Merchant Services: Be the CEO of your own company

I have spent the last 14 years in sales. I have always treated my position like I am the CEO of my own company. But what does that mean? Well Like any business owner, I watch the numbers. I know where I am at every single day. I do not simply react; I proactively create situations to ensure my success. But you don’t know what you don’t know. Some people think it is counter intuitive to have a W2 position and treat it like it is your own business. If I was digging ditches, maybe, In sales, however, you are only as good as your numbers on the spreadsheet so you have to understand them.

Start off with the big stuff then break it down into daily behaviors. In the agent world, know what motivates you. The pat answer is money, but in reality its never money. Pull a dollar out of your wallet today and look at it. What does that dollar do for you? That dollar does Nothing for you directly. It is a piece of paper. It is what that money represents. Its freedom. Freedom from the stress of debt. Freedom to spend more time with your friends and Family, freedom to go places and experience life. Find your Passion, and see how your income helps you with that passion. You need to know how much money you need to make. That is one of the first things I ask people when they want to come on board and do business with me. The next step is to look at how to get there. I like to do waterfall analysis. I would sit down and help you figure out how many sales you need to do on a monthly basis to attain your income goals. Is it simply your trying to save up for a vacation? you want extra money to take your significant other out. Or do you want to buy a home? There is a way to get there, you just have to know the metrics. Once you know the number you can figure out how many sales you need to make to attain that goal.

This is where the Daily behaviors come in. If you look at it like an annual goal or even a monthly one, thats nice but it is only part of the puzzle. It is what you do every single day that will drive your success. You have to reduce it down to the ridiculous. This is where thinking like a CEO comes in.

CEO’s do not go out and knock on doors to make sales. They know their budgets at the start of the fiscal year. The form partnerships with strategic partners, hire the right people to execute the plan, then watch the numbers every day. When something begins to falter, they adjust it. Well how does an Individual do that? Without excess capital and resources how do you begin?

That is the key question.

1) Capital where do you get money?

Well you could have an angel investor, a bank loan, severance package, etc. With regards to merchant services it Typically comes from the Processor in the form of an Upfront bonus per sale. Because it is residual income most agent programs have an upfront bonus option available. Oh I know, I hear it every day, I don’t need a bonus, I just want a bigger residual split. Well fantastic! but the reality is if you do not have a liquid source of cash today (large portfolio, a capital investment, other source of income) most reps would bleed out without a bonus structure. It is how you pay sub agents. If you’re an office that 1099’s reps you almost certainly need some sort bonus program. If your large enough to pay that out your own residual base, congratulations, you are extremely successful and I applaud you. The majority of Agents need a bridge until their residuals build enough to sustain them, and that typically comes from the upfront bonus. When I do a waterfall financial analysis for someone, I always include the bonus, as the months in the analysis expand out to a full 12 months, their residual income begins to catch up to their Bonus income. Someone at the point who is making their income goals from just their residual might want to renegotiate their comp plan to be more back end loaded at point, which I will gladly do. It lowers the ROI on the deal and makes the profit come in line sooner with the current years business. In simple terms it makes business sense for us to do that.

2) Now that you have capital how much money do you need to make each month to cover your bills? How many sales do you need to make to attain those goals? Using this information you can begin to figure out your daily behaviors. From my experience this where the rubber meets the road. People will go out into the market cold and just start knocking on doors. I do not like this approach and quite frankly the most successful agents I know do not do this. What do they do? They build a solid network of referrals. But how? Remember how I said to think like a CEO?

3) Building your referral network is like a CEO hiring the right people. I never go in and just offer a fee for a referral . I know that does not always work. I like to build ongoing business relationships. If you’re going to ask for something for someone, what do they get in return? With me the referral agents’ know that every person I come into contact with that needs their services will get referred to them. For example, one of my best friends is the Finance manager at a Car dealership. If anyone needs a car I get them him his info, its simple. Several of my family and friends have made purchase from him, even the ones who live in different state. Does he pay me for that? No, He takes care of me if I need something with my car, or if someone he knows needs merchant services he refers to me. Since I do not sell merchant services directly in my position I send the lead to a local agent, It helps my friend out, my agent and me. It is a win-win across the board.

That sounds great, but I take it a step further. I ask my referral partners to commit to 1 referral a month, no more no less. I’m looking at them like a CEO looks at their employees. Each month Invite my referral team to a breakfast, coffee, bagels, etc. Do this early in the morning, before their day begins. You know what happens? This group of people begins to refer business to each other. I don’t charge them for it, and I’m bringing them tons of business, more business than the 1 deal a month they send me, what’s it cost them? That’s right, one deal a month. If they don’t provide that, I’m a CEO, I fire them, and they don’t get invited to the next meeting. Believe me there are always people calling, begging to get back in to the network. I say great just send me one deal a month. This is how I know exactly how many deals a month I’m going to write. If I need 10 deals a month to hit my goal, I have 10 referral sources. The y key piece to the commitment from your referral partner is to tie the referral down a specific date in which they have committed the deal by. This allows you to forecast your month and give a time frame to follow up by. It seems difficult to do this, but its not. You are a business owner and it lends legitimacy to your company. If one referral partner misses, I miss and they get fired. I also track it and keep a spread sheet, if you want to know how, become an agent with me and I will show you lol, because that kind of time investment means that you and I are doing business together!

Is this the only way to find prospective sales? Absolutely not! Am I perfect or know everything? I human and completely fallible, so there for no! In Fact I did not make this up, I learned it from a guy who built an ISO and sold his portfolio for 36x the monthly residual. I’ve just been lucky enough to deal with some extremely successful agents in this business’ listen to them. I definitely think this is a strong tool, but it is only one tool, and you have to use it every day. Don’t look for the easy fix or the home run, play the long game hedge your bets and have multiple sources of prospecting. There is no easy way to make it in this industry. Your Job is hard, but it is worth doing if you put in the work, be proactive, and make something happen. My job is to take the obstacles that are preventing you from making sales and growing your business.

If you have any questions or would like to discuss anything or even do business with me, please feel free to contact me!

Mike Gallagher

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Updated: June 30, 2014 — 9:08 am

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