Ease the Pain of Getting Paid

Manage, Start, featured — By Lyndi Thompson on December 16, 2011 at 6:54 pm

Your bright new studio is finally open. You wait at the reception desk for your first student to arrive. This young gal arrives with her mat, water bottle and a smile. I can imagine you having to hold yourself back from jumping up and exclaiming “Welcome!”. This student wants to try out your studio, and chooses to purchase 5 credits at your introductory price. Excellent. Now you need to accept her payment, but how?

Accepting Payments.

Cash: Keep a lockable security box handy well supplied with bills and coins to make change, aka petty cash. You can get these boxes at any office supply store, fancier ones you can find on Amazon. Be sure to choose a secure location to store the security box when no one is attending the reception desk. One draw back is making sure you have change, however adding a trip to the bank to your weekly schedule should keep this inconvenience to a minimum. Cash is always a form of tender you are going to have to wrestle with. Few studios have been able to smoothly get away from accepting cash, especially if they offer things like water, mat or towel that costs under $2.

Checks: The personal check often gets a bad reputation. However, for most businesses not accepting checks can be tough. Entrepreneur has some good tips on accepting checks. Also make sure you create a policy around checks and clearly communicate to your staff on how to deal with checks, especially around issues like refunds.

Gift Certificates: What could be better that a gift certificate for yoga? Nothing. Exactly. There are a couple of different ways you can go about issuing gift certificates, paper as well as ordering branded cards to be used like a credit card. There are benefits and draw backs to both methods. When selling a gift certificate you will need to record the purchase, and issue a fancy pretty gift certificate. When redeeming the certificate make sure it is the original. Remember to keep track of how many you’ve sold because you’ll need to service all those people! If you don’t want to get stuck servicing very old gift certificates then be sure to issue an expiration date, and let your employees know if there is a grace period past the expiration date.

Credit Cards: While there are some studios that get away with not accepting plastic, it can be an annoyance for your students if there are not other options like being able to purchase services online. If you sure you want to accept credit cards you have a Pandora’s box full of options. I say that with some seriousness as there are a lot of options. At face value you may be tempted to run with a credit card processor with the lowest transaction fee, be warned there maybe be other fees lurking like a monthly fee, or a credit card processing terminal rental fee. Too many studios get lured into a low transaction fee only to experience additional fees later on, so keep of you choose to go the route of accepting credit cards be sure to look at your credit card processor’s statements for the first few months. You’ll want to keep a close eye out for those additional fees.

The biggest fees come from running American Express cards or rewards cards through your system. And also be warned that if you are a new business you will be paying a higher transaction fee than your neighbor next door who has been in business for 10 years. You’re just higher risk because you’re a new studio, and that’s the reason for the difference in transaction fees. However, in due time as you generate more volume you should be able to renegotiate your rates, which is why its a good thing to not get locked into a long term contract, one that is more than a 6 months to 1 year.

There are even a few options available that will allow you to record a student’s credit card number, freeing up your student from ever having to bring in their wallet. This makes it easier to do automatic billing for an unlimited membership, but you’ll still need to get the student’s permission to charge their credit card periodically.

Work Trade: The first few years of a studio can be tight on the budget. One easy way to put a smile on your face as well as a student is doing a work trade. You can create a policy for your students to do a work trade for various things around the studio. Trading man hours for yoga classes can be great. However, managing volunteers can be tough and time consuming, so be sure to set clear expectations for the role. A lot of studios create a step-by-step guide of what exactly needs to be done before and after each class (wipe down mirrors, clean mats, check bathrooms, etc.). Having this guide makes it easy for people to finish their tasks without you having to train each one and check up on them.

Online Payments: If you haven’t already created a website for your business add that to the top of your priority list. Offering a way for students to purchase services on your website will not only give you techie bonus points but it will give you and your students a smile for convenience. Just think your sleepy, but loyal student remembers that they want to attend your Yoga for Runners event happening tomorrow afternoon, but alas your studio is closed for the evening and they want in! Oh! There is hope, they can go to your website, select the Yoga for Runners class and pay for it online. Perfecto! Like options for credit cards, online payments can be complex and sometimes overwhelming. A good and safe place to start is PayPal, which is secure, easy to use and very flexible. It makes it easy for your students to pay you from anywhere, and for you to collect funds anytime.

Congratulations again on your new studio! Accepting payments can sometimes seem like a daunting and a bit unfriendly to the non-technical person, however there are simple ways to get paid and keep your students smiling. Have questions about anything I talked about above? Leave a comment or send me an email.

BizeeBee's Marketing Buzz Bee. She loves working with yoga, fitness and small business professionals to help find simple solutions to managing their business. Find Lyndi tweeting at @BizeeBee. For more information about BizeeBee visit BizeeBee.com.