Month: November 2019

Categories
Blog Business Managing Your Business

The Future of Digital Payments 

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We are living in an increasingly digital world. Transactions that took hours to complete a few decades ago can now be wrapped up in minutes. This trend has resulted in tremendous growth that is driven by money transfers, cross-border remittances and digital payments.

There are new challenges and realities now that we have a worldwide digital payment market:

  • We must serve a global consumer base.
  • We must negotiate different regulatory and licensing bodies across the world.
  • We must educate our consumers on the safety of digital payments.

What can you do to prepare your business?

Embrace Underserved Consumers: A Global Opportunity

Even if consumers don’t have access to a computer — and let’s face it, most of them do via work, libraries, etc. — most have a smartphone to log on to the internet. Researchers predict that by 2025, underserved and underdeveloped markets will grow 75% faster than already developed markets. Business owners would be crazy not to take advantage of this opportunity!

Serving a different community will, of course, mean that you will have to make some changes to your business. It will also mean that you must get creative to come up with innovative solutions for your new consumers. Thinking globally means many more opportunities to make a profit.

As you begin to plan your next quarter, or indeed start planning for 2020, try thinking about your business with a global mindset. What new challenges might arise? How will you acquire new customers and then give them what they want? How can you use an already established product in a new and useful way?

Compliance is an Investment (Not an expense)

OK, so you decide to enter the global arena — now it’s time to invest in your company’s licensing and regulatory compliance. Yes, licensing can take up time, resources and money, but it’s worth it if it means access to a broader customer base that needs your expertise and products.

Each state or country has different rules and regulations. For best results, invest in a full-time compliance team. Your area of proficiency is probably not dealing with regulatory agencies, so hire someone who knows what they’re doing. It will speed up the process so you can move forward with expanding your business.

We all know what happens when Facebook is down or Twitter crashes — people panic. Now, imagine that your business was somehow tied to these websites. Not good. If your products or services are dependent upon someone else’s technology, then you are not in control. What’s the solution? Invest in your own flexible platform. Third-party products and services can be integrated into your platform if need be, but don’t forget to build to meet the needs of the global user. When other companies are scrambling because they are at the mercy of their tech suppliers, you will have your custom payment platform ready to go!

Being flexible and ready for the changes that the global market will inevitably present doesn’t make your business invincible, but it does mean that you are prepared to pivot and adapt when you need to.

Categories
Blog Business Growth & Capital Managing Your Business

How to Grow Your Small Business while Preserving Company Culture

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As your business grows, it’s crucial to preserve the elements of your company culture that you and your employees value. Here are some ideas of how you can do this.

Stick to Your Values

Write down your company values and make sure each employee has a copy of them. They should also be displayed prominently throughout your business location. Then, identify a few long-time key staff members who “live” or personify those values. These key people are your “culture champions,” and they can be helpful in multiple areas — from hiring to sounding the alarm if the business goes off course. These champions should be very visible within your organization so that everyone knows that the way these people do business is the way everyone should do business. However, this doesn’t mean that everyone has to be clones of everyone else! Rather, there are essential values within your business that everyone should uphold.

Hiring is Incredibly Important

As businesses grow, hiring can become a real challenge. In a rush to get more people on your team, you may hire someone who just doesn’t “fit.” It’s important not to compromise on your culture and values in a rush to fill new roles. If necessary, you can outsource part of the hiring process to a recruiter who can narrow down the field for you, and then you and your team can make the final hiring decisions.

Stay Interviews

You’ve likely heard of exit interviews, but how many “stay” interviews have you conducted? None? Well, it’s time to start! Staff turnover is detrimental to business success. It costs time and money, and you often lose a great employee. But if you are conducting stay interviews at least once a year, you can reduce employee turnover and even boost employee happiness. Check-ins are used to gather feedback on areas that can be improved, and they also show your employees that it’s important to you that their voices be heard. Better still, stay interviews can improve the employee experience over time because issues get resolved more quickly and with less drama.

Feeling Like a Team

Another reason that company culture is so important is camaraderie. Staff members who feel connected to their co-workers and feel like everyone is working for the good of the business are much more likely to plan a long-term future with the company.

Establishing a great workplace early on and then continuing to put your culture first as the company grows will help you avoid the growing pains that many businesses fail to navigate. 

Categories
Blog Business Personal

Where Do Recessions Come From?

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Recession. Even the word can be scary to some people. But what if the mystery was taken out of how recessions happen? The causes of a recession are easy to identify and are anything but random.

The Credit Cycle

Scenario:

A person makes $100,000 a year and needs a loan.

They approach a bank that loans them $10,000.

That money then goes into the economy and becomes someone else’s $110,000 income.

Then, the person who makes $110,000 a year and needs a loan.

They approach a bank that loans them $20,000.

That money then goes into the economy and becomes someone else’s $130,000 income.

Then the person who is making $130,000 a year needs a loan … you get the picture.

At some point, all of this borrowing and lending will hit a natural limit. That’s when the Federal Reserve steps in. The Federal Reserve tracks this cycle. It raises interest rates when they become too low, when people and banks are being too aggressive with borrowing and loaning, and when people are receiving loans who shouldn’t be.

Higher interest rates cause higher payments on debt that many people cannot afford. Banks will no longer give as many loans because people will no longer qualify at the higher interest rate. In a nutshell, higher interest rates mean that a much smaller pool of people can borrow money.

Being rejected for a loan is a big problem for people who now can’t borrow to refinance something that they already spent money on. In some cases, people will lose their homes, have to file for bankruptcy, etc. These people are no longer spending money and contributing to the economy on the same scale as they did in the past.

At this point, the cycle begins to go the other way: 

Someone’s $140,000 a year job disappears, and there’s only a $125,000 job to replace it. Then that job disappears, and there’s only a $110,000 job in its place, and so on.

People who lose their jobs and can’t find another one spend less money, which means someone else isn’t making their usual income. Eventually, they too may lose their job or go out of business. The cycle winds down until we end up in a recession

Recession and the Stock Market

A recession has a massive impact on the stock market. Why? A recession winds down both personal and corporate income.

When people are buying less, then there is less revenue in corporations that haven’t yet adjusted their cost structure. These corporations stop making money. Some even fail and go bankrupt.

When growth is once again under control, the Federal Reserve lowers interest rates. And the cycle starts over! 

What This Means For You

First, you can take comfort that Pinnacle Bank is a responsible and knowledgeable bank. We pride ourselves on the guidance we give to everyone who banks with us and encourage our patrons to make conscientious decisions with their money.

Finally, a recession can mean an opportunity to buy stock “on sale.” When the market rebounds, your investments will become profitable.