Technology is one of the most efficient and affordable ways to optimize your business. The marriage between finance and technology, commonly referred to as fin-tech, is introducing a world of possibilities for small business owners.

The Red Door Capital Group has been actively documenting the fin-tech landscape. Check out the first article in our Fin-Tech Business Series: How Mobile Technology Can Help Your Company Grow.

Financial technology is expanding rapidly and adding tremendous value to entrepreneurs and small businesses everywhere. In the following article, we discuss five reasons why fin-tech should be on every small business owner’s radar.

1. Fin-tech services improve the operations of small businesses.

Technology has improved many processes for small businesses, including accounting, payments and customer service. Fin-tech services expand on those innovations by offering existing financial services at lower costs and through unique tech-driven solutions.

In other words, financial technology is making it even easier for your business to manage its dollars and cents.

Fin-tech applications are enabling businesses to accept mobile payments and launch mobile applications targeting more customers than ever before. This not only gives consumers more ways to pay, it enhances their user experience.

Accounting services are also making it easier for businesses to process payments on time and cut down on Days Sales Outstanding (DSO), which essentially refers to the number of days you have to wait to get paid for a product or service you already delivered.

2. Fin-tech is more affordable than ever before.

Due to constant innovation, fin-tech tools and applications are more accessible than ever before. If you’re a small business owner, fin-tech adoption isn’t a massive capital project. Fin-tech applications are challenging traditional banks and service providers by offering simplified payment processing tools. They are also offering easy-to-use software that reduces the need to hire and retain expensive in-house staff.

A platform like Shopify is an example of the potential cost savings associated with fin-tech adoption. Rather than spend thousands of dollars on web developers and payment processors, Shopify offers a one-stop shop for e-commerce. The platform allows small businesses to process credit card transactions directly on your  website. It also allows you to automatically sync your Shopify sales with QuickBooks, a powerful software platform for small businesses.

To learn more about automating your small business, read Ten ways to Automate Your Small Business for Maximum Efficiency. The article introduces you to platforms like YayPay, which automates your entire accounts receivable department.

3. Fin-tech can help small businesses collect more meaningful data.

As social media continues to grow, businesses are struggling to contain the data explosion. If you have even a decent online presence, your business is probably generating a deluge of data about customers, website traffic, sales and other important information.

Ever thought about what you can do with that data?

Fin-tech is helping businesses convert their massive volumes of data into facts they can use. They do this by creating big data tools that analyze patterns and trends about your customers. This includes a rich analysis about their interests and buying habits.

There’s a ton of big data service providers out there. Companies like ClearStory Data and InsightSquared can both be used to drive business intelligence.  When all else fails, there’s always Google Analytics.

In a recent article, we advised online business owners to go where the demand is. Big data tools help reveal important patterns about your end market that can be used for selling, up-selling and special offers.

4. Fin-tech offers new funding opportunities.

If you’re a startup, traditional funding streams aren’t always possible until your business has established a solid track record of growth and revenue. Fin-tech has unleashed the fundraising platforms like crowdfunding, which refers to the practice of funding a project or company from a large number of people. One of the most prominent examples is Kickstarter, which is increasingly seen as a viable route for initial business financing.

If you’re further along in your business or looking for a more secure way of obtaining financing, you should check out Red Door Capital’s financing solutions. We help entrepreneurs and small business owners tap into traditional and emerging funding solutions to finance their essential business needs as well as the next phase of their growth and expansion.

Are traditional loans hurting your non-traditional lending needs? Red Door Capital can help. Check out our specialty financing services to learn more about alternative financing.

5. Fin-tech picks up where traditional service providers left off.

Whether it’s small payments, financial data or even investments, fin-tech is going above and beyond traditional service providers. If you’re looking for a competitive edge in today’s market, it may not be available at your traditional brick and mortar service providers.

That’s why it’s so important for business owners to constantly monitor the fin-tech landscape. Technology is evolving rapidly, and with that evolution comes potential reward for first adopters.

In the last five years alone, the small business landscape has been transformed by cloud computing, social media, mobile technology and fin-tech. In the next five years, automation and AI are expected to be the next major drivers of the business world.

As small businesses become leaner and more tech-driven, fin-tech offers a scalable solution for meeting all your accounting, marketing and payment processing needs.

At Red Door Capital, we’re committed to providing our audience with all the resources they need to succeed in their small business venture. Be sure to bookmark our blog or sign up for our exclusive newsletter to get the latest articles sent directly to your inbox.

 

Sources

BankInnovation.net (December 21, 2016). “5 Reasons Small Business Owners Need to Follow Fintech in 2017.”

Deborah Sweeney (February 22, 2017). “What is FinTech and What Does it Mean for Small Businesses?” Business.com.