Surreal Entrepreneur

As an entrepreneur this is the most feared headline concerning business. There are certainly some truths to “any press is good press” however, when it comes to the topic of fraud, no press is the best press. While I was working on my first company with a good friend of mine, I was troubled by how much time and money we were spending on security. Now granted, this was a website that did business transactions over the internet, so I understood the necessity for some security. As I dug further down the rabbit hole I realized that it is imperative to not only protect physical assets from theft, but also information about the business, employees and most importantly, customers.

One Saturday morning I was startled awake by a phone call from a toll free number. Now I have made it a habit to entertain myself by playing harmless games with phone sales people, however, receiving a call at 8:15 am on a Saturday morning is preposterous and I meant to chew someone out. Answering the phone in a very perturbed voice I was met with a very to-the-point professional who informed me that he was a member of the State Employees Credit Union staff and that he had seen some suspicious activity on my account and wanted to verify that I had made the transaction. So after I had put him through his paces to test that he was who he said he was, he did the same to me. He then told me that there had been a charge to $4000+ dollars to be payed to a company that I had never heard of. He had also seen this same charge on several other member’s cards and so he was suspecting that it was a fraudulent charge. At any rate, we tracked back through my bill and highlighted any possible matches to previous charges and found out that one company that I had bought a t-shirt for a favorite musical band had been hacked and that hundreds of people had been charged over $4000 each by the person that got this websites customer information.

Needless to say, I haven’t shopped at that site again and I would certainly not recommend it to any of my friends. There are so many ways people are finding to take money from other people. It’s incredible how much a business owner has to prepare for. However, in this situation, it’s safe to abide by Murphy’s Law: Anything that can go wrong, will (sorry if I’m paraphrasing that). We as business owners must not only work to discover what trends are happening that threaten our livelihoods, but we must prepare for it and be proactive to defend against these threats.

A gas station that is part of a chain gets robbed and no one gets hurt, who does this affect? The cashier might be shaken up a little bit. The owner has insurance, so the money is replaced, the police get some excitement, and someone has $300 more in their pocket.

Now what if a small business gets robbed, the owner is most likely the cashier. He or she might fight harder to protect their money, someone could get hurt, the money is not insured and a whole week or two will go into the books with out profit. Two weeks of profit could be the difference between being able to purchase inventory or spiraling down into failure. It is a simple metaphor to illustrate the necessity for being proactive about security and taking measures to put up walls between your money, your customers money, and the bad guys.

On my way to work this morning I was pondering what the implications of me reverting back to a “dumb phone” would be. “Dumb phone” as in not a smart phone, no apps, no internet connection, just a good old fashioned texting, calling phone, with a calculator and possibly brick breaker. It has been about 3 years since I made the switch but sometimes I feel plagued by the necessity to always be plugged in. But I do realize how much more convenient/languid it’s made my life. Now I have the ability to find directions from and to almost any place in the contiguous US. Also I have the ability to directly price shop while looking at one product in a store and comparing prices against hundreds of stores simultaneously. Also, I have the ability to run my own online business from the convenience of the palm of my hand.

Online storefronts are revolutionizing business. Think about purchasing products at a wholesale price and selling them at a retail price, but cut out the rent, insurance, maintenance, sales staff, signage, and store hours. This allows a single person to own and operate a rent free store alone.

When I was 17 my parents extended me my first angel investment loan of $1000. I took this money, established a relationship with a Chinese clothing producer. I purchased a bunch of imitation jackets that were in style and sold them on ebay (as imitation products). I was paying about $31 per jacket including shipping. I was selling these jackets for anywhere between $50 to $270 pushing my total profit to about %150 of what I was initially loaned. Not only was this one of my first real entrepreneurial pursuits  but it has been a lifelong hobby so far, leading to many more sales on ebay and a lot of fun!

Now the negatives can be numerous also. Suppose that you purchase a bunch of products upfront that don’t end up selling and you take a loss. You also have the possibility of your products getting lost in transit. Online fraud and identity theft might plague you. There are a myriad of reasons that Online shopping also might not fit into your lifestyle. Maybe you don’t want to be looking at your phone/computer all day every day to coordinate shipping schedules for sold products. The online storefront is also a little daunting to get into. There are technology barriers to break and also advertising costs can become difficult.

So to wrap up, online storefronts and businesses can be  very useful as a breeding ground for ideas and experience. They allow you the opportunity to start a business for the cost of the website and the products instead of having to turn the lights and water on as well. You can reach a global audience instead of having to do market research and fit your product into just your local community. But it can also be a risky decision if you are not prepared and secure with your transactions. Overall, make sure that this type of business fits into your lifestyle and life goals.

To change gears, lets look at pre-established organizations. Companies with lots of employees, but with lots of room to grow. I’m currently working for a large organization, so I’m going to stray away from making harsh criticisms but I don’t think I can be taken to court for admitting that there is a little bit of a difficulty implementing change in any organization let alone a large one. I’ve come to understand that large companies are set up sort of like a dictatorship,  in the nicest way possible. This is American capitalism at its finest. The fact that one person can run an entire Fortune 500 company under his or her own discretion is incredible to me, and of course I would love to be on the throne one day. However, the system is a little flawed. It completely quells the ability for the new people to be innovative. If someone on the bottom has a wonderful idea, they have to push that idea through layer after layer of approval before the idea catches on and starts to spread. Now this isn’t unlike breaking into a market with a new and innovative idea, however there is an advantage to breaking into the market, if you are backed by money you can launch advertising campaigns to show the world how useful you are. The ability to implement change in an organization is limited only to the rate of communication from the bottom of the food chain to the top. I believe that there are companies that encourage and reward their employees to be creative and innovate, I also know that lazier companies will completely rebel at innovation, because that necessitates action and change, and not many people see the long term benefit to the company as a personally beneficial parallel.

This is an incredibly important thing to learn though, if you are the head of a company, tap into the innovation and excitement of new hires. Forgive their inexperience, but tap into the grains of truth that they bring to the table before they pick up the routine of what everyone else is doing. Also if you are starting in a company, keep pushing using interpersonal skills and networking  in order to further your ideas, because whether it is at the current company or the next one, your initiative will be rewarded.

This is a topic that many small businesses struggle with. We have to consider this from the consumer standpoint as well as the pros and cons for the business owner to truly figure out if it would be more beneficial for a business owner to accept cards or not.

First, what benefits can the business owner see from only using cash. There is certainly a lot less headache associated with cash transactions. Simply one receipt is all the paperwork necessary after the transaction is made. Also there is no transaction fee being charged in order to put that money in the owner’s hands. Adversely the customers that don’t have cash will either have to choose to leave without purchasing anything, or they will have to visit the closest ATM and make a withdraw. We’ve all been in the situation where we’re in the store after picking up some small knickknack and then we spot the sign at the register that says “CASH ONLY”. We then proceed to set the item back where we got it, peruse a little on the way out the door and never look back. This and issue that is hard to overcome when a store owner refuses to make the jump to credit card acceptance. Now on the adverse side, the business owner loses around 3% of every purchase made by card, so if a store isn’t making very many card sales, or the transaction average is really low, this could be a detrimental loss to profit margin.

Another one of the risks of accepting cards is that you will have to figure out how to keep all of that customer information secure. If you are keeping customer information locked up and waiting to bill on a certain day, this could provide a pretty easy target for people who know how to use credit cards for malicious personal gain. Cash only makes you liable for yourself.

We shouldn’t have to discuss online sales, there is no question, you must accept cards.

In my opinion I believe that every business should accept credit and debit cards simply because of convenience, we have to work hard to not only keep customers but also to attract new customers. When a customer is able to walk next door and pick up the same items but they accept credit cards, they will walk next door instead of to the ATM.