Grow and Scale to Unlimited Processing with KhaazRa MaaRanu: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Creator Science. Today, we're pulling a timeless EO Fire episode from the archives, so the giveaway may not be active. And we'll be talking about growing and scaling to unlimited processing. To drop these value bonds, we have brought Kazra Maranu into EO Fire Studios. Kazra is a co-founder of Electronic Commerce, now a full-service payment provider that helps thousands of entrepreneurs grow and scale their business to unlimited processing.

0:39And today, Far Nation, we will be talking about the five cash flow secrets. One of them is knowing your numbers. If you don't know your numbers, you don't know your business. We'll talk about the other four and so much more. And a big thank you for sponsoring today's episode goes to Kazra and our sponsors. Artificial intelligence has made a splash in the headlines and for good reason. The digital landscape is changing quickly and AI is a huge part of that. If you're feeling behind the curve, don't worry. HubSpot has got your back. HubSpot's AI power tools, including their content assistant and chat spot are a perfect place to start learning the power of AI.

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1:56So Khazra, say what's up to Fire Nation and share something interesting about yourself that most people don't know. Fire Nation, hello and how are you doing? So glad to be here, John. One interesting thing about me is that I'm really a fun guy. I just love doing things spontaneously. I'll travel at the drop of a dime. I'll do anything and everything at least one time. Fire Nation, where's that spontaneity? Like you can't blame COVID forever. You still have to be spontaneous from time to time. And I think that that is something that Khazra definitely has in spades. We've been communicating over the past few weeks.

2:37I feel like you're just always traveling, Khazra. You know, I used to travel a lot more before this whole pandemic thing. So, you know, that bug is absolutely there. I'm like you. I love the tropical vibes. I love to be in beautiful places. I love serenity. I love peace. I love beautiful landscapes. So yeah, absolutely. I love it, brother. And I also personally love your entrepreneurial journey, but I want to share with Fire Nation now. So talk to us about your entrepreneurial journey to get you to where you are today. Sure. So it started off many years ago. We've been around for maybe 12, maybe 13 years now.

3:14Time flies, John. And I started as a door-to-door sales rep, right? I was working at an elementary school in Orlando, Florida and working my tail off to get to like$28 ,000 a year, two weeks vacation, that whole thing, 7.30 to 3.30, whatever time I got off of work. And I wanted to do something that gave me more time. I said, you know, I need to do something that gives me more time. And I work hard as hell. Can I do something that doesn't cap my income? But I really just wanted to have more time. I'm like you, John. If I just want to sit at the beach, if I just want to look out the window, if I just want to play basketball or actually I want to be with my children.

3:56Right. How can I do that? And so I went online and found a position in a 100 percent commission sales opportunity. 100 percent commission. I never had any social experience before. And I flew out to California, wasn't successful at all initially because, you know, I was trying to do it the corporate way with, you know, the sales pitch in the book and, you know, that whole corporate approach. and just got turned down at every business that I went to. And then I dropped it, right? And I said, you know what? Let me just relate to people. I'm from Detroit, Michigan, School of Hard Knocks. And the one thing I know how to do is connect with people.

4:31I know when to talk, when not to talk sometimes. And I did that, and I had super success. So just to speed it up really quick, I had tripled my income that year, quadrupled it the next year. But then I realized that what I was doing wasn't what I thought I was doing, meaning that I was selling a product in the service that I didn't even freaking understand myself. Right. So I even though I had dropped the sales pitch and book, I still had the spirit of that particular company and of the industry itself. And that is the spirit of confusion. So, you know, I was selling merchant programs, whether it be rates, whether it be terminals, whether you lease the terminal or not.

5:11You know, you could buy a terminal for ninety nine bucks and you lease it for 300 bucks. This is especially for brick and mortar businesses. You can lease the terminal could cost ninety nine dollars. You could literally lease the terminal for three to sometimes a thousand dollars per month for 48 months. And at the end of the lease, they do not own the machine. And it was just, you know, even the race and the way we were pitching them. It was just a real messy thing. Once I realized what I was doing, because I had never read the contract. I had never really read the contract myself. I was just selling the program.

5:42And once I realized that I had to make a decision, it was totally against that particular company's, I guess, goals to really inform clients on what's really happening behind the scenes. By the time the client realized what was going on, it was too late. They were locked in. They were locked into a four or five year contract with all kinds of fees attached to it. And to get out of it, it would require legal entanglement. Right. That means you have to hire attorneys and go through all this other stuff. And it's contract. So it's kind of hard to get out of it. So I had to make a decision to leave that company and leave all the money that I had built up, all the recurring income that I had built up.

6:20I had to leave it on the table. Right. And so I did that. And I went to work with another company. And in six months, I had replaced the income that I had made at the other company. So I'm like, man, those guys were not they were robbing me. And I was like taking advantage of and I was robbing merchants, basically. Right. Right. Or robbing clients. And so the same thing happened there. All of a sudden they would create money out of thin air. When I say thin air, thin air. So as an example, there's something called PCI compliance that every business needs to have. And in particular, brick and mortar businesses.

6:53Right. You don't necessarily have to, but it's something that will help you. Right. It helps protect your business. So it's normally like 20 bucks if you don't complete the survey online. And that's, you know, the highest I've heard is maybe$45. These guys are charging$179 per month. So imagine 10 ,000 clients that all of a sudden get charged$179 per month. Yeah, that's pretty significant. That's like millions created out of thin air. So one of the clients called me and said, hey, what's this fee here? And I said, oh, you know what? Just call customer service. They'll fix it. Now, I remind you, I'm a 1099 sales rep at this other company as well.

7:35I really don't know what's going on behind the scenes. The company tells them, oh, no, just we'll give you a refund. Just get it from Cosra. I'm like, wait a minute. I didn't even get paid off of it. What do you mean get it from Cosra? And so I had to make another decision again. Do I stay on this program and just allow the back office or operations or the people, you know, behind the curtain, so to speak, to make all these decisions that clients aren't aware of? And neither am I aware of in order to make money, but allow me to be the face that, you know, interfaces with the client. So I had to leave again and I started my own thing with a business partner of mine and we started our program with a company called First Data.

8:14It's the largest processing platform in America. And interestingly enough, this is where, you know, I got to be careful what I say here. This is when we realized, like, oh, my God, this is what everyone's trying to duplicate. Like, this is this is the granddaddy of it all. This is where it all comes from. And we thought we were in control, but we were not in control. There were still fees coming from everywhere, but not just to the clients. They were even digging us. So, you know, as successful as we were, we were running backwards economically or financially at the same time. They were digging the hell out of us, man.

8:47Fees here, fees there. We say, hey, what can you explain this? Oh, here, here's 20 Excel sheets. Right. It's like, you know, add more chaos, like the Tower of Babel, so to speak. So we said, you know what, how can we actually. And then one other thing happened that was really critical. One client, I think it was an old lady, called and said, hey, you guys overcharged me. I think it might have been 17 cents or something like that. And we're like, wow, 17 cents. Like, come on. So we noticed someone in the back office noticed that it wasn't just her. It was tons of clients that were charged that fee.

9:19So we called this particular company, this particular platform, right? And we said, hey, you're overcharging these clients. Can you fix it? They said, okay, no problem. Because we weren't in charge of the underwriting. We weren't in charge of the risk. They were, we were just more like the sales entity and handle, you know, a little bit of customer service and a little bit of tech support but the actual rates and transactions and things like that were really controlled on the back end so they said they said give us 45 days of 30 days we called in 45 days and they said know what just give us more time management will make a decision we call back after 60 days management said oh you know what we've decided that we are going to refund anyone unless it's over$25 we're like hold it we already know it's not over$25, but now we're talking about thousands upon thousands upon thousands of accounts that were overcharged.

10:12And so we were left to foot the bill, even though we're not the ones who charge, you know, who overcharge the clients. So finally, we got to a position where we said, you know what, there has to be another way to do this, right? Because we felt like glorified those reps at the time, which is what we were. And so we got to a point where we are today, where we became a full service provider. And there's many, there's different levels in payment processing. But if you're a quote unquote ISO, which stands for independent sales organization, the highest level that you can get to is considered a full service payment provider.

10:47And I can explain that, you know, doing the program if you like me to. Yeah, I would like to actually jump into that. I don't want to go too super deep into the weeds because I don't want to like confuse or lose Fire Nation. But I really want to make the point to our listeners, to you Fire Nation right now, this is a critical part of your business. I mean, whether we're talking$17,$17,$170 per month, these things add up and these things can make or break businesses over time because listen, they can allow you to invest more in marketing, to bring on more people on your team when you are paying the right amount and not getting overcharged and doing all these different things.

11:23So let's talk about exactly what a full service payment provider is. And Kazra really kind of focus this for the entrepreneur, for our listeners, Fire Nation, so they can understand why understanding what a full-service payment provider is important for their business. And let's dive into that. Especially for entrepreneurs, right? Especially if you're online or offline. But in particular, really, I think it's easier to scale online than it is offline. And that's just because you don't have all the red tape that goes behind opening up an office building and all the other things that go along with it.

11:59So it's a little easier to scale online. So let's say you go to there's a company offering payment processing online. You go to that company and you don't know what happens with your paperwork. Sometimes that particular company will shop your paperwork around to many different service providers. Right. They'll shop it around to another ISO. Another ISO may not even be doing the underwriting or the risk. then they'll shop it around to another company or whoever they have a contract with. And that third company is possibly the company that's actually doing the actual underwriting and risk. So you like three to four levels removed from the source.

12:38So that means you have maybe sometimes two to three level levels higher of fees or two or three levels extra of credit card fees. But also where it's really critical, John, is that when something happens, you're not going to be able to get a resolution from that first entity that you spoke to because he has no control of it. Just like we didn't have any control when we first started. Whenever there was an issue, we'd have to wait and just pray and hope that someone else will be able to resolve it. There's nothing we could do about it. So that's considered a sales company. Then you have an ISO who may be a registered entity, but they're not doing the underwriting, the risk or the funding, which is extremely important, especially for entrepreneurs, because cash flow is king in your business.

13:25And if your funds are being held, you can't talk to the first person. You can't even talk to the second company because there's another company who actually controls the underwriting and risk. And there's only a handful of full service providers in the country. So that's where we are today. We're a full service payment provider. So the bug stops here, so to speak. We handle the underwriting. We handle the risk, customer service and tech support, all 100 percent in-house. And more importantly, we handle the funding. So you've heard of horror stories where people scale and they get their ads working right and they're in their sweet spot and they're making all this money and then boom, all of a sudden their funds are held and they can't get in contact with, especially with the sales rep or anyone else for that matter.

14:10And in some cases it's because the company who's actually doing it, you don't even have their telephone number. Like you don't even know what department to call. So it's critical. And it can essentially put you out of business. So as a full service payment provider, and because we've been through many different steps and layers in this, we knew that was where we needed to be in order to really service our clients properly is by being in control of the actual underwriting risk, the funding, the tech, even the rates. We control that as well. So hopefully that helps your audience to understand the huge difference there.

14:46It definitely does. And Fire Nation, one thing I just want to be very blunt with you about is you are likely being overcharged right now. Period. End of story. Because like Khosrow was breaking down, you were having middlemen slid in between middlemen, between middlemen, between middlemen. And then before you know it, you're just like, where does this path lead? Where does this yarn unravel to? And it's an absolute nightmare. And I've actually gone through this myself multiple times over the past eight years. And what solves all of this? a full service payment provider because it's all one house, one stop, one shop.

15:22And we have a lot more to talk about. It's going to help your business, Fire Nation, keeping more dollars in your pocket when we get back from thanking our sponsors. Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business, startups, and entrepreneurship. One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns.

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17:19Otherwise, people just tend to stay where they are because it's comfortable and they know it and change is scary. So what are some of the differentiators that you created from other merchant providers? One of them is something that I had mentioned earlier, and that is since we are a full service provider, we can handle every step of the process, including helping you scale and grow your business. Now, what do I mean by that? So let's say if you go through a sales company or a middleman or something like that, it's really just a residual check that they might receive. And I'm not knocking it because we actually do the processing for a ton of companies that offer it.

17:56But that's it. That's where the relationship stops. There's nothing else they can do. What we do, what we differentiate ourselves and also just as a side note, you can easily go to Stripe or PayPal or Square and you can start processing in five minutes. Right. They don't know what you're selling. You could be selling, you know, unfortunately, something illegal. They wouldn't know. They begin underwriting after you begin processing. What we do to make sure that you can scale to scale to unlimited processing for long term growth is we ensure that you're set up properly. Because what point is it if you set up a you set up your website or your business, whether it be brick and mortar online, and then you're out of business, you know, the next week because there's something wrong with your terms and conditions or your terms and conditions don't match the marketing or the marketing.

18:44isn't what, you know, there's certain things that you can't say to run a Facebook ad. And there's certain things that you're not supposed to say with Visa MasterCard at the same time. But how would you know? Right. So what we do is we go through your entire website. We go through your offer. We go through your products and make sure there's no chemicals in there that are against the FDA. And we make sure that you are card brand compliant. And we do this 100 percent in-house. Also, we make sure that we set you up for success. What do I mean by that? It's really, you know, especially let's say if you have a physical product, right?

19:18And, you know, those scale really, really, really fast. And unfortunately, when you scale really fast, sometimes your chargebacks scale right along with it. So, you know, you're going to make all this money and you'll probably spend it before you even really, really get the chance to really make the money you'll spend a lot of it and then now you have all these chargebacks so now you're going to end up owing money and you're going to have your account shut down and in some cases you even what they call blackballed or you put on something called the matchless where you can never ever process again so to avoid and prevent that again we make sure your car brand compliant but we make sure you scale but we make sure you scale appropriately that means you know how much money okay you've won$100 ,000 in processing can you can you perform that way let's look at let's look at your history let's look at your financial history you know how much money do you have in the bank okay if you don't have that much in the bank no problem we'll set you up with a chargeback protection or a chargeback mitigation program we'll set you up with fraud mitigation we'll make sure that you know if you get a huge number of sales in one day that it's not somebody you know who's doing something nefarious you know maybe it's a competitor or maybe it's just someone who stole a credit card who orders a bunch of your product you ship it out and now you realize that it's fraud you're still responsible for that so we want to make sure that you're protected and that we can because we have to protect the card holder that is our fiduciary responsibility but we also want to protect the business owner to help that business owner grow their business and that's where i know we differentiate ourselves so fire nation i hope you're seeing just how khasra is going the extra mile how he's saying this is what we do that other payment providers just aren't willing to do.

21:03I mean, go through your business, like see where you're coming up short in certain areas, help you improve because guess what? They win when you win. So you winning and their business is aligned. And I love when that comes together. And that is just such an amazing vibe when both the business provider and the user of that actual product or service is aligned in that same manner. Now, we've talked a lot about the reasons, Kazra, why you started Electronic Commerce. I mean, it really makes sense. You saw what was wrong in the industry. You experienced it firsthand. You kind of saw some of the griminess that was going on there and how you could just do it better.

21:43But go right to the core. Why did you launch this business? Break it down for Fire Nation. One of the major reasons is because as a sales rep as one of those guys out there going door to door knocking on doors selling payment processing for other companies i would i really didn't understand what i was selling and i'm genuinely a good guy like i have the same phone number that i had 10 12 15 years ago in the sales space there's guys who have like three cell phones it's like you know one is for where they do this kind of business another one was for this kind of business and another one for this kind of business And I just didn't want to be that guy.

22:23Right. I don't want to be the kind of guy where, you know, I bring a client on board and then I see him at the grocery store one day or anywhere. And I have to like run and hide from him because I've done something, you know, that wasn't ethical. So I had a friend of mine who started processing with us. Right. She's a really good friend of mine. And his best friend is David Siegel. I don't know if you know who David Siegel is, but David Siegel built the house of Versailles. It is the biggest house in all of America. And David Siegel is also the owner of Westgate Resorts in Orlando, Florida. So my buddy came on board with me and one of the companies that I was processing that I was selling for at the time did something so horrible to him.

23:06They held like over forty thousand dollars from him and they were super anal about it. I mean, when I say anal, John, I mean anal. Imagine you're processing, you're running your business, someone's holding your money, and they're anal with you because you're asking questions as to why are you holding my money. So they were anal for one, and then for two, they really didn't know what the heck they were doing. And I started to see this as a pattern in the industry, period. Even with the big payment processing platform that I was working up under, they would hold funds, and sometimes we'd call and say, hey, what's going on?

23:40And they were just like, hey, who are you? Who are you to even ask? We'll talk to the client and they would even talk down to the client. And I just thought to myself, you know what, like what kind of way I would feel sleazy, like I need to go home and take a shower after doing business sometimes. And so I wanted to do something that I felt really good about, something that I could build a legacy around, something that I didn't see being done in the industry, which is being ethical, being honest and being straightforward. And I wanted to I wanted to be able to offer a program. I want to sell, so to speak.

24:12Right. But I wanted to talk to the client and make all these promises, make all these wishes and provide all this all this value before, during and after. And I wanted what I really wanted to do is build long term ethical relationships that allow business owners to grow their business. And I did I wasn't able to do it up under any other entity that I was with prior to that. So the only way that I could do that is to start my own with my business partner that I currently run electronic commerce with right now. Fire Nation, this is an example of a story of why you start a business. Because you're in the industry, you know the industry, you're passionate about the industry, you see what's wrong with the industry, and you set out to do something that's right.

24:54And that's exactly what causes us to be able to do with this full service payment provider. So you shared an amazing entrepreneurial journey. I really hope you've inspired Fire Nation to number one, like look at what they're doing on the payment processing side, because they're probably losing dollars into hundreds of dollars and sometimes thousands of dollars, which really adds up when your finger is not on that pulse. and really just kind of break it down also, Kajra, of like, hey, what do you want to make sure Fire Nation gets from everything that you talked about? Because you talked about a lot of great stuff, the unique advantages that you created with your company and how Fire Nation can hopefully be coming up with ideas to do that for their own.

25:37What do you want to make sure Fire Nation gets from this entire conversation? You have a great call to action for us. I know there's a free ebook plus an opportunity, Fire Nation, to literally have a 15-minute call with Kajra. So listen up for that. Take us home. I want your audience to understand that there is a company out here. There are people out here like myself and maybe there's someone else out there. But for us in particular, there is someone out here who really wants to build a long-term relationship with you. We don't want to look at you as just like a client. In payment processing, everyone has what they call a merchant ID number.

26:15And that's literally how, I mean, and people brag about it in the industry. You know, how many MIGs or how many merchant ID numbers I have. It's almost like a prisoner. Like, you know, you're not college remember or new. You're a number of whatever a prison number is. So we want to build long-term relationships with our clients. And we have a huge enough staff to do that. I can't personally get to know everyone. But we want to help you grow your business. We want you to be in business for the long haul. And one way to do that is by knowing your numbers. Most businesses don't even look at the payment processing.