22 Insights for Building a Resilient High-Risk Business

high-risk payment processing

A resilient business is a business that is built to last and has the best chance to scale. 


With that in mind, we want to provide you as many ways as possible to help you strengthen your business because that helps relieve some financial pressures of high-risk payment processing. 


Here is some of what we will cover:


  • Avoiding pitfalls in high-risk payment processing
  • Insights from industry experts on high-risk businesses
  • Strategies for building a resilient high-risk merchant business


You’re in luck, too, because several of these 22 insights focus on specific high-risk businesses. This will give you ideas, tactics, and concepts to utilize in your business (regardless of your industry).


Let’s start with an exploding industry…


Subscription Businesses Often Considered High-Risk


If you run a subscription business, you know some of the pitfalls. Yet, there are also major upsides to this type of business.


Sure, high-risk payment processing is more costly than other business types. But that can be overcome with creative thinking that generates more subscription customers.


5 Insights For Scaling A Subscription Business


#1 Customers underestimate how much their total subscription services/products cost each month, according to studies. This means they will likely continue using your subscription business for a long time. The key is to provide world-class service so they never consider dropping you (even if they need to trim their budget, they are likely to cancel other subscriptions with low-quality service first).


#2 We’ve curated insights from industry experts on high-risk businesses and found that subscription businesses have a key advantage. Customer acquisition costs can be much lower since customers are not buying a high-priced item or service. An example is Netflix. It’s easier to attract new customers who only have to pay $7.99 to start using the service, whereas renting thousands of DVDs years ago would have been too expensive.


#3 The future of subscriptions looks bright as long as customers are put first. Avoid complaints like those seen recently when a car company made headlines for charging an $18 monthly subscription fee for car owners to use heated seats. This relates to high-risk payment processing because it’s a cost that would anger many customers and lead to a chargeback. Avoid confusing customers with extremely non-traditional subscriptions.


#4 Automation is a big time- and money-saver for high-risk businesses. This can offset some of the costs of high-risk payment processing. Netflix reportedly saves roughly one billion dollars each year with their machine learning.


#5 If your business offers one-time sales, upsell offers to “save with a subscription.” Bundle packages that make it a no-brainer for customers to order more but pay less per item with a subscription. Walmart+ upsells basic necessities like paper towels, nudging customers with the convenience factor (i.e., you don’t want to run out of paper towels!).


Saving money is possible with subscription businesses, too, as seen below.


Subscription Business Owner Savings


#6 As your sales volume increases, you can negotiate better pricing with suppliers since you will be buying in bulk. This includes asking for better rates from your high-risk payment processor. National Processing offers flexible plan tiers to fit your growth.


Check out National Processing’s Flexible Plans.


#7 At a certain point, your subscription business will benefit from software platforms that make operations more efficient. A general sales platform may work in year one, but platforms built specifically for subscription businesses will be better once you begin to scale. A quality merchant processor should provide tools that integrate easily for these purposes (can also keep you from overspending on additional software).


Time to manage that money saved…


Money Management And High-Risk Payment Processing

Fortunately, there are resources to help businesses manage their finances to overcome the costly nature of high-risk payment processing. 


#8 Score.org is a tremendous resource for any small- to medium-sized business.

This non-profit organization has mentors who use their business experience to help you navigate the nuances of entrepreneurship. Money management is a critical part of building a resilient business. 


#9 Check with local community colleges, as they often offer free workshops on finance and budgeting. Libraries are another free resource for these types of training opportunities. As a business owner, you pay handsome amounts in taxes, so why not utilize money management resources created by those tax dollars?


#10 Build a crucial habit – save your money! This gives you leverage on many business fronts, plus it’s a necessity. Why? High-risk merchants usually have to keep a rolling reserve to cover any chargebacks or fraud (payment processors typically hold back a percentage of monthly sales for a set period to protect their interests). 


⭐Heard about National Processing’s $500 Lowest-Rate Guarantee? Sign with us and save – or we give you $500 guaranteed.⭐


#11 Get one-on-one coaching for your financial software platforms (i.e., Quickbooks). This helps you keep records organized and exact! Eventually, you will need a CPA as the business grows, but it’s wise to also understand bookkeeping yourself.

#12 Add and diversify revenue streams. More money coming in is a great thing, as it offsets expenses. It also protects your business in case one revenue source decreases. This insight is powerful, yet most business owners fail to use this strategy because they are too busy running their core business. The next section starts with an example of adding revenue streams for a specific high-risk business.


Convenience Stores And High-Risk Payment Processing

#13 Convenience store owners are incredibly busy. So they miss many chances to diversify revenue streams. One example is adding check cashing for customers who already visit the store daily or weekly. This added revenue (charge a percentage of each check) can offset costs of high-risk payment processing, as the customer pays the check fee in cash.


#14 One of the simplest ways convenience stores can save money on transaction fees is to alert customers that cash is preferred. A sign on the front door and at every checkout (and drive-thru window if applicable) should remind customers to use cash.


*Read more about how cash discounts work.


#15 One expert we spoke to highlighted a reason many convenience store owners struggle with higher processing fees – they don’t pass fees on to their customers. When he began doing this in his store, he saved an average of roughly $1,100 per month! Most states allow passing of transaction fees to customers as long as the merchant discloses this policy. 


#16 This same expert noted another way convenience store owners can increase profits and scale, but many are unwilling to do so. He avoided the typical route of having every item delivered by vendors. Instead, he would pick up certain products locally, allowing him to have a higher mark-up on the items versus having them delivered.


Moving on to another specific high-risk industry.


Building A Resilient Consulting Business 

#17 The best way to maximize revenue as a consultant is to create enormous demand. Having a waiting list of clients shows potential clients your services are highly valued. If you are a one-person consulting business, your time is limited. So, you must charge premium prices, and having big demand allows you to charge more.


#18 Authority and credibility are staples of this high-risk business. You want to gather as many positive testimonials as possible. Also, aim to collect testimonials from highly respected people since this will lift your credibility to new heights. Certifications help as well. Not only will clients see you as credible and trustworthy, so will payment processors.


What about insights that can help any high-risk business become more resilient?


How Loyalty Programs Alleviate High-Risk Payment Processing Challenges

Loyal customers drive revenue in a litany of ways. So, use these last four insights for loyalty programs to increase your high-risk business’s revenue.


#19 Any loyalty program that is complicated or hard to sign up for will not be widely used. Make your program simple to join and easy to reap the rewards (no hoops to jump through!).


#20 Ask yourself if the rewards are the best fit for your customer base. Segmenting your customer list helps tailor the rewards to each segment. An example would be a convenience store offering a free coffee to coffee club members versus a free fountain drink to soda club members.


#21 Take advantage of data inside your point-of-sale system to maximize effectiveness of your loyalty program. There is gold inside that sales data. For example, knowing which items your customers purchase at the same time helps create package deals and ideal loyalty rewards based on that data. How do you think Starbucks implemented its loyalty programs? Sales data guided them.


#22 Lastly, have a specific goal in mind with your loyalty program. This is a crucial part that many businesses forget. A loyalty program should do more than increase sales, which is great, but aim higher. Example goals may be expanding offline sales to online, reaching a new age group of customers, and saving money on advertising by boosting word-of-mouth.


Time to end with two frequently asked questions.


FAQ Building a Resilient High-Risk Business


How can I save money on high-risk payment processing if I have a poor credit score?

Work on improving your credit score before applying for a new merchant account. No one wants to wait, but patience could get you a better rate if you lift your score. If your spouse has a higher credit score, then having them apply for the account is often an option.


Name three insights from industry experts for high-risk businesses?

1) Know your audience so you can create ideal offers — example: 89% of Millennial parents use coupons when planning their shopping, compared to just 78% of Millennials without children. 2) Make discounts/coupons easy to understand, or they are likely to be ignored. 3) Be willing to train staff on soft skills (such as communication skills) – this enhances customer experience and increases customer loyalty.

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Shane McLendon

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Customer focused

If we can't beat your current rates, we'll give you $500!*

We happily accept merchants processing any amount. Price guarantee for merchants processing $10,000 or more per month. Free terminals and other promotions depend on processing volume, credit and qualifications.

Customer focused

If we can't beat your current rates, we'll give you $500!*

We happily accept merchants processing any amount. Price guarantee for merchants processing $10,000 or more per month. Free terminals and other promotions depend on processing volume, credit and qualifications.