The future of money and your business

Innovate or die. This has been the moto of many great people working in business. The famous economist Joseph Schumpeter spoke of the gales of creative destruction. If you aren't continuously innovating in your business, staying ahead of the twister of change then you're liable to be caught up in the next hurricane. I think we've had enough of the quotes and wind metaphors! However, the simple fact is that your business needs to continuously move with the times. Fortunately, I'm probably preaching to the converted. You're reading this blog because you want to know how other businesses operate and how you can improve.

Velocity of money in your business

I'm an economist and as such I like to think about businesses using common economic models. We can measure the size of the economy by looking at the amount of money in the system and the speed in which it changes hands. The speed part is referred to as the velocity of money. The faster that money is transferred between different parties within an economy then the greater the value of that economy.

The same idea can be applied to a small business, or any business for that matter. The value of the business can be assessed based on the rate of transactions and the value of each transaction. If all other things remain equal, increasing the rate of transactions will increase the income generated in the business. If you can find any way to improve the velocity of money in your business then that must be a good thing, right?

As you're a business constantly looking to innovate, have you considered focusing on speeding up customer transactions. Gone are the days of cash, we are increasingly becoming a cashless economy. And certainly, gone are the days of writing a cheque - incidentally I received a cheque the other day for £50 which was probably the first time in about two years. I hardly knew what to do with it in the bank. But I digress!

If you're running a business in this day and age then you have to be willing to accept credit cards and debit cards. There's simply no excuse for not doing so nowadays. Occasionally, I come across a business that only accepts cash - I don't give them my business as I don't carry cash. If you don't accept credit cards or debit cards then you are almost certainly missing out on the opportunity to increase the velocity of money in your business.

Why don't you accept credit or debit cards?

Whenever I've come across businesses that don't accept credit or debt cards I ask why they don't accept. The answer that the tend to give is that it's too costly for them and that it would require getting complex systems and machines in place. They'd rather stick to good, honest cash.

However, that argument doesn't stand up to scrutiny any more. There are companies out there that enable you to make credit card payments using equipment that you probably already have such as an iPad or tablet device.

The Point of Sale solution

There are of course typical chip and pin or Point of Sale devices that a lot of mainstream businesses use. However, if you're a regular frequenter of restaurants then you've probably come across the main problem with chip and pin devices. They generally require an internet connection which can sometimes be elusive, requiring good ol' reliable cash to come out!

However, there are other Point of Sale solutions other than the standard, clunky chip and pin devices. SumUp have produced a Point of Sale system that among many of it's benefits, has offline-capability. You don't ever need to risk disappointing a customer again and can accept payment wherever and whenever. SumUp will surely increase the velocity of money in your business. Innovate or die!

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