The demand for green businesses is growing rapidly. You need to be aware of the growing interest in sustainable and eco-friendly businesses before choosing to start a company in this space.
One global study found that 55% of consumers around the world are willing to pay more for eco-friendly products. Another study found that 77% of consumers will at least consider sustainability when making a purchase decision.
However, there are some challenges green business owners face. One of the biggest challenges they face is getting paid by customers. Fortunately, there are some A/R strategies that eco-friendly businesses can practice to get paid on time.
Collection Strategies for Eco-Friendly Businesses
When you have a green business, there are a lot of processes you have to keep track of. You can’t just think about taking care of the environment. You also need to think about the daily aspects of your business.
Beyond things like your payroll, your utilities, and all of the myriad expenses and decisions you need to stay on top of, you also have to be aware of processing the payments that come in when someone places an order. Whether you sell eco-friendly products or services, you have to be sure that the payment is going to get into your account properly from wherever it’s coming from.
The process of settling transactions can be as simple or as complicated as you allow it to be. This usually happens through a merchant acquirer, which is a slightly misleading term. While you’re the merchant and you obviously don’t need to be acquired, you do need to make sure that the process of receiving payment for what you offer goes smoothly. A smooth process is more likely to be a profitable one. It is something every eco-friendly business should be aware of, regardless of the growing demand they will benefit from.
The Setup Process
Setting up a merchant account as a sustainable business is going to be a lot of work for any green company to get a handle on. In many cases, there are setup fees, equipment that can require a lot of software and difficult setup, and in many cases, the setup can become too expensive to be practical until there’s a lot of business coming in. Whether you’re starting out as an eco-friendly company or are expanding into a new green market, this can be a risky proposition that can leave you in the hole.
The good news is when you pick the right merchant acquirer, you aren’t going to be paying a bunch of fees. When the company is willing to make their profit on the back end, they are the one that takes the main thrust of the risk. You don’t pay a significant amount to start up, and you only end up paying when you’re making sales. By the company getting a small cut of your proceeds in exchange for facilitating the transactions, you can focus on growing your business instead of summoning up a lot of capital at the outset.
The Profits and Regulations
Profit margins are a significant part of any kind of business, and the margins come from the amount that the acquiring bank charges. Part of this comes down to their business structure, while another part is going to come out of the regulations in their area. Since banking regulations can vary considerably across the world, with the different provinces and countries involved, each imposing their own requirements, it’s essential to work with an acquiring bank that’s compatible with all of the different pieces that are involved in the process.
The process works properly when every part of it works in tandem together. This happens when the acquiring bank works well through all of the regulations and charges fair fees. When you work with a company that allows you to get your feet under you at the beginning, it does great things for you moving forward.
Follow the Right Practices as a Sustainable Brand
There are a lot of practices that environmentally friendly companies should follow. It is easy to get lost in the focus of being better for the environment and lose sight of the business fundamentals. If you happen to franchise for a new business, then you should hire a franchise consultant. You should follow these tips to make sure your business operates efficiently and gets paid on time.