CrossCheck Blog

CrossCheck Blog

Check Processing & Payments Information

No-Cost Check Processing Equipment and Starbucks Coffee

Posted by Tom Lombardo | Fri, Jul 18, 2014 @ 10:00 AM

Retailers interested in maximizing their profits to build their business and personal wealth can learn a great deal by comparing Milton, a befuddled and ultimately pathological stapler-wielding clerk in Mike Judge’s iconoclastic workplace comedy Office Space, to Howard Schultz, the self-made billionaire who founded Starbucks.

Secrets of Wealth

Free Check Processing EquipmentBoth know what it’s like to be poor. Milton kept working even after they stopped paying him (more on that in a moment), while Schultz was born into poverty in New York. Working your way out of poverty requires many of the same skills needed for successful business development, and Schultz discovered three major secrets of wealth early in his life: First, he took excellent care of his physical health by playing sports, and while not of professional caliber he out-performed most of his peers.

Which brings us to the second secret: do more than your job requires. Wealthy people put their heart into their work not just because they want the rewards, but because that’s their approach to life. Schultz’ efforts on the field earned him a sports scholarship to college, making him the first person in his family to attend. Milton, on the other hand, was mostly concerned with listening to his radio “at a reasonable level” while he performed a job that no one could define.

Schultz discovered the coffee business shortly after college and on a coffee buying trip to Italy he had his entrepreneurial epiphany when he saw espresso cafés on practically every corner.  Not long after returning and even when his wife was pregnant – a situation most people handle by eliminating risk -- Schultz managed to inspire venture capitalists to invest hundreds of thousands in his vision that we know today as Starbucks.

Schultz Defines an Excellent Business Goal

Wealthy people know their goals – many carry a list with them – and they focus on them and stick to them, Retail store owners and managers may have a vague goal about “increasing profits” but when wealthy people set goals they do so in a more precise, action-oriented fashion: “Maximize return on three business-critical services this quarter.” Milton’s main goal, on the other hand, was to keep his Swingline stapler, which he hugged to his chest every time a co-worker confronted him.

No Cost Check Processing EquipmentSchultz was known for his intense focus on controlling costs so he could grow his business. To do that, you need to truly understand where your bottom line comes from. Each expenditure ought to be scrutinized so you can either justify it or find improvements. Milton, on the other hand, was so inconsequential that management kept downgrading his work area until he was sitting in a storage room.

Payment processing might be an area easily overlooked when trying to do this. But it’s critical. If you have a 5% profit margin and you are stuck with a $1,000 bad check, for example, you’ll need to make about $20,000 in additional sales to recover that loss. That’s the justification for a check guarantee service, but since there’s more than one, part of your decision-making process ought to involve calculating the return you can expect from that service.

Cost Analysis Like Starbuck’s

Let’s say two different providers could each protect you from that bad check, saving you from that $20,000 hassle. And let’s say their fees are comparable.

But one of them requires you to purchase your check processing equipment, roughly about $500 per unit, and the other provides you with no-cost loaner equipment. What if you have 10 or 20 locations? That’s $5k - $10k just for the equipment to take check payments.

No Cost Check ImagerRight off the bat, the second service is the one to beat, right? Before we leap to that conclusion let’s give Milton his due and learn a lesson from him, too.

Why was he so obsessed with his stapler? Because the Swingline, which has been around since 1939, is considered one of those great designs that blends form and functionality so perfectly there’s little room for improvement. Whatever his shortcomings, Milton understood quality.

So you’ll want to make sure that the no-cost, loaner check processing equipment is going to work. You’d want one whose design arose from dozens of interviews with a wide variety of business owners and financial institutions so you’ll know that it will perform when needed, such as the no-cost equipment we provide.

Getting to Know Your Bottom Line

That means if you pay for one terminal, your return on investment might be half of what it could have been. If you need more than one terminal, your return may rapidly drop to Milton-like levels of performance. Now, when they stopped paying Milton, it took him a while to figure it out, but when he did…well, we don’t want to spoil the movie. Let’s just say it was explosive.

Rather than head for a similar eruption, take one more play from Schultz. Like most wealthy people, he never pays more than he needs to.

Why should you? Learn more here. 

check terminal, check processing equipment

Topics: Electronic Check Processing

Written by Tom Lombardo