The 10 Best Credit Cards for Small Businesses
Starting your very own small business can be a very exciting and very stressful time. Even before the doors open, a massive amount of work needs to be done to ensure the business is successful right out of the gate. Too many small businesses fail because they’re unprepared with initial costs and one of the ways to ensure any small business is getting the best bang for their buck is by owning a small business credit card.
Most small business credit cards are geared toward two types of rewards programs; travel and cash back. Here’s a look at the ten top small business credit cards available to business owners today.
The Plum Card® from American Express OPEN
My personal favorite, the Plum Card from American Express OPEN is a charge card which simply means that a small business owner has no pre-set spending limit. This also means the card has no interest rate so purchases are due in full every month. As an added bonus, if you pay 10 days early each month, you’ll receive a 1.5% discount, effectively providing you with a 1.5% cash back rate. There is an annual fee of $185, but it’s waived during the first year.
Ink Cash(SM) Business
The Ink Cash Business offers the biggest up-front incentive on our list, giving new cardholders a $250 cash bonus after they spend $500 in the first three months. 5% cash back is earned on office supply, cellular and cable services, 2% cash back is earned on gasoline and restaurant purchases and 1% cash back is earned on all other purchases. There is a limit of $25,000 spent annually that triggers the 5% and 2% cash back categories (so once you’ve spent $25,000 in gas and at restaurants, you’ll earn 1% for the remainder of the year) but this card also includes a 0% intro APR on purchases for six months AND does not charge an annual fee.
The New Business Gold Rewards Card® from American Express OPEN
Another one of American Express’s line of charge cards, the new Business Gold Rewards Card from American Express OPEN dishes out rewards points in tier levels. 3x points on travel purchases, 2x points on gas, advertising and shipping purchases and 1x points on everything else makes for a very solid rewards program. There is a hefty $175 annual fee which is kindly waived during the first year and every small business owner can expect the full line of AMEX perks.
Capital One® SparkSM Cash for Business
A fairly new credit card, the Cap One Spark Cash for Business is a no-nonsense small business card offering 2% cash back on every purchase. New cardholders will also earn a $100 cash bonus after spending $1,000 in the first three months with another $50 cash bonus coming after an additional employee is added to the account. The $59 annual fee is waived during the first year and this card includes a very low 13.9% variable APR.
TrueEarnings® Business Card from Costco and American Express
The best card on our list for the local traveler, the TrueEarnings Business Card from Costco and American Express offers 4% cash back on gasoline purchases (up to $6,000 spent annually), 3% cash back at restaurants, 2% cash back on travel and 1% cash back on everything else. The 1% cash back includes at Costco and there is no annual fee so long as your Costco membership is paid every year. Cardholders will also find a 0% intro APR on purchases for the first six months.
Bank of America® Cash Rewards for Business MasterCard® Card
Another great cash back business card to fill out our list is the Bank of America Cash Rewards for Business MasterCard Card. Cardholders will earn 3% cashback at gas stations, office supply stores and for computer network services, 2% cash back at restaurants and 1% cash back on all other purchases. There is no annual fee to own this credit card and it comes with a 0% intro APR on purchases for the first nine months.
The Business Platinum Card® from American Express OPEN
The most powerful of business credit cards, the Business Platinum Card from American Express OPEN provides its members the best perks any business card can. Complimentary airport lounge passes, an annual $200 travel reimbursement and 24-hour concierge service are just some of the things every business owner will receive when owning this charge card (remember, payment in full every month). The big downside to having this power and prestige is a $450 annual fee.
Capital One® SparkSM Miles for Business
Similar to the Spark Cash card listed above, the Capital One Spark Miles for Business offers double miles on all purchases. 10,000 bonus miles are provided to businesses that spend at least $1,000 in the first three months of card ownership and another 5,000 miles are awarded when an additional employee is added. A $59 annual fee accompanies this travel themed small business card but Capital One will not charge it for the first year.
SimplyCash® Business Card from American Express OPEN
The least expensive American Express business card to own; the SimplyCash Business Card from American Express OPEN provides cash back on every purchase. It’s earned based on purchase categories; 5% cash back on office supplies and wireless services, 3% cash back on auto gasoline and 1% cash back on everything else. Cardholders can save an additional 3% – 10% on select merchants like FedEx and Hertz and are also offered a 0% intro APR on purchases for 12 months. This card is annual fee FREE.
Capital One® SparkSM Classic for Business
The last but not least card to make this list is the Capital One Spark Classic for Business. This is actually the small business card I own, and I chose it because my credit score would be classified as below-average to average. The card offers 1% cash back on all purchases and does not have an annual fee. The upside is that it’s perfect for a small business owner with less than excellent credit … the only card on our list which is offered to mid-600 FICO score consumers.
About the Author: Founded in 2004, CompareCards.com is an online resource that provides expert reviews, tips and tools to find and compare credit cards. Visit CompareCards.com today and review the credit card deals that fit your lifestyle and/or current needs.
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Why Every Entrepreneur Needs a Blog
In this fast paced world, things are becoming more technical. We have entered the digital economy and most people nowadays are dealing with the largest network in this universe, the internet. Almost everybody, during week days, spend time in their offices in front of a computer, surfing and working through internet. During week ends, they are at their homes, still slumped in front of their laptops, desktops or tablets, spending their days off with what Facebook can offer them.
Gain Online Presence
At one point of your existence in the cyber world, you have ‘googled’ yourself (no need to deny it, I’ve done it myself). Google is probably the most checked site by everyone. It is fascinating that this site could know almost everything about anything.
If you want to be found by your target market, make yourself visible by putting up your website and market the products or services you offer. Make it more interesting by having a blog site as well. It is more convincing if the approach you use is on a first person basis, like talking directly to your niche. People greatly consider anecdotes and testimonials to support their decisions in acquiring your services or products.
Inform The Market
A blog site is meant to inform people. For example, you have this on-the-spot-promotion like some airlines do nowadays. You can easily do that kind of promotion to your blog site. Such announcements can be very viral that it can reach your whole market.
You can also use your blog to describe your products or services extensively. If some of the viewers would have comments or questions, you can respond to them immediately since you are the administrator of your own blog site. The Blog-Site is meant to inform both your market and you yourself as an entrepreneur. It’s a two way communication.
Co-relate With Other Entrepreneurs
One cannot grow without the help of other people. Competition is not always the case. Sometimes, an entrepreneur also needs new ideas or suggestions from some experts in the same field. Blog sites, being in a more personal approach, help entrepreneur bloggers to co-relate with each other. You can learn from them and vice-versa.
Having your own blog can help you gain more contacts, in connection, to your business or market niche. I believe everyone has the potential to be the next world renowned business tycoon. This only means that there are things that you know but others do not, sharing them through your blog will give you authority and people will look up to you for the great content that you share with them. Letting your business relationship grow helps you as a person and your being an entrepreneur. Your experiences can be a great deal of help to other upcoming entrepreneurs, or vice versa! Business people can benefit from having their own blog site. Not only they can inform their market about their products or services, but it can also offer relevant information to other businessmen who may need it.
One should not be satisfied with their current market reach. There are a lot or other mediums to reach out to potential clients, especially in the World Wide Web where people are online 24 hours a day, 7 days a week. Make entrepreneurship a more fulfilling experience by sharing your own experiences and ideas in your own blog site. Be an inspiration to many!
About the Author: Jessica Francisco is a cheerful 25-year-old with an odd sense of fun. The least of her broad range of hobbies include swimming, hiking and listening to the music of Michael Jackson. Jessica is also one of the editors of Luke Roxas.
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4 Free Tools for Managing Your Small Business Finances
Every small business dream begins with the simple idea of making money while providing a needed product or service. As businesses evolve, their proprietors quickly learn that the product or service isn’t where all the effort is; tracking, managing, and even getting the money all take their fair share of work as well. While financial management can (ironically) be costly if you don’t have the right tools, there are plenty of free resources to help organize your business’s income, saving time and money. Keep your business on the right track (and out of debt) by taking advantage of these 4 free tools:
Mint
One of the most popular free finance tools is Mint.com, an online application that allows you to manage all of your financial accounts in one place. The clean, streamlined interface makes it easy to use, giving this tool major brownie points. Mint works automatically, pulling information from your checking, savings, investment, and retirement accounts, and displaying it visually with handy graphs and charts.
Beyond account monitoring, this tool helps you set a budget and financial goals, making it a valuable asset for any small business. The icing on the cake is Mint’s mobile device support and integration, enabling finance tracking on-the-go.
Sage Billing Boss
Who said invoicing had to be complicated (or costly)? This feature-rich invoicing system allows you to organize customers, track payments, and even collect money. You might be expecting a customer limit or an upgrade fee hidden somewhere, but all of Sage Billing Boss’s features—including unlimited invoices and customers—are completely free.
Built especially for small businesses, this tool integrates handy options like recurring invoicing, online payment tracking and quotes. If you’re looking to get organized and save time on small business invoicing, Sage Billing Boss might be all you need!
Google Wallet
Previously Google Checkout, this tool serves as a virtual wallet that securely holds your payment information for faster purchasing and better tracking. Google Wallet helps make light work of online purchases, storing your credit card and billing information for easy access when you pay through a merchant’s Google Checkout button. It offers fraud protection and even helps keep your email address confidential, keeping unwanted emails at bay.
Google Wallet’s latest feature is the ability to make purchases in-store using its mobile app; just tap the phone on participating credit card devices (at the time of this writing it only works with the Nexus S 4G phone).
Moneytrackin’
The key to staying organized is keeping relevant information together in one simplified location. That’s what Moneytrackin’ promises to do with its free online app. Keep tabs on income and expenses on all of your accounts, tagging transactions for easier grouping. If more than one person is involved with your business’s finances, you’ll appreciate the collaborative working capabilities this tool offers, including budget-sharing. This may not be as robust as Mint’s application, but it offers a clean-cut solution to organizing and keep track of your company’s finances.
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About the Author: Chris Turberville-Tully is a marketing strategist for Personal Touch Debt Solutions, a debt management company providing personal security, debt payment plans, expert advice and more.
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Happy Holidays May Be Better Than Merry Christmas
As a business owner, you understand how important it is to be accepting of your customer’s various beliefs and ideas. While you may have different beliefs or ideas, when it comes to making a good impression on your customers, accepting theirs is vital. At the holiday season, you may want to avoid the overtly religious cards in favor of more generic options.
Know Your Audience
To you, the greeting “Merry Christmas” may seem completely innocent. However, some people are sensitive to the underlying religious connotation of this greeting. If they do not celebrate Christmas, but rather celebrate Hanukkah or Kwanzaa, they may feel put off by a traditional Christmas card.
One way to avoid offending someone on your holiday list is to tailor your cards to each customer. If you know the religious bent of your customers, you can send an appropriate card. It will make a tremendous impact on your Jewish customers, for instance, if you specifically target them for a Hanukkah card, rather than a Christmas or generic holiday card.
This, however, is quite time consuming, and may not be possible in a business where you do not have that level of personal information about your customers. You will have to evaluate whether the potential benefit you could receive is outweighed by the additional time and effort you would have to expend to personalize your greeting this way. The answer may depend on the size of your mailing list. In instances where personalized attention is just not practical or possible, a generic holiday card may be a better option.
Generic Can Still Work
If you decide to go the generic route, you still need to pay attention as you select your card. A card that says “Happy Holidays” may still have a holiday specific picture on the front. Safe images are peaceful winter scenes, pictures of wreaths or other generic holiday décor, and even doves with an evergreen branch in their mouths.
These rules may not apply to your business if it is a religious based business. A church or Christian bookstore, for instance, can safely assume that most of its customers, if not all of its customers, follow a similar set of beliefs. Thus, sending religious holiday cards is safe and probably expected.
Even if you must go generic, be attentive to the quality of the card. Generic does not have to equate cheap. Take the time to find quality, yet appropriate, cards so that you can effectively reach your customer base at the holiday season, regardless of their beliefs.
About the Author: Monique Trulson works for eInvite invitations, an online retailer of holiday cards for business, destination wedding invitations, party invites, announcements and more.
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5 Credit Card Processing Must Knows
Here are 5 critical questions you must ask your current or prospective processor to make sure that you are not getting completely ripped off! It’s hard enough out there folks, you don’t need to give money away.
1. What pricing model am I on? Tiered (Bundled) or Interchange Plus (Pass Through)?
- If they say tiered, move on to the next processor. This pricing model is the most costly.
- If on Interchange, you will receive your proper credits from the Durbin Amendment and exchanges, unlike with Tiered pricing.
- Also, if the processor does offer Interchange Plus, what is the markup? This is the one portion cost that can be negotiated. Processors may hide exorbitant processing markups within this pricing such as their transaction fee and their rate.
2. Do you have an early termination fee/policy? What is it?
- Contract terms will likely be in 1-3 year increments. Should you terminate your contract early, you may be susceptible to a flat fee of say $300.00. In some cases, the processor may take the average processing income they made off you in the previous 3 to 12 months and multiply that by the number of months that you have remaining on your contract.
- If you are already on a tiered pricing model and you have a low flat fee to terminate your contract, do it. You’ll make up the loss in no time by switching to an Interchange Plus pricing model with a low processor markup.
3. Do you rent your equipment or sell it?
- This is a big one. Many processors will try lease you a credit card machine for a low flat rate of $30 per month. The problem is that you may have to sign a 3 to 5 year lease when the unit sells for only $100.00!
- It’s always better to purchase equipment rather than leasing it.
- Also, do not buy proprietary leasing equipment that will only work with a particular processor. In the event that you want to change processors in the future, you want to make sure that you have a compatible setup and don’t have to buy all new equipment.
4. How long are my rates good for?
- Processors may coax you in with great rates, but what they fail to tell you is that the rates may increase in a few months. Once the magical hour of midnight hits on your last contract day your “real” rates will kick in and there will be nothing that you can do about it.
5. What are your rates?
- It’s best if you are in the driver seat. Get organized and create a spreadsheet before you start making calls to processors.
- Research what rates are acceptable per your industry and come up with a list of demands for your processors.
- Let them know what your terms are. The following items must be on your demand list.
- I will only consider interchange pass through
- Give me your best rate up front as you will only have one opportunity to do so
- I will not lease my equipment
- I will not pay an early termination fee
About the author: Jason Ezzo helps businesses save an average of 45% on credit card processing services at CardFellow.com. CardFellow is a free Web site that allows businesses to receive multiple interchange plus quotes from leading processors instantly. We’re ready to help you keep your credit card processing fees to an absolute minimum.
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4 Traits of a Good ISP for Small Businesses
Whether you’re working from home or providing internet to your small business’s office, there’s more to consider when choosing an internet service provider (ISP) for business than for personal use. Even with an office of only 8 people, internet failure for one hour means an entire business day’s worth of productivity went out the window. While no internet service can be perfect all the time, some providers are more reliable than others. If you’re looking into a new internet service for your small business, be sure to keep an eye out for these criteria:
24/7 Customer Support
Technology is not always our friend, which is why you need the best friends you can find at your ISP. A quality tech support service will be available any time of day (if you work from a home office, you know 1am is not an unreasonable time to need service). The speed with which an issue is given attention and even the courteousness of the staff can make all the difference in the world when you are experiencing problems. Investigate whether your provider has local support that can visit your location if an issue cannot be resolved over the phone. Perhaps the best way to gauge the tech support is to ask friends who have used the service; if you don’t know anyone personally, check reviews on reputable consumer watch websites like consumer search.
IP Address Options
Your IP address, or the identifying number assigned to your computer as it connects to the internet, can take one of two forms: static or dynamic. Dynamic IP addresses draw from a pool of addresses that gets shared among other dynamic users. It usually changes each time the user logs in, and several users will often be assigned the same number at the same time. This is often the cheaper option of the two and is acceptable for less internet-dependent businesses. Static IP addresses stay constant and are recommended for VOIP (Voice Over Internet Protocol) or for using your computer as a server. It’s more expensive than dynamic hosting and is allegedly less secure because it is easier to track an unchanging address — but it is indispensable when you have more rigorous internet needs. Make sure your ISP provides the IP Address options you need, and allow for changes if your needs change in the future.
High Bandwidth
Of course, no discussion about ISPs would be complete without touching on bandwidth. This number, measured in megabytes per second (MBPS), the big selling point ISPs use in their advertising, but you should be aware of the fine print. Bandwidth comes in two forms: upstream and downstream. Downstream bandwidth is the speed that users can download data from the internet – the bulk of most internet usage. Upstream bandwidth—the speed with which you can upload items—is typically a fraction of the downstream speed, but should be considered if your business requires large files to be uploaded on a frequent basis. Be cautious when comparing advertised bandwidths; usually, the number you see is the maximum speed under the most optimal conditions. The actual speed may be lower, so you should investigate the minimum guaranteed speed.
Included Security
A good ISP will include a security package for you. Security is important for any user, but it’s crucial for a business owner. Features should include firewall protection, which is software or hardware that protects your computers against outside attackers. Both hardware and software firewalls offer specific advantages, but the best protection includes both. Other security features an ISP may offer include virus protection and identity protection software, data backup, and network monitoring. Evaluate the security features offered by various ISPs to determine who offers the most; if you are sold on an ISP that offers less free protection than the competition, they may offer more if you tell them you are considering another company that offers more.
About the Author: Chris Turberville-Tully is a marketing strategist for NewNet, a UK-based internet, hosting and networking solutions company. NewNet services include data centres, dedicated servers, web hosting, business ISP and more. Follow NewNet: http://twitter.com/#!/NewNetISP
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Four Bosses to Avoid Like the Plague
Bosses Day is today – October 17. If you have a great boss, let them know how much you appreciate them. Who knows, maybe they’ll appreciate your thoughtfulness enough to add a little cushion to your holiday bonus.
And if you have a terrible boss… then it sucks to be you. Few things make going to the office day-after-day and week-after-week worse than a really terrible boss. Here are a few types of bosses that you should do whatever you can to avoid.
The Narcissistic Boss 
This boss thinks that everything is about them. He or she will strive to look and act perfectly in front of their superiors, but when they aren’t putting on a show, the claws come out. These bosses will sweet talk you to your face then steal all of your best ideas and pawn them off as their own. Watch out for the extreme version of this boss – The Sociopath.
The Idiot Boss
This sad excuse for 
a boss got promoted to his or her current position because their dad owns the company or the system just failed in a terrible, terrible way. This boss not only drains your energy level, he or she brings half-ass work to the higher ups, which reflects poorly on you. Do whatever you can to get away from this dead-end boss.
The Inappropriate Boss
This boss is one of the worst because he or she makes the work place uncomfortable on a regular basis. This is the boss who calls the girls sweetheart or gives the guys a slap on the butt. Basically, he is a sexual harassment lawsuit waiting to happen. If you have this boss, don’t be afraid of the system – report them as soon as possible.
The Cruel Boss
Possibly the most demoralizing of all bosses is the one who is mean spirited for no reason. This boss gets off on making his or her employees feel small and invaluable. Don’t let your soul be crushed by a boss like this. Apply for a transfer, and in the meantime, try not to take it personally.
Your Turn…
Have you ever worked for one of these demon bosses? What nightmare boss did we leave off the list?
About the Author: Greg Buckskin is a writer and marketer for CableTV.com.
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4 Lessons Learned From Mistakes of Internet Past
The speculative bubble of “dot com” era was a period of rapid growth followed by a significant decline between 1995 and 2000. Many of the companies that prospered during this brief explosion relied on venture capital and initial public offerings to cover expenses.
They valued growth over profitability which later led to significant problems. Companies soared to incredible heights on paper with little actual value, leading to numerous repercussions in the financial world. Even at the time, one didn’t need a PhD to see the problems in online businesses, Companies of today may learn from the mistakes of this time.
1. Using IPOs and Venture Capital for Expenses
Many successful businesses such as Amazon.com, Google, and eBay survived the dot com era. Amazon and Google in particular relied on IPOs and venture capital for expenses, used the free spending strategy, and valued growth over making a profit in the first few years as their stocks soared exponentially. During this time, the founders mostly had no income. Many people profited from this speculative wealth that ultimately led to crash. Educated investors knew the crash was coming and thus profited from the companies’ growth and got out before the stock market crashed. Companies should have a plan for profitability and capital for expenses to avoid this pitfall.
2. Failure to Develop a Solid Business Plan
Businesses should develop plans that include strategies to become profitable within a short time. Investors are more astute since the ’90s’ dot com bubble, and are less likely to invest in companies when the stock prices are overvalued and the fundamentals aren’t favorable. Profitable business plans should include a strategy for marketing, sales, product development, and asset acquisition. Without both long-term and short-term strategy, businesses will fall victim to using the Internet for growth with little concern for their sustainability.
Dot-com-era business all had similar business plans essentially promoting a monopoly in each particular sector. Ultimately, this strategy would allow only one company to emerge successfully and the majority would fail. Moreover, some businesses’ ideas simply didn’t pan out. For instance, online retailers didn’t consider that huge shipping costs would deter users. Their business plans and models were not well researched and didn’t anticipate potential problems that e-commerce would bring, but just relied on the momentum of the public to propel the ideas.
Businesses with novel ideas that will change the way people interact in the world should recognize that these ideas are not developed instantaneously. Many companies have become seemingly successful overnight, but other vital events happened to prepare them for this success. Every company should recognize that not every idea will be profitable immediately.
3. Free Spending
Venture capitalists were freely giving money to business owners, and business owners were freely spending it in turn. They purchased lavish items for the business, took expensive trips, and stayed in luxury hotels. Executives were paid in stock options as opposed to cash. Many of the founders became instant millionaires after the IPO, then founded more dot com companies to repeat the cycle of empty explosive growth. Businesses need to spend prudently until they become actually, sustainably profitable.
4. Predictive Tools Not Used
Many business owners mistakenly expected the adoption of the Internet to be immediate. Current and historical data should be gathered and analyzed to avoid similar mistakes with other new technologies. Numerous tools have been developed since that time to help investors and business owners analyze the market. With these tools, business owners may better be able to identify ideas that don’t have the potential for longevity.
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These are just a few problems that occurred during the dot com era that were detrimental to companies. From the business plan designed to create monopoly to the lack of use of predictive tools for success, the dot com era was plagued with mistakes. The self-made millionaires of the time might disagree, as well as companies such as eBay, Amazon, and Google that survived the crash and continued as internet giants. They are, though, the exceptions, not the rule. In general, businesses should adhere to basic models and principles with proven success rates, even if a lucky few have managed to shoot the moon.
About the Author: Elaine Hirsch is kind of a jack-of-all-interests, from education and
history to medicine and videogames. This makes it difficult to choose just one life path, so she is currently working as a writer for various education-related sites and writing about all these things
instead.
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6 Signs Your Small Business is Set Up for Failure
In a day and age when the economy is not being very kind to many companies, how can your small business get its footing, especially when just starting out?
As many small business owners know, starting a new company even in the best of financial times can be challenging.
According to numbers from the Small Business Administration (SBA), seven out of 10 new employer establishments survive at least two years and 51 percent survive at least five years.
While those numbers help to dispel the long-standing belief that many small businesses fail in their first year, the facts are many do just that. Oftentimes, it comes down to simple decision making items like finances, to grow or not grow the staff, being an online fixture and so on.
Challenges Facing the Small Business Owner
In order to get a small business successfully up and running, companies need to build a positive revenue stream, advertise their business, and in many cases hire employees and more. When all is said and done, it can be quite an expensive venture.
While small business owners need to be positive in their venture, they also need to look out for the traps that await them, potentially leaving them in financial peril for years to come.
Among the 6 challenges to steer clear of are:
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1. Beginning a business for the wrong reasons – The reasons can include wanting to have a business to make a bundle of money or getting away from micromanaging managers. While those may be popular reasons, they can also lead one to disaster;
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2. Not having enough financial backing – Too many small businesses start out with good intentions, but they don’t have the financial capital that is truly necessary to make a go of it. While putting one’s business plan together, make sure that the necessary financial capital is in place, including being able to weather some tough times and/or until sales outpace expenditures;
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3. Being a poor manager – Whether the new small business is a one-person show or will involve a number of employees, it is important that solid managerial skills are in place. As many small businesses that have gone under after a short period of time can note, the way things were run could have been better. It is important for small business owners to know how they want to run things from the start, be able to adjust to issues, and know how to manage people if part of the scenario;
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4. Locating the business in the wrong area–If one’s small business is easily accessible and in a high traffic area, the odds are obviously greater for more business. Being located off the main thoroughfare, meantime, can be the death sentence for even a well-planned out business. When shopping for a locale for one’s small business, it is important to determine foot and motor traffic, where competitors may be located, any crime issues in the neighborhood and more to put the business in the best location to succeed;
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5. Growing too quickly – While success early on is great, too many small businesses try and grow too fast, leading to financial issues. As part of one’s business plan, map out the goals of the company and when growth may or may not be a possibility. Sometimes it is best to hold off on expanding the company in order to build up reserve funds, and then expand when the financial timing is better. If thinking about expanding, determine if the current workforce can handle the added work before bringing on new employees and having to factor in salaries and healthcare;
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6. No or limited online presence–In today’s electronic age, too many small businesses still do not put enough emphasis on having a strong Web site presence with which to market both their products and services. By not doing that, they lose out on the ability to interact with both current and potential customers. As more customers turn to online shopping for their needs, small businesses that are hesitant to do so stand the chance of missing out on potential revenue.
Small businesses are the backbone of the American economy; the key for small business owners is to be sure that they put themselves in the best position to succeed, something which is no small task in this day and age.
About the Author: Dave Thomas, who covers among other subjects vehicle insurancewrites extensively forwww.business.com an online resource destination for businesses of all sizes to research, find, and compare the products and services they need to run their businesses.
Photo Credit: Paul Keller
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What the Heck is the Durbin Amendment? (And How Does it Affect Your Business?)
Retailers may now refuse credit card purchases below $10 or charge a dollar for these purchases. The Federal Reserve was given the right to issue this rule and to decide the minimum purchase amount. It was set at $10. The Federal Reserve could change the amount. This new rule was approved by the Congressional “Durbin Amendment”.
The minimum must apply to all cards equally. Therefore, small businesses may wish to save money by setting a minimum $10 charge on Visa, MasterCard and Discover purchases. This may save on credit card processing fees which often eat up profits from small transactions.
A Level Playing Field?
The small business community is happy to be protected from profit-eating small transactions. However, just regulating it does not necessarily level the playing field with regard to the credit card processing fees which are very costly for small businesses.
Shopping around for better processing servers is the only way for small businesses to retain more profits from credit card transactions. Not every server charges the same fee, and small businesses can find a better deal by seeking out a better partner for processing debit and credit cards. Some companies claim to be able to save retailers up to 40 percent; so it is worth finding out if the costs are low enough to warrant switching.
Fixed and Non Fixed Costs
As you may know, two costs are fixed: interchange rates and assessments. Interchange rates are set by the card company and cannot be changed in a processing agreement. Assessments are a series of rates and fees that are the same for all card companies.
There are at least two non-fixed costs that you can use to negotiate lower costs. Insist on interchange pass through pricing. It does not have surcharges nor does it charge more for larger transactions, known as tiered pricing. Also, you should insist on a contract without cancellation fees. They may say that its standard business practice, but that doesn’t mean you have to accept it.
How Will Companies Handle Their New Right?
In terms of the Durbin Amendment, it does represent a major change from the long standing practice of Mastercard, Visa and Discover which required retailers not to set a minimum. If small businesses tried to set a minimum on the use of these cards, they would have been in violation of their contract. This was true despite the fact that small transactions are charged the same fees as larger ones. Thus, the profits from a small transaction were quickly canceled out by the credit card fees. The effect of this amendment depends on how large companies handle their new found right; otherwise small businesses will feel held back from requiring the fee or denying the charge.
Debit card purchases cannot be held to a minimum. These were not included in the amendment. Credit card processing contracts by the big three credit card companies state that no minimum may be imposed on debit card purchases. The Durbin Amendment did not include debit card purchases when it gave power to the Federal Reserve to regulate credit card processing minimums.
About the Author: This post contributed by the cofounder of CheapestMerchantAccounts.com, a website devoted to assisting small business owners in finding the best merchant account for their business with the lowest overall costs. Our reviews compare merchant service providers on the rates offered, presence of contract/cancellation cost, as well as the customer service experience a merchant will have once they sign their agreement. Their website covers many of the top processors in the industry including niche players as well as large enterprise processors such as Elavon.
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When Small Businesses Need to Collect on Outstanding Debts
When the economy is in the current shape it is, it behooves small businesses to make sure they’re collecting on any outstanding customer debts. That being said, what are the best ways to go about doing that? Read more
Small Biz Benefits from Mobile Apps
A new survey from the Small Business and Entrepreneurship (SBE) Council reveals that mobile apps may be the new BFF (best friend forever) of small business owners. By tapping into the power of apps for credit card processing, GPS navigation and contact management, merchants and service providers can save time and money that’s better spent on growing their business.
Time Savings and Efficiency
According to the survey, small businesses save an estimated 725.3 million hours annually by using mobile app technology. That figure roughly translates into $17.6 billion in savings.
Over 300 owners of companies with 20 employees or fewer participated in the SBE study. Thirty-one percent reported incorporating mobile apps into their daily business routines, and 51% felt the apps made their companies more competitive.
Not Going Anywhere
The small business owners indicated that mobile apps are here to stay — an opinion shared by the SBE Council. “It will no doubt grow when you look at the expanding use of smartphones and iPads and related tablets,” predicted its chief economist, Ray Keating.
There’s an App for That
In addition to apps for credit card processing, other apps that are popular with small businesses included travel planning, remote document access, banking and finance management, social media marketing and location-based services. When you’re on the road and need to stay in touch with your customers and employees, mobile apps allow you to do so in a much faster and more effective manner. There are even mobile apps that allow you to remotely connect to your home or work computer!
Business owners who are interested in apps for mobile credit card processing should talk with their merchant services provider to arrange for the necessary merchant account to support the process.
About the Author: Marc McDermott is the Online Marketing Manager at Merchant Express, a provider of transaction processing services and payment processing technologies with a specialized approach to online credit card processing, merchant bankcard processing and transaction processing services.
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Is Your Business Set Up To Flourish… Or Fail?
Great looking business cards? Well, maybe you shouldn’t hand them out just yet.
While conducting business seminars during my career at the Internal Revenue Service, I discovered that many new business owners had excellent products or services to offer potential customers, however, they needed professional help when it came to business planning and selecting an appropriate business structure.
The Importance of the Plan
To increase the possibilities of success, a strong business foundation should exist before operations begin.
Remember this: business success only occurs when preparation meets opportunity.
A business plan guides the business owner through the steps that are necessary to start the business and keep it on track.
The plan must include:
- Description of the business – What is being sold?
- Market analysis – Will people buy the product or service?
- Management – Are the business managers qualified?
- Operations – How will the work get done?
- Financial – What are capital, income and expenses projections?
The business plan will assist a new business in accomplishing the major tasks of financing the business, producing the product or service, and marketing the product or service. Of course, there are other critical business tasks, such as finding suppliers, hiring employees and developing an accounting system.
Pick the Proper Structure
As for the law, there are a number of legal structures that can be selected for a business. The most common are sole proprietorships, general and limited partnerships, C corporations, S corporations, and the Limited Liability Company (LLC).
Which is best? Well, that depends…
Each legal structure consists of organizational options that are appropriate for different business situations and which affect income tax and legal liability issues.
For someone working alone, a Sole Proprietorship is a business owned by individual person. It is the simplest legal structure. The individual person, the proprietor, has the right to all of the profits generated by the business (that’s the good news!), but is also responsible for taxes on income, business debt, and legal liability.
If multiple persons are involved – and hopefully work well together – a Partnership could be formed. This is a business owned by two or more individuals who enter into a formal agreement to contribute their funds and other resources to business and to share profits. Each partner pays income taxes personally. General partners make management decisions, actively participate in the business, and are personally liable for the financial obligations of the business. The liability of limited partners however, is limited and to the amount of their investment.
In a C corporation, shareholders (owners) transfer money, property, or both, for the corporation capital stock. A corporation is a legal structure in which the owners are not personally liable for the financial obligations of the business. They can lose only the money they invest. A corporation takes the same tax deductions as a sole proprietorship to determine taxable income. Special deductions are also allowed
The profit of a corporation is taxed to the corporation when earned and then is taxed to the shareholder when distributed as dividends. This is known as “double taxation” (ouch!)
An S corporation is exempt from federal income tax except for taxes paid on certain capital gains and passive income. Shareholders include on their personal tax returns their share of the corporation income, deduction, loss, and credit.
Finally, a limited liability company (LLC), is a very popular form of business organization. It provides some of the benefits of partnerships and corporations. As in a partnership, the company does not pay income tax. Each member pays income taxes personally. LLC members have the same limited liability as corporate shareholders and are not personally responsible for the debts of the company.
Well, since every business needs to have a foundation from which it can “flourish”, there may be a few things for you to think about before you start passing out those business cards…
About the Author: Lyndon Ford, Enrolled Agent, MBA is a former IRS Agent and host of the “Tax Trouble Help Show” which is broadcast on News/Talk 1400AM WDTK Detroit or internet streaming on WDTKAM.COM. The show can be heard “live” on Saturdays at 7:30AM EST and on replay, Sundays at 5:30PM EST. Podcasts of the show and information about and nationwide IRS tax trouble representation services we offer can be found at www.taxtroublehelp.com or call 877.249.1383. IRS audits, collections (liens, levies), and unfiled tax returns. In Tax Trouble? Don’t Worry…We Can Help!
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7 Must-Know Tips for Outsourcing Your Business
As an entrepreneur, you are probably more than familiar with having to juggle everything at the same time. Overseeing payroll, human resources, special projects, advertising, etc. – it can easily become costly and overwhelming. In an effort to save both time and money, however, many businesses outsource certain tasks.
For example, if your company’s business deals with e-commerce, you may not need to pay someone on-staff to answer your phone. Instead, outsourcing to a call center may be a better move. Or maybe you don’t have a web designer on staff but you need one to redesign your website. Rather than looking to hire one, you can have the project outsourced to fulfill your temporary needs.
In both examples, outsourcing is beneficial because you are able to manage your resources and handle issues or operations that you don’t necessarily know how to do (or just don’t want to do), and in most cases, you can save money. However, not doing your research can cause you to lose money, have high turnover and stifle your growth. Your outsourcing success rate really depends on your type of business, the quality of the provider, and the services you choose. If you observe the following tips, though, you can start heading in the right direction.
1. Determine Your Needs
Identify the work that isn’t a part of your core mission of business and then consider the following:
- Can someone external to your company do the work better than you can?
- Will outsourcing save you money?
- Will outsourcing enable you to put more of your resources and focus elsewhere?
Careful consideration of this step is vital to your success. If you are unable to be clear about what your needs are, how will you articulate those needs to an outsourcer? Again, make sure the work you outsource doesn’t entail lots of oversight, because if it does, it might have been better to just handle the job in-house.
2. Be Picky
When picking an outsourcer, request to see their previous work before you make a decision about whether or not to hire them. Are they fully equipped to handle the job? Say you outsourced your web design – do the designers have wireless Internet cards for their laptops if they suddenly have to travel during the work week? Are they available through email, phone, and several other means? A bad decision at this stage can cost you money down the line and compromise your entire operation.
Also, if they can’t show you something tangible for a previous work sample (if you’re outsourcing to a call center, for example), be sure to get some references. It also might be a good idea to check out their page at the Better Business Bureau.
3. Take One Project at a Time
So you identify a vendor and are presented with a two-year contract. Not so fast! Don’t sign any long-term contracts until you’ve seen that this provider has had success on smaller projects. If possible, test the outsourcer first by giving them a comparatively small task to accomplish. Their ability to handle this project well will prove whether they are a good match in the long run.
4. Brace Yourself for Challenges
As great as it would be to immediately hit the ground running with your new provider, realistically it will take some time to synchronize operations and build a professional relationship. In order for outsourcing to work, you and your staff are going to need to be patient and prepared for small missteps that may happen in the beginning. For example, if your provider is off-shore, there will be time-zone differences that can hamper proper communication. Setting up a realistic schedule that meets your needs may take some practice. If all parties are invested, though, a little practice and management of expectations will sort things out.
5. Be Aware of the Full Costs
Many companies outsource to save money, but outsourcing can get pricey too. Are your outsourcing projects going to require you to employ telecommuters or freelance staff who work remotely? If so, this could be costly depending on where the workers are based. What about equipment? Do the outsourcers have their own or are your fronting the bill? Make sure to get as much information as possible about the total costs – before it’s too late.
6. Are Your Expectations the Same?
Are all involved parties clear about what the end result should be? Miscommunication about benchmarks can cause a maelstrom of issues. Be clear about communicating what success looks like as well as when you expect to get there. If possible, provide the outsourcers with a concrete example of what you’d like their finished product to look like. For instance, perhaps you are outsourcing the redesign of your site. Is the vendor up to speed with the latest content management systems and development software? You should know what capabilities you want your site to have and ensure that your provider has already been able to provide that level of quality to other clients before giving them the job.
7. Prepare for Cultural Differences
If you are outsourcing abroad, you definitely need to be aware of the cultural differences that will arise. Outsourcing your calls, for example, would mean your provider would need to be attuned to the cultural and social customs of your business. If you’re outsourcing web design, you’ll want to make sure that the language your provider will be using fits your demographic. Customers are very observant and can tell very quickly if the message they are reading is of a low quality or poorly translated.
It is no secret that outsourcing has become the strategy of choice of the majority of American businesses. In 2008 alone, almost half of U.S. businesses took part in off-shore outsourcing. With some research and deliberation, outsourcing can be a valuable alternative for you too.
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Top Tips to Staying Motivated When Working from Home
People who trek to an office everyday often bemoan the fact and wish they could work from home. And while many home-workers are quick to point out the advantages of a stay-at-home job, they will relay the downside just as quickly. So really, it’s not all it’s cracked up to be. Read more
