To get a merchant account or not to get a merchant account - that is the question.
Fitness businesses need to make money in order for you as the fitness professional that owns the business to continue to pay your rent/ mortgage, power bills and all the other things that have to be paid on a monthly basis to make sure that you don't have to sleep in the street.
That is why more and more fitness professionals are moving to a recurring revenue model. This way, like your monthly bills, you will have monthly income! There are complexities with moving from a package type business to a monthly membership type business -if you want to learn more about how to look at your pricing and transition your clients to this type of package let us know in the comment area what your top questions are and we will make sure to address them in our next blog posting.
We come across many fitness professionals who question the idea of getting a merchant account, especially if their business is just starting. If you don't know what a merchant account is and how it works please read this blog posting on "What is a Merchant Account" first.
Here are a few main reasons for this skepticism:
1. Money - don't have much
2. Privacy issues - internet can be a scary place for credit cards
3. Banks - they can be a pain in the...
Undoubtedly, there is work to be done with getting a merchant account. There's an application process, credit checks, faxes, etc. But with everything that requires a bit of work, there are benefits to be had.
Because of the psychology of the human brain people tend to spend more when they use a credit card. An increase in revenue is then to be expected. Also when you have a merchant account you can set up automated billing. This means you don't have to track down your members and ask them for payment on a monthly / weekly / daily basis. No one likes to be a debt collector, so why not let the bank do what they do best?
This is where a decision needs to be made. Will the revenue made from accepting credit card payments overcome the financial cost of the merchant fees? The answer will differ for different businesses, and no, it can't be found on Wikipedia or Google. You need to look at how big your business currently is, how much time you spend creating invoices, tracking sessions, following up with clients to get your money and then getting to the bank and depositing it. Now multiple that by how much you make when you are training your clients. I bet you are looking at $100's of dollars every month. Use this number to do your comparison against what you will pay for your merchant account and then factor in where you want to grow your business to. How many more hours per month will it take to keep track of all your clients and there invoices? Would you rather use that time to grow new business rather than manage your existing business?
Using software like Volo allows you to bring all aspect of your fitness business together billing, scheduling and member management so that you can focus on making sure your clients reach their goals and tell all their friends about you!
Photo credit by Andres Reuda