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Though competition among independent sales organizations to win start-up merchants' business is strong and new merchants often fail, ISOs and their agents should not dismiss targeting fledgling retailers, says Jamie Savant, a partner with The Strawhecker Group, a Omaha, Neb.-based management-consulting firm. "I encourage agents and ISOs to continue to look at the new merchant model," says Savant. "You don't know who the next diamond in the rough will be." Savant suggests ISOs give new merchants a chance to grow while monitoring their risk assessments. Some ISOs prefer working solely with existing businesses because there is less competition, less risk and more profit, says Justin Milneister, president of Elite Merchant Solutions, a North Hollywood, Calif.-based ISO. "We don't go after new business because they are bombarded with flyers" from competing ISOs, says Milneister. Existing businesses also are less likely than are start-up merchants to go out of business, and existing merchants typically have "more capital to purchase extra services like gift cards or to upgrade equipment," he says.
