As comforting as the feel of cold hard cash in hand can sometimes be, it can also be holding your business back.
Those wadded-up bills and the jingle of coins may give your pockets some purpose, but when it comes to running a modern business, they can be an unnecessary burden. Worse, cash can sometimes obscure how well your business is truly doing.
Going completely cashless can be the answer to shifting your small business into a higher, potentially more lucrative, gear. Of course, accepting cash is a given for certain types of shops and businesses, particularly those that primarily cater to clientele that prefer physical dollars and coins. Standardizing on digital payments, on the other hand, offers improved business management and new growth opportunities.
Below, Yumi Clark, vice president of New Product Development at Capital One Spark Business and a small business payments specialist, shares her reasons for small businesses to go cashless.
Increase Speed of Service
Let's face it, cash can't keep up with the pace of modern business.
"Anything small businesses can do to reduce friction with their customers is good and will result in them serving their customers faster and more efficiently, increasing customer satisfaction," said Clark. "Additionally, serving customers quicker ultimately allows businesses to serve more people – particularly during busy times of day or year (think the morning rush for a coffee shop or the holiday shopping season for a retail store)."
Improve Insights into Financial Health
Cash is also a major blind spot. In the time it takes to collect, tally and accurately record cash transactions, opportunities can slip past.
"Going cashless not only saves customers time, but also business owners as they no longer need to close out registers at the end of the day or make regular trips to deposit money. And an even greater bonus to the time saved by going cashless is having greater insights into a business’s financial health as savings and checking accounts can reflect updated balances (rather than waiting for deposits to clear or factoring in the cash currently sitting in registers and not in the bank)," said Clark.
"Furthermore, businesses will have greater access to data and analytics in real-time – empowering them to make more informed business decisions," she added.
Reduce the Risk of Theft
Cash-rich businesses make a tempting target for criminals. Why risk it?
"As a business goes cashless, the fear of robbery decreases significantly for obvious reasons. Without cash to attract thieves, business owners can certainly worry less about the safety and security of their assets and employees," said Clark.
Anchored by your cash register when the next neighborhood business fair or pop-up shop opportunity comes around? Going cashless can set you free.
"By embracing mobile and digital payments and ditching cumbersome registers, businesses will have greater fluidity and flexibility, allowing them to do business on the go," encouraged Clark.
Attract Savvy Customers
Cashless payments can help draw to a desirable customer base, said Clark.
"Businesses that go cashless will appeal to younger, tech-savvy customers that are digitally minded. If this is a priority demographic for a business, embracing a cashless system could be one way to set themselves apart from competitors and improve customer experience during check out," she said.
Of course, there are some potential pitfalls to going cashless. Below are some bonus tips on avoiding mistakes while making the move.
Bonus Tip: Don't Be Lax in Your Communication with Customers
Don't leave your loyal customers behind, advised Clark
"When making the transition to a cashless business, it’s vital that the change is effectively communicated to new and existing customers. The last thing you want to do is alienate 'regulars' who have been patronizing your business by not notifying them of the change, or confusing new patrons about the policy," she stated. "Send email blasts, post physical signs and share the date when the cashless policy will go into effect across social channels. Ensure people know about the policy before ordering or shopping to avoid issues at checkout."
Bonus Tip: Take Cybersecurity Seriously
It's good advice in general, but critical when it comes digital payment systems.
"Though the threat of physical theft decreases significantly when going cashless, the threat of cybersecurity is real and should absolutely be taken seriously from the start. Invest in technology and train employees early about precautions that should be taken to keep your business and customer data secure," said Clark.
Bonus Tip: Don't Forget That There Might Be Some Growing Pains
Entrepreneurs succeed because they rise to the challenge. Don't let a hiccup or two take your eyes off the end goal.
"As with any major change, there might be some unforeseen growing pains when making the transition to a cashless business. Remember that customers and employees might take time to adjust to the new systems and policy," said Clark. "Remain patient and know that after a brief transition period the benefits to going cashless are numerous and will make your business stronger in the long term."