The cash-only business isn’t dead, and there are many entrepreneurs with ideas on how to revitalize old cash-only models or introduce new ones. Cash-only operations come with numerous benefits, but disadvantages also exist.
As with most business types, you will need to examine the potential risks against the potential rewards. Here are a few things to know about cash-only businesses, and a few important ways entrepreneurs who use this business method can protect their cash assets.
It’s true that cash-only businesses have become rarer over time, but they’re still around and still beneficial to those who would like to run them. Just as the name implies, a cash-only business is one that only accepts cash as payment for goods or services.
Some of the more well-known types of cash-only businesses include laundromats, street vendors, food trucks, vending machines, and services performed by a single individual. For example, a babysitter, repair person, or someone who does lawn care might require cash payments.
Still, even these businesses and services typically accept other forms of payment, as payment processing has become more ubiquitous. The laundromat washers or vending machines may now have a slot to swipe a card. A babysitter or lawn care person may have a smartphone app that allows them to accept payments digitally.
Outside of the more traditional cash-only type businesses, there are some businesses that specifically choose cash only for their own reasons. You may find yourself at a coffee shop or bakery that will only take cash.
This means most cash-only businesses choose cash as the only payment method, not because they must, but because they want to. But why would a business choose cash only when there are several options for payment processing available to them?
Someone may choose a cash-only business model for several reasons, but there are quite a few benefits to running a cash-only business that illustrate why someone may want to consider using this method. To start with, you will receive payments upfront and immediately.
When cash exchanges hands, that’s it:
- You don’t need to wait for something to process.
- You don’t need to pay a fee to make the transaction.
- You don’t have to worry about various types of fraud.
- You will enjoy lower costs because you won’t need to deal with all the overhead associated with payment processing.
- You will not have to pay to rent or to own the equipment needed to process payments.
In addition, cash simplifies accounting in a variety of ways.
Cash-only businesses present some challenges. A lot of the disadvantages will depend on the business and the attitude toward the cash-only model of consumers. For example, some people expect certain businesses to have a cash-only model, and they typically have no trouble with that fact, because it’s the norm.
However, some people will balk at a cash-only model if it’s for a business that they feel should have other payment options. It’s possible to lock out potential customers or clientele by only accepting cash. It’s up to the entrepreneur to figure out if going cash-only will give them the most benefit or if they should implement additional payment methods.
Having cash on hand makes a business a prime target for thieves and would-be thieves. A business that collects cash all day will likely have a lot in the register or elsewhere on the premises at any given time.
Vendors who only accept cash outside of a brick-and-mortar property may have a lot of cash literally on their person. In addition, when it’s time to drop cash off at a bank, you will find yourself out in the open with a ton of money as you transport it from one location to another.
These days, you can make use of various types of cash monitoring systems and things like smart safes. You can use technology and implementation of a cash management system. A cash-only business can still make excellent use of a plethora of digital options to help manage the cash.
Additionally, security guard services work well for cash-only businesses. For when it’s time to move or transport cash, it can help to have security around to make sure the process goes smoothly.
Having a visible security system in place will also go a long way toward keeping thieves at bay and keeping employees honest. Placing cash in a secure location on the premises with access controls will also help to ensure the safety of the cash.
Protecting the cash is an important aspect of running a cash-only business. For entrepreneurs who want to run multiple businesses of this type, having a cash management and protection system that can work at all locations will help ensure they receive all the benefits of this business model without worrying about some of the risks that come with it.