The Story of Pat Flynn
Pat recently sat down with Forbes to discuss his story. You can check it out here. It’s an incredible journey that began in 2008 when Pat created a website called smartpassiveincome.com to teach people how to create and run their own online business. It was a decision born out of necessity more than anything else. Pat was laid off from an architectural firm during the recession of 2008. And with no prospect of a future job in an industry that was hit really hard by the downturn, Pat needed an alternative source of income. The answer? A website he had created to help other architectural employees pass an exam known in the industry as the LEED exam. What he soon realized was that this little website was receiving 1000’s of visitors a day. So Pat packaged the content he was posting on his website into an easy to read study guide and began selling it online. “That first month, I made $7,008.55. That was just life-changing for me.” Pat recalls. By the end of the year he was generating more than $12,000 a month in revenue! “I was so excited, I wanted to share how it all happened and what I had learned, so I created smartpassiveincome.com that same month.” Pat started his blog to teach people how they could make money online just like he was. And before long Pat’s following turned into a robust community of enthusiastic entrepreneurs. As I write this blog post (November 2017) Pat is generating more than $140,000 a month in revenue selling all types of courses and guides. The growth of his company has been remarkable, but all that revenue came with a very unique problem.
The Problem of Failed Payments
Before Pat ever started his business he knew he would need to have a plan for failed payments and payment recovery. It’s a plan that most entrepreneurs and business leaders often overlook. Not because they are careless, but simply because solving the problem for failed payments and payment recovery is not sexy. Entrepreneurs and business leaders are forward thinking, on the move, and usually looking to take new ground. While payment recovery is back of the business follow up, which is hardly inspiring. But savvy business leaders know that the issue of payment recovery will rear its ugly head at some point. Which is exactly what Pat Flynn anticipated before the issue became a serious one.
So what exactly is payment recovery, and why does it matter? I’m glad you asked. 12% of recurring monthly credit card transactions fail each month. Which is a huge open door at the back of any subscription-based business. Businesses like these literally leak large amounts of money each month if this problem goes unaddressed. And while 12% may not seem like a big number, in terms of actual dollars, it can become a 6-digit number in a hurry. This is not something that most business owner foresee, but Pat Flynn saw it coming.
The Solution to Failed Payments
The solution for recovering these failed payments is not an easy one. Especially for growing businesses like Pat’s. With the problem compounding Pat had a couple of options at his disposal. One solution would be to hire a full-time employee who would focus on the single metric of failed payment recovery. This is an expensive solution because it means hiring a full-time employee and all the costs that come along with them. And while having someone whose sole job and responsibility is to monitor and execute failure follow-up is probably the most effective solution, it is by far the most expensive. Another option? Software. There are several software providers that will help you repair basic transaction failures. (Expired Credit Cards, etc.) But in terms of recovering actual revenue for your business that is adding to your bottom line, you can expect a recovery rate of about 9-12%. And while this solution is certainly cheaper than a full-time hire, the recovery rate is low. So which one did Pat choose? Neither.
Pat opted for a third option. He found Gravy. Gravy is a company dedicated to fixing the problem of payment failures for small business all over the world. Gravy combines the low-cost solution of software with the high recovery rates you would get from a full-time hire. It’s like having a full-time employee, recovering up to 80% of your failed payments, for a tiny fraction of the cost!
Pat Flynn continues to inspire and open doors for entrepreneurs and small business owners all over the country. It’s his life’s passion to help these business owners. And with yearly revenue now surpassing $2 million, Gravy is helping Pat stay on top of a very tedious task, allowing Pat to do what he does best, help entrepreneurs! We’re happy to be a small part of Pat is doing, and we’d love to be a part of what you’re doing as well!