Budget Your Business

Business Owner: Payment Processing 101: How PJ Gallagher Owns and Runs a Successful Payments Business

• Scott Geller • Season 1 • Episode 43

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E#43: In this episode, I sit down solo to break down the world of payment processing with a behind-the-scenes look at PJ’s business. We dive into why 80–85% of small and medium-sized business revenue now comes through credit and debit cards, and what that really costs owners — roughly 3% per transaction. From interchange fees to integration with QuickBooks, NetSuite, and other systems, we cover the tech, the process, and the real-world considerations every business owner should know.

But it’s not all numbers. PJ shares how his approach to service sets his business apart from the big, impersonal processors — quick response times, real human support, and building trust with clients. 

We also talk about his ownership approach to financial decision-making, balancing budgets with gut feel, taking risks, and how he navigates growth and staffing in a rapidly changing environment. Finally, we touch on the role of silent partners, what makes a partnership work (or fail), and lessons learned from growing a business from the ground up. 

Book Recommendation: Radical Candor

Podcast Recommendation: All In Podcast

Find out more about PJ Gallagher: 

www.reliablepayments.com 

https://www.linkedin.com/in/patrick-gallagher-eta-cpp-2830ab1/


Find more episodes on Apple podcast, Spotify, Amazon Music and here: https://budgetyourbusinesspodcast.buzzsprout.com/

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Speaker 1:

It's enormous. So yeah, it's it's a it but we also tell people this is a decision that you make. We're not gonna push you on it. We're gonna lay it in front of you. But this is up to you and your relationship with your customers. And if you don't feel comfortable doing it, totally fine. We can help you out without surcharging. We can save you money still, but there's a lot of savings over here if you want to do it, and we'll help you do it the right way. But it is significant savings, and and the people who make that decision generally stick with it.

Speaker:

Hello and welcome to budget your business, the podcast for small business owners who want to learn how to financially plan for every aspect of their business. I'm your host, Scott Geller. Today I'm joined by PJ Gallagher, business owner of reliable payments, to talk about his business ownership as well as payment processing. Welcome, PJ. Sure. For folks who are meeting you for the first time, why don't you share a little bit about who you are and what you do?

Speaker 1:

Yeah, perfect. Thank you. Yeah. First and foremost, I am a husband and father. It's the greatest uh greatest thing about my life. It's my best accomplishment. It's the thing that makes me most proud. But aside from that, I own and operate uh reliable payments. We're based here in uh Richmond, Virginia. We are a payment processing company. So businesses that need to accept credit cards from their clients, we set them up with the technology to do that. So we spend most of our days working with business owners that are presently accepting credit cards, making sure that what they have is the right tools for their business, making sure they're doing that in an economical fashion, making sure they're doing their best to keep money coming inbound and not as much money going outbound. And then also making sure they have industry-leading support. Everybody talks about it in the world, but a local company can provide a service unlike any large national corporation, and we take pride in that. Thank you. And we're to we're to talk about how you run reliable payments as a business owner. But first I thought we'd start off with a little bit about the business for reliable payments. And as you mentioned, you're you're a payment processor for small businesses. Most people they run a credit card and never really think about what happens on the other side. It just kind of happens, right? But something is going on back there. So maybe you could start with what is happening? Like what is actually getting those credit cards processed? Yeah, sure. So, you know, uh when I started this business about 15 years ago, I think the I think the line we were using then was like 75% of all, uh, or it might have been 65% of all businesses or all business revenue comes in the form of credit cards. And five years before that, it was something like 50%. So we went through this rapid growth where all of a sudden business owners recognize that majority of the revenue comes from accepting credit cards. And nowadays, though, that number those numbers for most small and medium-sized businesses is closer to 80 to 85%. So, you know, for you know, obviously you've got industries that don't that don't take credit cards, but for the most part, if you take most businesses these days, about 80 to 85 percent of all revenue is coming in the form of a credit card or debit card. What people sometimes don't recognize um is that that costs business owners money. And generally we say that the the number, the easy number is like 3%, somewhere between 2 and 3%, but 3% is about the fair number. So all businesses that accept credit cards, about 3% of their money instantly goes out the door just to accept those funds. You take that back to a check or a or a or a or cash, they don't have to pay that money. So now 85% of your revenue these days is going to cost you three percent to accept. The reason why it does that is that card-issuing banks, brand with one of the big card brands, Visa MasterCard. So let's take a Capital One, um Sapphire, Chase Sapphire, stuff like that. They have a brand of either Visa MasterCard or American Express's own world, and they charge businesses what we call interchange. And interchange is the the type of card. So you've got your debit card, your personal credit card, your high value rewards card, you've got your Amex, you got your business card and your purchasing card, all these different types of cards. I mean, literally, there's 350 different cards on the interchange chart, and each one has its own rate. And they arrange, generally speaking, taking off the outliers. They generally fall in the ballpark of like 1.8 to 2.8%. And then there's all other fees, Visa, MasterCard take their fees. We we have our processing fees that go along with it. So that all tallies up to about 3%. And what happens is you process that credit card, it goes to the bank, the issuing bank, let's say Capital One. Capital One says, yes, they have money or or they have uh they have a credit available on this card. We approve this transaction. That happens instantly. At the end of the day, the business batches those transactions out. The card issuing bank sends that off through the um through the NACA file, through the ACH world and in the through the Fed. The money is moved from the consumers or the the business's bank account to the other business's bank account. And so all that money um is moved by a bunch of different hands, and that costs money. And so um of that 3%, the lion's share of it goes to the card issuing bank. So think about it. You spend $1,000 on your credit card, um, you're getting whatever interest rate you're paying to spend that money. So Capital One, they're making out like bandits here. They're getting their, let's say, 10% on that $1,000 you have sitting in your in your in your balance. They're also charging the business owner two and a half, three percent to process that payment. So they're getting money on both sides of it, and business owners need to have a method in which to collect those payments. So if you're at a retail store, either you need a handheld terminal or you need a uh the ability to invoice somebody or have it through website. And so we sit down with businesses and say, all right, what is the technology that you need that allows you to accept as many payments as possible, as painlessly as possible, for your business, and we set them up with the tools to do that. Interesting. I I take you you you've you you said that before because that came as a great explanation, even more than I was expecting. I know, I know. I go along, I and that was me trying to be brief. Understood. Yeah. A lot of times I ask our guests, how does a business implement XYZ or or how do they start XYZ? And in this case, I mean, credit cards have been around not forever, but for a long time. So maybe there's new businesses that are just coming on board and getting started with credit credit cards. So maybe my question should change a little bit of not just how they should get started, but how maybe how do they change a process? A business that's looking to change credit card processing, right? Right. So what we battle against, what we compete against is is, you know, in that instance, if you don't know and you need to switch, most people will call their bank, right? And so we have a relationship with a handful of banks, and so we're hopeful that you happen to reach your banking with one of our banks. And the bank will say, yep, we've got our partner reliable payments, they'll take care of you. But generally speaking, people go to the banks or they ask around to other business owners. I I generally uh would suggest people do not do internet search because the people who can land on while we will land on the top of the list for a couple of the Google sources searches for the Virginia area, um, so will a bunch of other guys. And those people who have unlimited budgets to put their name at the top of the list to provide all the all the all the stars and all the everything else that goes along with it, they're generally doing that because they can buy your business and they don't necessarily want to earn your business. So I encourage people to ask other people that they know and they trust. Who do you work with in the area? Who do you know that takes care of this and go by word of mouth? Um and and make sure you get paired up with somebody that that has longevity, has a presence, and that there's a face that you can be matched up with. Because there are a lot of big companies that do this. We compete against them all day long, and they're very good to be multi-billion dollar corporations. They've got to be good at what they do, but they don't care about the small individual business owner like a relationship can. And so I urge people to find people through somebody else they know that comes with word of mouth with a good recommendation. Okay. And how long does that process really usually take? Yeah, it can be. Um, we can generally turn around a merchant ID with technology in 24 to 48 hours. So it can go very quickly, right? It's generally at the merchant speed. I hear my my sales guys will tell you that I always want it to be quicker. Um, but we have real life, right? With it comes the application process, which is not terribly intensive. It takes 15, 20 minutes to fill out the application. We normally require some supporting documentation because at the end of the day, you need to be approved. We're we're we're bound by the um by the um by the Patriot Act. Um, so we have to run through people through Patriot Act testing to make sure you're not affiliated with any drug cartels, any foreign terrorist organizations. That's legitimately things we have to check for and make sure people aren't on any of the any of those lists, and make sure they're generally speaking somebody that that has decent credit. Now we have plenty of people that have bankruptcy, bankruptcies in their past, but they're supporting documentation that have to go into it because at the end of the day, our processing banks are taking a risk by providing funds to these businesses. And if there are fraudulent activity going on, the chargebacks that come from that, the disputes, sometimes don't come for weeks or months after the fact. And if somebody were to run a bunch of transactions and then skip town, it's on the bank to find that money. So there is an application process that needs to be done. There is an approval. People sometimes really give us a hard time because we need to see bank statements for really large businesses. We need to see that there's bank and their money. Um we need to see if you're processing a million dollars a month, that's a huge risk for any bank to undertake. And so we need to be sure that this is a true, legitimate business. So the application process, generally speaking, is hey, fill out this application, provide us supporting documentation. Most of the time it's just one or two recent processing statements. But if you have a little bit more robust business or you have some future delivery type products, custom products, high average ticket, there's a little bit more risk involved in that for disputes, for chargebacks. And so they may want to see what the contract looks like, what the refund policy is, and all that stuff so they can understand and underwrite the underwrite the merchant accordingly. But generally speaking, if the if the business owner is able to provide us that information uh in a day, we can have a turnaround within 24 to 48 hours. Um, and once that's done, it's a matter of sitting down and saying, all right, what do we need to do to train your people to accept these payments? Most of the time it's pretty simple. We can sit there in 15 minutes, show you how to do it. Uh, we're not rewriting um, you know, the dictionary here. It's pretty straightforward and saying, hey, here's you click this button, you type in this information here, and go. So we can have people up and running in in two to three days. Um, it just depends on the complexity of the deal. But very rare, very rarely is um the process much longer than that. Okay. And does this feed into, I mean, all every business has their own systems. QuickBooks, Zero, front office, back office systems. Yeah, does your data like work or or does your processes and and data kind of feed into and and interact with other systems within the business? Yeah, so it depends on the business's needs and the technology they have. So we have technology that integrates with uh QuickBooks, for example. We have an option, we have the ability to integrate into Netsuite, into zero. It depends, though, on the need and and and the complexity because those technologies are a little bit more complex. And we have a business, we have businesses that use QuickBooks for everything they do, but they don't need to track you know 10,000 transactions a month into their QuickBooks. So they don't need a robust integration. They're like, hey, just give me a spreadsheet and I can manually enter the stuff in. We find most the cost of using the in-house processing for a QuickBooks merchant or a Xero or Net Suite, oftentimes is not worth the time it takes to either manually close the transaction or to upload a spreadsheet, or if we've got an integration, use the robust integration we have. So we can get into many of the accounting softwares that exist today. We're finding more and more, it's become more prevalent in our industry in some verticals. They have vertical-specific softwares. And so somebody's gone and created a really cool tool, cool technology for lawyer, for law firms, or for CPA firms. And when they do that, they say, we're gonna work with one processor, that processor is gonna give us a great kickback, and we're not gonna let anybody else play in our sandbox. We come across that enough, and sometimes we have to walk away, but we have found a lot of these people realize how much they're paying, and all they could do is set a terminal next to it or have a virtual terminal on their computer that they can run transactions outside of it, and it's not worth the cost to have that stuff automatically integrated in there. They don't mind, they can close up the transactions individually over there, and so we have a lot of people processing outside of these uh what we call closed-off technologies. So today, more and more um businesses I'm seeing are are passing that fee that you talked about on to the customer. Can you talk about that and why, you know, why does it make sense? Yeah, so it's funny. I uh I get myself in trouble sometimes with buddies or in I was I was around a bunch of strangers a couple weeks ago, and somebody was complaining about, oh my God, all these businesses now are passing on their fees, they're all stealing our money, and I kind of said, it's what I do for a living. Um, and so I have to kind of be the bad guy every now and again. But um again, going back to where I started off, businesses used to not have this was not a significant portion of their expenses. They could get their money without having paid fees. And for the longest time, Visa MasterCard would not allow you in their rules and their regulations to pass on the fee. It was against the regulations, and if they found out, they would absolutely fine you, and then you would be at risk of them shutting down your account and putting what we call the match list. If you're on the match list, um, you are good luck finding a payment processor. It is a black list in this industry. We come across people that are on it for selling nefarious things and doing other things that they shouldn't be doing, and once you're on that, you cannot get underwritten by a processing bank. So they used to threaten people pretty heartily with it. Finally, they started relaxing the rules a little bit, and basically over the past couple years, they basically said if you provide under certain uh parameters, you allow um you know a method for people to accept payments without a fee, then you can do it on credit cards. And then there are even people there, if you show both prices at time of decision, not at the check check, not at the cash register, but at the time of the decision, um, you can also do what we call dual pricing, where you show the card price and the cash price. And so um business owners, we are coming across. I mean, I would say 60 to 70 percent of the deals we're writing in a month are for some form of surcharge. Um, because we are going to businesses and showing them 50,000, 60,000, $70,000 a year in savings by adding a 3% fee, a relatively negligible fee to the card holder. And because it's becoming more prevalent, people are somewhat used to it now. And so people are saying, wait, no, I'm not selling the same hamburger as the guy next to me. People are coming to me because they they like who we are, they trust us, they can't get our product or service elsewhere. And so they're it's it's it's it's it's it's not an elastic decision, right? So they're not just gonna say, Oh, I'm gonna go next door and get it for 3% less. No, they're with you because they want to be with you, they trust you, and they recognize that either prices raise all the time. I mean, try buying health insurance. Every year it goes up, right? I don't know why, but it does. And and so prices raise, or you just say, we're going to now incorporate this fee in there, and we're not seeing any blowback. We've had one merchant in four years of doing this, one merchant who's tried it for one day and turned around and gave us the machine back and said, Nope, we're going back to the old way. It was a little old Italian restaurant that had the same customers coming every single day. And the first customer they had for lunch was this little old company cut uh couple that have been coming in there every week for 10 years, whatever it was, and when they saw the fee, they freaked out. And that was that was it for them. They saw one person freak out about and they they didn't want to do it. Everybody else who has done it has stuck with it, and we are seeing real. We just put uh put one in place for a large business here in town, uh $175,000 a year, they're saying that is that's that's real savings, and for a small business, that's significant. It's enormous, it's enormous. So, yeah, it's it's a it but we also tell people this is a decision that you make. We're not gonna push you on it, we're gonna lay it in front of you. But this is up to you and your relationship with your customers. And if you don't feel comfortable doing it, totally fine. We can help you out without surcharging. We can save you money still, but there's a lot of savings over here if you want to do it, and we'll help you do it the right way. But it is significant savings, and and the people who make that decision generally stick with it. I want to move on to to running the business. But first, one quick question. And you brought this up early about the service side. This is for most people, think of it payment processing as transactional business. But you brought it up earlier how service makes a difference. Could you just share a little bit what that means then? Yeah. Yeah, our our industry, I hate it. I hate it. Our industry can be very commoditized. It's a race to zero, right? We've got competition. There is so much coming. There is for every realtor that exists, there are two guys selling credit cards. It's the same. Um and and and so, and and there are these people, these new people who are just trying to make their name. You got all these all these people out there that are that are trying to do a race to zero and just trying to sell on price. Well, what happens when your terminal goes down? What happens when you are you can't reconcile your deposits? What happens if you need to change the way you process payments and plug in a technology that fits for your business? You need to have somebody that you can call and trust and say, hey, I've got this going on. Are they going to be able to help you or are they gonna push you off to an 800 number? We, you know, it's not as simple as processing credit cards. I have found there are weird things that happen that if you're working with a big 800 number, they're not going to get to the bottom of the issue. And there are really weird things that that I never could have imagined happen in this world with accepting credit cards, that you need somebody that you can get on the phone and say, This is my business. This is 85% of my revenue. I need to get this fixed immediately. And you have and we we pride ourselves on an average of seven-minute response time to the first ticket created. We are under eight hours in resolving all tickets, average of eight hours resolving all tickets. We pride ourselves on getting an answer, taking accountability, and putting a resolution in place as quick as possible. And we pride ourselves on that. And we have clients who tell us, God, where were you guys five years ago? Why haven't we known about you until now? Because there is more to it. When 85% of your revenue is tied up in this one singular process, why aren't you working with somebody that you know it could trust? And I always like to say one throat to choke, a throat that you can find right down the street. And if you need something, if all else fails, we are right here in the same town as you. Well, PJ, the those response rates are a tiny bit better than what I'm used to when you have to call Comcast or any other carrier or Xfinity or anybody else. So that thanks for sharing that with us. Exactly right. Well, I I I want to I want to alter our our path a little bit here. You you've given us a lot about the payment processing side, but you're also a business owner, and our our listeners really enjoy hearing the perspective from a business owner. So with reliable payments, let's let's start with what are some of the financial challenges that you face in the business? I think first and foremost, and every single business owner will agree because when I ask people what their big struggle is, we all nod our heads the exact same thing. It's people maintaining your existing staff, growing your existing staff, and finding new staff. If you want to grow your business, you generally speaking need to hire more people, right? And so making sure I have the money to afford a new person. If I want to put these crazy goals out there next year, am I going to be able to afford hiring three more salespeople, four more salespeople? If I've got clients leaving out the back door, am I going to be able to afford a position that isn't generating new revenue, but is just maintaining existing revenue, existing revenue? It's a constant struggle of where do I put the money, where it goes. But also as you're a growing business, expenses continually rise. My reference to health insurance. Everything I pay, every bill I pay every year gets higher, with the exception of credit card processing. Um, but that is probably my one A and B is the people I have, everybody, generally speaking, deserves a raise every year. So every employee becomes more expensive. If I want to grow more than 10 or 15% a year, it means I need to add more salespeople. Well, that takes three or four months at best to see a return on any type of return on investment. In my industry, I don't see revenue from from if you close a deal, we talk about how quickly we could turn the deal around. I wish I could turn around the money we make on it. We don't get paid on day one. We have to wait for them to process a full month. We have to wait for all the banks to put their hands in and grab all their different money and then say, here's what's left over, you can have it. Um and we it takes us, it takes us 45 to 90 days to see a first dollar from one of our clients. Well, if I've got a salesperson that's really been struggling for 60 to 90 days, I may not be seeing a dollar from what they've sold for another 90 days. So now we've got 180 days in there. That's six months where I may not see a dollar return on what could be a successful salesperson. Um so that's that's my my biggest, my biggest issue is planning for more people, planning for the right people, planning for investing in my existing people. And how do you make decisions around that? Like what do you go through a certain process or what do you do so you know how to make those decisions? Much to your chagrin, Scott, sometimes I just throw stuff up on the wall and see what works. A lot of my decisions are made by feel. And and whether it's right or wrong, I'm a gambler, I'm a risk taker. I say, uh, you know what? I we gotta hire this person. I know it'll work out, and if it doesn't, it's not gonna kill me. You know, I don't go hiring 10 people, but I can hire maybe one more person than I can afford or fire a more expersed, more expensive person than I could budget for. But I think that the upside on them is significantly better. You know, the thing I struggle with is the slow to hire and quick to fire thing. I I try to find ways to make people work, um, but I'm trying to get better at recognizing the mistake is made and and and and and snipping that mistake if need be. Um but generally speaking, we try and we try and find the right people and say, I think we can do it. Now I have been working with with you and and and and and and look really spending a lot of time looking at cash flow and projections and forecasts. And we've been really good at getting into our numbers, and so there was some of that in there, but I would say a lot of my stuff is just by feel. Look at it and say, all right, well, I think we're gonna be all right here. Um and there may be a couple months where we're we've got to tighten the belt a little bit, or we've got to be careful on this. I try not to make any decision that can absolutely ruin. And um, that's ridiculous. My I save money on electricity. And so, yeah, I think I I I I make a lot of my decisions on fuel. I I tried now more so than ever back it up with evidence. You know, I look at what we have, I look at what we're expecting next month, I look at what we're expecting over the next couple of months and say, yep, this generally speaking, based on the model we've built, this fits maybe a little bit more than what our model says it can do, but it's not enough to really hurt me. Um, and it may just slow things down for a second. And so those are my risks and rewards, and I hope to see the rewards. Understood. So, do you have any kind of do's and don'ts for other business owners and how they're thinking about financially managing or or you know, the thinking about the future of their business? Yeah, I think on the on the financial side, I think um, you know, there's two extremes. I've been on the one extreme, which is I for a while, I didn't really I got my financial my financials done every year. I had a bookkeeper. I didn't pay attention to a single thing. I literally looked at what was in the bank account. I knew what uh what I was expecting next month, and I said, all right, I think that's more than this month, so I can do more of this. And I wasn't paying attention to credit card debt, I wasn't paying attention to line of credit, I wasn't paying attention to a lot of that stuff. And so I think first and foremost, you want to make sure you have a good budget. You want to make sure you have a good plan and you follow along that. Um, that can get you in very big trouble. And I've seen a lot of people in more capital-intensive businesses get in a lot of trouble by putting them getting themselves way out over their skis. And if you are not paying attention to a budget and knowing what's coming in, knowing what's coming in in six months, and also what expenses are coming up in six months, things can get ugly very quickly. On the other side of it, I know people um who who live and die by their financials. If if the black and white do not say yes or no, they they can't make a decision. They're paralysis by analysis. It's it's only by the numbers. And I think many business owners have become found success in the gray here, right? And we always talk about our CPAs. We want to find CPAs who are willing to work in the gray, right? Yeah, the tax laws say this, but what can we infer out of that, right? And and if you're not willing to, um, if you only go by black and white, by the ones and zeros, um, you're not going to take risks. You're not going to make decisions that that may not work out, but they could work out really, really well. And so don't be um don't be like live or die on the on the budget. There is always room for for stretching. And sometimes being scared is the best thing. Having no safety net is the best thing a business owner can do. Because if all else fails and all else goes wrong, you're not going to stop until you figure it out. If you've got a safety net, you're going to live on that safety net for a long time. So I encourage people to take risks. PJ, I think that's a great point. And you know, in my role, I think most people look at the you know, that the CFO or as the, hey, no, don't do anything, don't take any risks. But you have to find the way to run your business that works for you in your business. There's not just one way to do it. And I agree, you everything kind of happens in that gray area, right? You sure you're using the financials, but you're also using your experience and your gut feel to make the decision that you can live with. Yeah, businesses are a living, breathing thing, right? And every day you come in, something new is gonna happen. And and and and and it's like it's like trying to plan an event, outside event, two two months from now. You don't know what the weather's gonna be, right? So do you automatically put it inside, or do you automatically call a tent company and say, hey, you need to be need to have a ton of? No, there is there's some variabilities in there. You gotta you gotta make arrangements for arrangements for everything. And I think that businesses, all businesses, there's variability, there's flux fluctuations, and you have to, I think the most successful businesses are the ones that say, I'm gonna take a gamble here, I'm gonna push a little bit of my chips into the table and and and try something new, and that's where you see the big rewards come from. And so, yeah, you just can't be so bound by strictly financial decisions that you don't have any feel. You gotta have some feel of your business. There is a heartbeat to your business. You don't believe me? Show me a business with culture and show me a business that doesn't have a culture. You can walk into a business with culture and feel it, and you want to be a part of it. A business that doesn't have a culture, you walk in, the lights are drab, the people are sitting in their desk, they're not looking up when you walk into the room. That is culture. That is not culture, right? There is a that that is part of the heartbeat of a business. And when things are going well in a business, you can walk in and feel the nature, the upbeat nature that people have. When you walk into a business that things are all going well, you can feel it. That is a heartbeat. A business has a heartbeat, and if you as the owner, as you decision maker, do not have your pulse in that heartbeat, you're in trouble. So you gotta feel at a heartbeat, and you gotta know what can and cannot be done, and you gotta test the limit sometimes. You gotta push outside of it. You gotta push yourself to a higher heartbeat, right? You gotta push yourself to get stronger and faster and better. And so if you're just going by what the numbers say, you're not gonna be going by the feel of the business, what you think you can do. Hey, we got momentum behind us, right? Look at any sports team. You harness that momentum and you double down on it, you push harder, you go for the long pass, whatever it is, right? Same thing in business. You gotta have a feel for what's going on and know when you can push and when you can't push. Excellent description there, Pat PJ. And before we wrap up, I want to talk about one other topic here. You have an arrangement that's not every business has. So in reliable payments, you have some silent partners in the business. And some businesses do, but but a lot a lot don't. So I'm curious, maybe you could kind of walk us through how that, you know, how that got started or how that works for you. Sure. Yeah, I started out. Uh my my brother and and other business partner um own a large paywall company, and I was working for them and wanted to start my own thing, and um, they were wonderful um and helped me out. They said, here's an opportunity where we could sell payment processing into our existing client base. I was a young 27-year-old kid with I was very risk-averse. I was scared of my own shadow, and I didn't want to go out and try hard on things. And um they saw an opportunity that they feel like I would, they felt like I would be um successful in. And they gave me the opportunity, they gave me the platform and said, hey, we'll help you start the business, we'll put the money into it. That's gonna cost you uh equity. Um, and so I can tell you without them, I don't think I would be where I am today. I would not be in this business probably. Maybe I would have started something else, maybe I'd be 10 times richer, maybe I'd be a billionaire. I don't know, right? But I know for a fact I would not be sitting in the seat talking to you today without them. And so um, here we are 14 years later, 13, 14 years later, um, they are less and less involved in my business on a daily basis. They've got you know their own lives going on, their own businesses going on. Um, and I'm at the point where I kind of don't want them involved. They walk in here, they don't know what's going on, right? So if they were to come in here and try me how tell me how to make decisions, I'd say kindly see the door on your way out. Um and and and so um it can be really good, and I can tell you I've seen ones that can be really bad, and you gotta be you gotta be wary of that. Do you have any thoughts around setting up this type of a silent partner structure? I would first urge people to be careful when you're doing a business with a partner, um, especially silent partners. Everybody can look back and say, ah, if I'd done this differently, I'd be this now or whatever it is, right? So I can sit here and all I can do is give advice back to people who are where I was when I was making the decision.

Speaker:

Be careful, have more faith in yourself than you do. I think people can be much more successful than they give themselves credit.

Speaker 1:

And you gotta understand what a partnership means, what you get out of it, and if you would be able to accomplish what you want to accomplish with that partnership. Again, I know that I would not be here if it weren't for my partners taking a chance on me. And it's always easy for me to look back now, 14 years later, they're not involved in my business and say, ah, these guys are worthless. Right? But no, they they saw they saw vision in me early on, and they absolutely provided me guidance later on. I constantly have to tell myself, even today, all right, I I that those three or four years in the beginning are worth the value today that I have now built. I mean, I would say that they got me the first five or six years. I have taken it to where it is now significantly on my own. I think that's a fair statement. I think they would agree with that. But at the end of the day, the foundation matters as much as the roof. And so to the people who are considering this now, you need to make sure can you accomplish what you want to accomplish without a partner? Or do you need them? Then I would encourage them to something I didn't encourage, didn't think of much, and I was scared to death, and I didn't have money, I didn't know how to go about getting money and how to go about getting loans and all that other stuff. But I think if you're gonna bring on a silent partner that's gonna help you out, I think you can set up, you can set up structures that say, hey, if we hit XYZ numbers, or after XYZ years, I have an option to buy you guys out at a much lower price. If things are going well, I'm gonna say, hey, I'm gonna come to you, I'm gonna give you a premium. Thank you for your time. Here's a nice thank you, here's a nice reward. I'm gonna take it from here. Um, the problem is it's always expensive, no matter what, no matter where you are in business, right? It's about as much or more than you can afford at that time. But if you're growing in five years, that money you spent there was money well spent. And so I encourage people to be mindful of setting up a partnership, make sure it's the right partnership, make sure they actually care. And I lucked out, I've got family and and uh and another person who's basically family to me. Um, I can trust them wholeheartedly. I've seen plenty of people get in spots with people who they think they they they they idolize, right? They respect and they they look up to, and they turn out to be a terrible person, right? They never worked with them a day of their life, but they've got all this money, they got all these connections. Next thing you know, they're coming banging on the door. Hey, where's my money? Where's my distribution? Where's this? And they're not putting anything into the business, and they say, I don't care. I own 60% of this company, and I you work for me, right? And and so you gotta be careful with partners that you have the right ones. You gotta make sure you set clear expectations with them. Here's why you are a partner of this company, here's what's expected, and both sides understand that and digest it. And if that's not done, it leads to um, you know, some ugly feelings down the road where one person's saying, I'm doing all this work, you're doing nothing. What are you getting paid for? And and resentment can be a very dangerous thing in partnerships. Well, PJ, that that that was that was great. And and I have to say, I I've really enjoyed your your passion and belief, not only in your business, but in business ownership in general. So thank you for that. And I'd like to we're wrapping up on time. I'm probably running over the time that you shared with us. I talk a lot. No, no, this has been great. So we we like to wrap up every show with one to three immediate takeaways that our listeners could put, literally put into action or they hop off the podcast. This could be around payment processing, business ownership, you know, just anything in general in business. What what do you have to share with us? Yeah, I would um, you know, the first and foremost is something I tell you've heard me say it before, Scott. I say it to a lot of people. If you're gonna start a business, um, first and foremost, the most important lesson I've ever learned, and my brother learned my brother and I learned it from one of the guys we both respect. And three simple words, just say hello. Um it's amazing the opportunities that can come from you getting out of your comfort zone and going to somebody new and saying, hi, my name's PJ, asking questions and being generally curious of those people. I I cannot list on on two hands, more than two hands, how many opportunities have come about for me walking up to somebody I never knew before and just saying hello, learning about them, finding synergies, and the next thing you know, you've got a new venture or a new opportunity or a new relationship that has turned out to be either profitably directly or from them being able to introduce you um somebody else. So getting out there and just saying hello is important. Another piece, and I always struggle to verbalize this because I worry they could come across the wrong way.

Speaker:

And so please, you know, understand what I'm getting at here. Don't give up. Do not give up. You can pivot, you can rebuild, you can reset, you can do everything else.

Speaker 1:

But if you're a business owner, you've got conviction, don't quit. Do not give up. Um, you know, an anecdotal way to say it is, you know, most businesses don't gotta go out finally go out of business when when when the owner or the leader say, Oh, we've had enough, we're done. And again, I know that there's environmental issues that come into play that you know it's not true for everybody. But I think there have been so many times when I have been ready to be done. I don't think I could do it again. I can see some of them, the sleepless nights I've had, where I said I just can't do it anymore. And then the next day, something crazy happens. And I'm like, oh my God, if I had given up, I wouldn't have seen this. I can tell you, Scott, no more than no less than five times. I've been like, I can't do this. This is awful, this is too hard. I'm not the right person. I struggle from from imposter syndrome. I don't think I deserve to be in this seat. I mean, all that stuff. But I just wake up and say, This is me, this is what I'm doing, this is the task, this is the path I'm on, these are the tasks I need to accomplish. And I don't stop. It's not an option. And, you know, going hand in hand with that, do not have a safety net. If you are starting a business, and you can ask any. Um, I've got a couple of buddies who are business brokers and they deal with people coming out of Capital One and all these other big places with retirements. The ones that that are most successful are the ones that don't have the safety net. Get rid of the parachute, get rid of the safety net, get rid of the the tether lines. You gotta be all in. Dive in head first, throw it all behind you, and say, I have nothing else going for me. This has to work. Because the people who have safety nets, they're one foot in, one foot out. Uh, you know, I don't want to go too risky here. I've got to protect this. No, no, no, no, no. If you don't go all in, if you're not a madman and you're rabid about what you're doing, and you've got this monster chasing you down, this monster of failure behind you, you're not gonna push as fast as you need to push. And so I encourage every business owner, get rid of the safety nets. Just get rid of the safety net, take the risk, dive in head first, and get after it. I I I love this, PJ, and very inspirational. Thank you. Thank you. One more ask. We enjoy sharing a favorite podcast or book. What do you have for us? Yeah, so podcast, the one I love listening to these days, it's more, it's got some business in there. It's called All In Podcast. It's uh David Sachs, Jamath Pali Hapatia, uh Jason Calconus, and David Friedberg. They are four uh Silicon Valley billionaires who get together, they're all best friends, and they get together and they talk about everything from AI to politics to foreign wars, everything. And it's just they are not too smart to be able to speak to the the the Neanderthal like me. Um and it's just they tell you about stuff that I never knew. They tell you about IPOs and all these crazy stocks and AI and all this other stuff, and it's it's really interesting. So I encourage anybody who listen to that to come out, they come out with it once a week. It's on YouTube, it's really great. And then um a book that I I read and I quote often is called Radical Candor. Um and it it is written by a uh I got it right here. It is written by Kim Scott, and she was a uh former tech CEO, um, extremely successful person, and it's um the the byline is something like how to say what's on your mind without being an asshole. And it talks, it gives you so many lessons about especially business owner being a leader, especially if you're not a natural leader, how to say what's on your mind and how dangerous it is to not say what's on your mind, to not to not verbalize what needs to be done. Um, so I encourage any business owner, especially who struggles in uh managing people and saying it, getting their point across, read radical candor, it it changed my life. Well, well, this has been great, PJ. Uh, where can people find out more about you if they want to reach out? Yeah, yeah. Websites www.reliablepayments.com. Uh my email if you are not selling me something, uh P Gallagher at reliablepayments.com. Um, and uh happy to chat with anybody uh with questions about how to run a business or uh overcome obstacles or just want to chat about uh payment processing. Perfect. Well, thanks for joining me today, PJ. Thank you so much for having me, Scott. All right, folks, that's it for today. If you liked the show or found something useful, do me a favor and share it with another business owner or somebody you think might benefit from listening. I'm Scott Keller and hope you join me next time for Budget Your Business.