Credit: Handing over cash image via Shutterstock
Small businesses in the U.S. are leaving an estimated $100 billion on the table in lost sales each year, a new survey shows. And it’s all because they don’t accept plastic in payment for their goods and services.
More than half (55 percent) of the nation's 27 million small businesses do not accept credit cards, according to an online survey of 1,000 small business owners sponsored by Intuit, a business and financial solutions provider.
Intuit estimates that each business that does not accept plastic misses out on approximately $7,000 in sales annually, equating to approximately more than $100 billion in collective lost revenue. This missed opportunity represents a combination of new sales and sales that go to other businesses that accept credit cards.
This also causes a significant cash-flow strain as small businesses wait for an average of $5,140 per month in overdue payments, the survey found.
"Getting paid in a timely manner can be a huge pain for small businesses," Cynthia Okimoto, owner of New York Dog Nanny, told researchers. "It used to be that if clients didn’t have cash handy, they’d pay by check. Depending on the situation, the payment wouldn’t make it to my business bank account for days or even weeks at times. The process was inefficient and stressful for both me and my clients."
Accepting credit cards on the spot helps alleviate this cash-flow strain, Intuit said. Small businesses that accept plastic make more sales and get paid quicker than those that don’t.
The survey found that 83 percent of businesses that accept credit cards make more sales, with 52 percent making at least $1,000 more per month and 18 percent making at least $20,000 more per month. In addition, 74 percent of those surveyed said they get paid faster and reduce bad debt by accepting credit cards.
Reach BusinessNewsDaily senior writer Ned Smith at firstname.lastname@example.org. Follow him on Twitter @nedbsmith.