how they make their money/operating costs isn’t it? I consider paying the fee is paying for their service making it easier for me to accept payments. Not that I’m at that stage yet, or anything. :-O
Totally!! Great attitude and way to look at it, Christy!
I so appreciate this. In the brick and mortar world, I see handwritten signs complaining telling customers they won’t accept cards or that they had to raise prices to keep up with fees. Of course, they never seem to take into account the money they lose when I walk out in frustration. 3% of $0 is easy math.