As an ISO owner, merchant level salesperson or other professional in the multifaceted payments and fintech sphere, one of the scariest things that can happen is a sudden, dramatic drop in residuals. Whether it's due to unexpected expenses, a loss of clients, an economic downturn or a pandemic, a sudden slump in revenue can be overwhelming. But when this occurs, quick, decisive action can get your business back on track.
First, it's important to evaluate the cause of the sudden income drop. You may have a hunch about the reason that turns out to be correct, but don't implement remedial steps until you've put assumptions aside and examined the situation and identified the cause or causes. These can be external, like an overall economic downturn, or they could be internal, for example, health or relationships issues affecting in-house performance.
With the cause clearly in mind you can analyze your financial statements, budget, cost of capital, cash flow, and other financial data to identify areas that need improvement. This isn't just about knowing your sales revenue and profits; it is more about knowing where your money comes from, where it goes and how to manage it efficiently.
With this information in hand, you can cut unnecessary expenses such as services you're paying for but no longer use. You could also examine your utility usage to see if you can reduce consumption or find less expensive options. You also might be able to negotiate with suppliers and partners to see if you can get better deals without compromising the quality of your product offerings.
Another area ripe for modification is your product and service offerings and pricing strategy. When prices are too low, you may miss out on potential revenue, but if prices are too high, customers may be deterred by the high price tag. You might find you are stuck with outmoded offerings and pricing that aren't as appealing as they used to be. It's a matter of balance. Research what's working best in the market and see what you can upgrade without increasing costs.
Remember that mastering and serving a particular vertical has advantages, but businesses that rely on a single product or service are highly vulnerable to market fluctuations, changes in consumer preferences and changes in technology. Diversifying your offerings typically creates new revenue streams. You can also expand your customer base through targeted marketing campaigns that involve a combination of social media, email marketing and advertising in key industry publications.
Even with remedial measures in place, you may need a temporary loan or a line of credit to cover expenses for a time. You might already partner with one of our industry's alternative funding providers. If not, you know where to find them.
And once things are stable, come up with a new plan for long-term sustainability and financial stability. This will, of course, need to change from time to time, but it will allow you to have a clear vision of your future and the steps you need to take to achieve your goals. 
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