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Your Cash-Only Policy Is Holding Your Small Business Back

In recent Intuit study shows a whopping 55% of American small businesses do not accept credit cards. Is your jaw on the floor? Ours was. We fact-checked that stats again and again to make sure the study wasn't taken in 1997. "Intuit estimates that each business that does not accept plastic misses out on approximately $7,000 in sales annually, equating to approximately more than $100 billion in collective lost revenue. This missed opportunity represents a combination of new sales and sales that go to other businesses that accept credit cards."

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That's more than half of you out there saying "no" to paying customers and either losing business or souring the customer experience, if only just a little bit. CNBC spoke with the owner of Joe Coffee, a chain of craft coffee shops in NYC. For ten years, it felt natural to be a cash-only business—it avoided significant processing fees and was in-line with their mom and pop reputation. However, owner Jonathan Rubenstein started to feel a shift. "We started reading our Yelp reviews—75 percent of the negative comments about Joe were about us not taking credit cards," he said. "We were losing a lot of sales in terms of people not having cash and going to a competing coffee shop but also people spending less money who wouldn't buy a $17 bag of coffee [beans] or a $75 grinder." 

Cash flow is vitally important to the health of a small business, and accepting credit cards can help alleviate cash flow strain as well. Small businesses that take credit cards get paid quicker and make more sales than businesses with a strict cash-only policy. The survey found that 83 percent of businesses that accept credit cards make more sales, with 52 percent making at least $1,000 more per month and 18 percent making at least $20,000 more per month. In addition, 74 percent of those surveyed said they get paid faster and reduce bad debt by accepting credit cards.

If you like your facts in infographic form, we've got you covered below.

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Do you accept credit cards? Why or why not? Let us know in the comments!

How To Price Handmade Goods

Every business owner out there sells something or other, but then there are the makers. At Shopventory, we're lucky enough to have clients all over the world who are truly makers—of everything from watches to screen-printed art. When you work your behind off to create something truly one-of-a-kind—how do you possibly put a price tag on that special handmade product? How to price handmade goods

To price this tricky (but amazing) type of inventory, try this simple formula from Etsy:

Materials + Labor + Expenses + Profit = Wholesale x 2 = Retail

The Breakdown:

Materials: Include all your most insignificant materials, packaging, shipping, etc. for each item. It adds up!

Labor: What would you (or do you) charge per hour? Multiply your hourly rate by the hours it takes to create each item for your labor cost.

Expenses: Include studio rental, utilities, repairs, web hosting, office supplies, product donations, promotional materials, advertising, meetings with wholesale clients, gas to deliver products, processing fees for PayPal Here or Square, and every other cost to run your business. Divide those monthly costs by the number of items you sell each month (or plan to sell) for your expenses/item cost.

Profit: How much profit would you like to make on this product? Be honest. Don't be stingy with yourself.

Add the above up to get your wholesale price. Multiply that by two for your retail price. Easy-peasy.

Other considerations:

Higher prices can either turn customers off or turn them on. Your packaging, branding, quality of work and price will determine the perceived value of your goods. Pricing your products too low can make your customers question the value, so try to find a happy medium. When in doubt, estimate a little high. MAKE zine cites a the owner of a wedding stationary shop that raised her prices in order to focus on what she thought would be fewer clients. Instead, pricing herself as the most sought-after designer in town made her the most sought-after designer in town.

Is your craft your full-time job? Do you want it to be? Here's where that old saying comes in: Dress for the job you want, not the job you have. Price for the business your want, not the business you have. Yes, you might still be sending dozens of free lotion samples to beauty bloggers to generate buzz and build your client base, but it also means that you are confident enough in the quality of your products that you will charge your friend's cousin's dentist full price.

We're Excited About Next Generation Payments

nextgenpaymentsRetailers large and small are adopting new mobile payments systems all with the goal to make everyone’s lives easier. For both the customer and the business, payment will be faster and the experience customized. A customer becomes more than just a walking wallet and, perhaps one day, he or she won’t need to lug around plastic and cash.

Mobile payment systems have typically been found in small businesses or scattered amongst pop-ups, but you may be surprised when you find the new PayPal in-store payment options in retail giants like Home Depot or JC Penney.

PayPal’s payment tools are moving toward improved customer experience. With PayPal Here, local and mobile businesses can process credit cards easily and from anywhere. Larger stores may gradually be implementing in-store payments, which just require your phone number and PIN. Finally, PayPal is partnering with Vend, Shopkeep, Erply, and Leapset, four POS software companies that suit well to small business needs.

With PayPal’s partnering with these companies, payment is fast and sales are organized. With a check-in app that opens the path for loyalty program options, customers are recognized, connected automatically, and encouraged to visit more often. Additionally, combining PayPal with the POS software consolidates almost everything into one system, making the retailer’s life much less hectic.

But if businesses take it a step further with organization, they can’t track the quantities of their products they sell. Business owners’ lives are still chaotic when they’re stuck keeping tabs on inventory manually. What sells the best? How soon before you run out of this or that? What isn’t selling well enough?

While two elements of the equation are solved, they need one more to optimize their business management. Using a program like Shopventory that integrates with what they already use can make a small or mobile business excel beyond what they originally thought possible. It keeps track of inventory quantities and provides reports on your sales to help with your business strategy, all while integrating with your POS and payment system. A business trifecta, if you will.

Maybe one day all customers can rely on their phones as their preferred method of payment. For now, the mobile payments industry is growing more innovative and more businesses are adopting next generation payments to accommodate their customer and management needs.

Have you experienced any next generation payment methods? Let us know in the comments or on Twitter (@Shopventory)!

A Guide to Pop-Up Shops

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Summertime is the perfect time for pop-up shops. With everyone out shopping and dining, putting up your own pop-up shop in the midst of this traffic can help you sell more this season. Here are some tips to set yourself up for success in your pop-up endeavors.

1. Take Advantage of Festivals, Events and Trade Shows

Festivals, fairs, and exhibitions are consumer treasure troves for pop-ups. Manning a pop-up shop at one of these can wrangle tons of customers and keep them coming back for more once the event is over. Summer is the perfect time to set up shop at these events, but how do you find out when and where they are?

2. Understand Your Ideal Target Customer

It's an important step because of two reasons:

1) It helps determine which events you should focus on attending 2) Determines who and how you target the people who are most likely to buy from you

For example, if your business is selling a product-line of yoga pants, so your target crowd will most likely frequent healthy lifestyle festivals. Check the local Chamber of Commerce websites for festivals and fairs or alternately, use BizTradeShows.com to find tradeshows you can participate in.

3. Set Up Temporary Seasonal Shops

Pop-ups are short-term, and you should use this fact to your advantage. Landlords would rather have their spaces filled than vacant for a lot of reasons. Reach out to any unfilled locations and negotiate with the landlord; it's possible you may not have to pay rent aside from utilities (water, electricity, Internet, etc.). See if you can work out a deal with mutual benefits. Once you've found the perfect location, make sure your budget can handle any other fees. Business rates and insurance are some to keep in mind.

Sidenote: If you reside in the UK as a vendor, Appear Here is a handy tool for looking up landlords listing vacancies for pop-up shops.

4. Experiment With Merchandise

It may not be readily obvious but pop-ups are a great way to test out whether the new merchandise will be successful. If you made an ideal customer profile and selected a relevant event to participate in, you get to observe the purchasing behavior of  people who share essentially identical characteristics to your usual customers. Use pop-ups shops to check whether your gut feeling about pricing, merchandise or package deals are validated by customers.

5. Get a Mobile Payments Reader

The days of paying with cash are dwindling and almost everyone pays by card now. Make it more convenient for yourself and your customers by getting a mobile card reader (ie. Square, Intuit GoPayments, or PayPal Here). It works with your Apple or Android smartphone and tablet, processing cards quickly and easily. It will save you a ton of time and hassle, plus your customers will find it convenient.

6. Increase Traffic with Social Media

If you already have a strong customer following through Twitter, Facebook, Pinterest, Instagram etc., flaunt your pop-up initiative. Tweet your location and any specials to get them into your shop or to visit the festival you're selling at. It should NEVER matter whether or not you have followers. You're never too early to start telling your story, sharing your experiences and building up a brand.

Get on your social networks, start listening to what  people are saying and get in on the conversation.

7. Create Drama, Attract Attention and Make it an Experience

Put thought into how you're going to attract customers to your stall. It could be simple, such as through great visual merchandising or it may involve more such as having giveaways.  Add splashes of color, movement, lighting, music, or aromas to make your pop-up memorable and welcoming.

Running a pop-up shop can be a labor of love. Yet with the right preparation, your pop-up can flourish wherever you plant it. Best wishes!