Seattle, April 7, 2010 -- Dan Price fine tuned his talent for entrepreneurship at a very young age. While in high school in Nampa, Idaho, his knack for business and love of music harmonized well as he played the roles of manager and bassist for his band, Straightforward. Despite inroads towards success with the band, Dan chose to avoid a future as a starving artist. He switched paths of employment and worked as a payment processing consultant to local mom and pop businesses. Dan noticed many problems with the way small merchants were sold credit card processing services. Small business owners were subject to unfair rates and sales practices in an industry that caters to high-volume merchants. There needed to be more affordable alternatives.
In 2003, Dan moved to Washington to attend Seattle Pacific University. In 2004 while still a freshman at SPU, Dan decided to start a business that would level the playing field in the payment processing industry. He scraped together startup money to co-found Gravity Payments with the help of his older brother Lucas. From his dorm room, Dan acted as the sole marketer, CEO, and operations manager, while his brother Lucas worked on the technical and financial aspects of the business. Dan tackled the daunting business start-up challenge while living as a starving student in college. He took mostly night classes to progress towards his major to be free during prime daytime hours for activities focused on the burgeoning business.
The Gravity Payments business model was fashioned to create a value-added essential service. “Dan devised a way to price credit card processing services at about half the cost of competitors while still being profitable, to eliminate hidden fees for merchants, to offer complete transparency of business practices thru an "open book" policy for all customers, and to provide personal account representatives for each customer,” said Calvin Goings SBA Regional Administrator. Clients are given access to cell phone numbers for problems or questions that arise at any time - a commitment to customer service not found among competitors.
During Gravity Payment’s first 18 months, the company reinvested every dime earned back to develop technology, to expand staff and to contribute to growth. Dan forfeited personal income. His frugal lifestyle and the generosity of family, friends, and appreciative customers helped Dan to survive the initial scarcity phase. Dan added 25 to 35 new Gravity Payment customers per month and he achieved marginal profitability in his second year of operations. When restaurants and retailers were hit hard by the recession in 2009, many merchant credit card transactions plummeted, evaporating 20 percent of Gravity's revenue stream in a short period of time. To fill this gap without layoffs, Dan took an 80 percent pay cut, started living off his savings, and began cold call marketing to more restaurants, retailers and service businesses. As a result, during the recession the company managed to increase its profit margin by 50 percent.
Gravity Payments’ customer base has grown over 100 percent annually, and its staff has grown from two to more than 45 employees in the 5 years since inception. It recently surpassed Columbia Bank as the largest processor in Washington state. It now has over 4,000 customers throughout the country. The average customer turnover rate - those who fail to renew - in the industry is 25 percent whereas Gravity Payments loses less than five percent of its customers each year. Gravity Payments processes over $1.5 billion in transactions every year and is one of the fastest growing small businesses in the U.S. The biggest challenge for this company is to manage future dramatic growth while still maintaining the core values that has made it such a dynamic force in the credit card processing industry.
Due to Gravity Payments' ability to save merchants money, it has an indirect hand in creating growth potential for small businesses, leading to employment opportunities in the community as well. Social responsibility is not just a buzzword at the company. It gives back through charitable contributions that reflect the company's values. Through its charitable "Gravity Gives" program, Gravity Payments designates 10 percent of its annual profit to organizations that focus on air quality initiatives, services for needy families and children, and global poverty. Some recipients include the Fred Hutchinson Cancer Research Center, World Vision and Northwest Harvest.
“It was recently announced that Dan was awarded National Young Entrepreneur of the Year, by the U.S. Small Business Administration,” said Nancy Porzio, SBA Seattle District Director. “Business owners are impressive at any age when they build companies that stand out among the competition the way that Gravity Payments does. That someone in his twenties has built a company that plays a vital part in keeping small businesses open and profitable, and helping them to thrive is even more incredible”, added Porzio. Seattle District is proud to have Dan Price, Gravity Payments, Seattle, WA honored as our National Winner in ceremonies in Washington DC this May. For more information, visit www.gravitypayments.com .
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information: bankcardlife.com?orid=33533&opid=1 .
Source: Company press release.
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