Setting Up Your Small Business for Accepting Credit Card Payments

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StrategyDriven Managing Your Finances Article |Credit Card Payments|Setting Up Your Small Business for Accepting Credit Card PaymentsIf you own a small business, then you should be aware of how important it is to offer your customers the option to pay via credit card. Without this option, you may find yourself actually losing money. This is because, many times, people will walk into a business already expecting there to be a credit card payment option.

If your business doesn’t offer this, then the customer might not have any other choice than to cancel the sale. With today’s technology, not many people still carry cash on them, or at least not a large amount of it. Paying with a card is quick and convenient.
So, how can your small business start accepting credit card payments? Read on to learn more.

Choose a Payment Service Provider

With merchant accounts becoming a thing of the past thanks to their contracts, many hidden fees, and their inability to provide multiple services, payment service providers are on the rise. Payment service providers are an all-in-one payment and processing system. These providers allow for small businesses to accept both credit and debit card payments without the need to open a merchant account.

Any associated fees using a payment service provider are more clear than when opting for a merchant account. And your merchant account is part of the payment service provider system. With a payment service provider like Dynamics GP Credit Card Processing, you can track inventory, manage accounts, deposit funds, and much more!

Choose a Payment Gateway

The payment gateway secures and encrypts customer information when they make a purchase through your website. It then sends the information for approval. It’s then either approved or denied instantly.

If approved, the payment is complete and the funds are deposited into your account. Many payment service providers include a gateway with their system, but others require you to purchase one separately.

Purchase the Needed Equipment

You’ll also need to be sure that you purchase all of the necessary equipment for accepting credit card payments. This differs depending on where you’d like these payments to be made.

Online

For online purchases, you’ll need a merchant account with a payment gateway, or you’ll need a payment service provider that includes both of these. You can also buy a virtual terminal, which is software that’ll turn your computer into a credit card terminal perfect for accepting purchases over the phone.

In the Store

For purchases made in the store, you’ll need a merchant account and a traditional credit card terminal or a point of sale system. Either option allows the customer to swipe, tap, or place their card into the terminal for payment.

Smartphone or Tablet

Mobile card readers attach to your smartphone or tablet and allow purchases made from swipe cards or chip cards. This is a great idea for food trucks, massage therapist, and other on-the-go businesses. Most point of sale providers offer this service.

Accepting Credit Card Payments Is Good for Business

Accepting credit card payments is the best way to ensure that your customers can make a purchase whenever and wherever they may be. Without credit card acceptance, you may find yourself losing business. For more information on the business world, be sure to check out our Insights section today!

Common Financial Problems Start-Ups Face And How to Solve Them

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StrategyDriven Managing Your Finances Article | Entrepreneurship | Business Financial Problems | Common Financial Problems Start-Ups Face And How to Solve ThemAs an entrepreneur managing a start-up business, there are many common financial issues which businesses have to face. From start-up capital to a lack of investment, there are many potential aspects which can become mismanaged. However, although it may not be possible to avoid these issues, there are ways that you can solve them to maintain your financial security for the future and ensure that your business is least affected as possible.

1. Bad Credit Scores

One of the greatest stumbling blocks for entrepreneurs looking to start up a business is their credit score. A bad credit score can make it increasingly difficult to get loans to increase the funding for your business, among other important aspects. However, a bad credit score is not permanent, and there are procedures that you can follow to increase your credit score, such as bad credit loans. Taking out small personal installment loans for your personal finances and paying it back on time will mean you can increase your credit score and show potential investors that you can manage repayments on a routine basis. Therefore, when you look for funding your business using a loan, you will have an easier time to get one.

2. Lack of Funding

A lack of funding can also be a big hindrance to potential start-ups. Many entrepreneurs look to their own savings accounts to fund their businesses, and you can build up your funds in terms of this by saving a little every month and by choosing a savings account with a good interest rate. If this fails, you should consider getting a personal loan off a friend or family member, as this will be easier to repay and will not affect your credit score. However, if this is not possible, there are many schemes and funds which can help you to increase your fundings, such as government small business funding as well as grants and awards run by investors from large businesses.

3. Invoicing Issues

Another common problem for start-ups is the problem of invoicing. Writing and organizing invoices can become a large issue if your clients are not paying on time or if you have not organized your invoices efficiently to ensure that you know when you are being paid. To solve this problem, you should agree with your clients when you will be paid and create a clause on your invoice, which states this. Not only this, but you should not be afraid to contact your clients via email to follow up on these payments and ensure that you are paid by the expected time.

4. Disorganized Accounting

Many businesses also suffer from disorganized accounting systems, which make it difficult to budget and file your tax return efficiently. To ensure that your accounting is succinct, clear, and updated, you should employ a professional accountant who can help you to clear your accounts and prepare for the end of the tax year. In these cases, you should also consider downloading a business finance app which can help you to track your expenditure, keep copies of receipts and help you to forecast your cash flow and budget in the future.

3 Surprising Ways Small Businesses Waste Money

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StrategyDriven Managing Your Finances Article |Managing a Small Business|3 Surprising Ways Small Business Waste MoneyWhen you are new to the business world, mistakes are an unavoidable element of your learning curve. You are still in the process of defining how to become a leader, how to run a company, or simply how to share your business ideas in a way that appeals to investors. Let’s get things straight from the start: Not everything you do will be perfect. It doesn’t have to be; nobody was born a knowledgeable entrepreneur. Mistakes are a stepping stone in building up your experience, and as such, you shouldn’t be afraid of them.

However, while some mistakes can be an opportunity for self-improvement, others can present dramatic risks for your business. Indeed, some errors can be costly. What makes them even worse is that money-wasting mistakes could easily be avoided if you were to work with an expert at your side. Indeed, if there’s one good reason why small business owners shouldn’t multitask, it’s this one: Every mishap caused by lack of knowledge or attention will drag your finances down!

Online marketing campaigns are easy to set and to scr*w up

Digital marketing campaigns are not only a popular strategy to launch your company, but the general feeling you get from a quick search on the Internet is that you can manage them in a few clicks. The truth is slightly different. While digital marketing tools are readily available for all to use and enjoy, it doesn’t mean that digital marketing is simple. On the contrary, unless you master essential digital skills such as web design, social media communication, and PPC, you can’t profit from your activities. You’d be surprised how easy it is to waste money in a poorly managed PPC campaign – we’re talking thousands! Leave those to someone who knows how to make the most of your digital presence.

Keeping on top of your bookkeeping and tax is HARD

Most small business owners choose to keep their books in-house. Unfortunately, unless you’re a trained accountant, your financial reporting might be affected by involuntary discrepancies. Errors of omission, when you accidentally fail to record a transaction, or transposition errors, when you mistyped data, can lead to more dramatic budgeting and tax issues. Additionally, managing financial reports is a specialized and time-demanding activity that is best left to experts such as Brilliant Tax. Entrusting professionals with your bookkeeping frees up valuable time, which you can repurpose on income-generating activities.

You’re wasting too much energy throughout the day

Did you know that commercial buildings account for around 20% of energy consumption in the US? Businesses don’t use a fifth of all the energy in the United States. Heating, cooling, and lighting habits in offices and commercial buildings can lead to vast wastes of energy. Many companies admit to leaving windows open while using the HVAC system, for instance. Others choose to leave the lights on throughout the night, even after the building has been deserted. Simple changes, such as making your staff aware of waste behavior can help to cut down your energy bills at the end of the year.

Small businesses have, by definition, a limited budget. You can’t afford to throw your capital away if you’re trying to build up momentum. Identifying areas of improvements can finance your future success.

5 Effective Strategies for General Contractors to Cut Costs

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StrategyDriven Managing Your Finances Article | 5 Effective Strategies for General Contractors to Cut CostsContractors need to devise ways to cut costs in order to remain profitable. With increased competition, the need to cut costs has become important now more than ever.

Eliminating people is not the right way to cut costs. This will only stifle the ability of your firm to make a profit. Instead, you should look for other ways to cut costs and boost profitability.

1. Cost Audit

The first step in cutting costs should begin with a complete audit of the existing expenses. You should consider ways to reduce operational expenses.

You can relocate the office to a location where the rent is lower. Also, you can consider the shift from in-house to cloud operations to cut overheads.

A lot of contractors subscribe to different software services yet don’t use most of them. Consider whether the services really add value to your business by saving time or improving efficiency. If not, it’s better to cancel the subscription.

2. Time and Contract Clause

Instead of Under-the-contract-price, you should consider adding the add-to-exceed clause. In the former case, the owner of the project only has to pay a fixed cost that includes overhead and profit. This is not necessarily the most cost-effective approach.

Instead, you should consider the time and materials contract. This is a type of contract consist of the following three terms.

  • Actual material costs
  • Actual direct labor costs at a specific hourly rate
  • Agree on add-on to cover profit and overhead

The main benefit of this type of contracting is flexibility. This cost structure allows you to adjust requirements, replace features, and cater to changed user requirements without taking a hit on the bottom-line.

3. Seek Multiple Bids

When working with a sub-contractor, you should consider multiple bids. This may take additional time, but the effort will be worth it in the end.

You may have to send lots of emails and hammer the phones. But this will allow you to lock in on subcontractors that offer services at the least costs. This extra work will help in significantly reduce the internal expenses.

4. Inspect Your Schedule

You should keep an eye on your schedule for any potential stacking or acceleration of activities. Compressing the schedule will allow you to squeeze cost advantages. Time is money and any time that is saved will have a positive impact on the company’s bottom-line.

5. Financial Prequalification

You should prequalify all subcontractors to reduce the risk in case of cost escalation. This is particularly important if the subcontractor will bear most of the risks. It will help in absorbing any deviances in a project that result in increased cost.

By financial prequalification, you can get assurance that the subcontractors will be able to absorb any costs overruns. Some of the criteria that you should consider include pipeline, days of cash, and work in progress.

The above tips can help in greatly reducing the contracting costs. Consider adding an escalation clause in all your projects as well. This will pass on the risk of cost increase to the project owners.

Understanding Hard Money Business Purpose Use Loan and The Benefits for Investors

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StrategyDriven Managing Your Finances Article |Hard Money Lending|Understanding Hard Money Business Purpose Use Loan and The Benefits for Investors Contrary to what the name suggests, hard money does not involve questionable lenders who conduct their business under the table and charge inflated interest rates. In fact, that is not even close to how one would define hard money loans.

So, what are these loans then? They are short-term, interest-only mortgages that buyers use to purchase and rehabilitate damaged properties. Typically, the loan repayment time is 12 months. However, there are some situations where the loan term can be stretched to two to five years. The payments need to be made monthly and they must comprise of only interest or interest with some principal repayment.

The value of the subject property at the time of applying for the loan determines how much loan amount buyers are eligible for. The property for which a person gets a hard money loan does not necessarily need to be a property that they wish to acquire. It can also be a property they already own and want to use as collateral. Specific to small business financing, hard money loans are available to both consumer and business owners.

What Is Needed to Qualify for Hard Money Business Purpose Use Loans

Who is eligible for hard money business loans? New businesses and businesses with low credit scores. These are businesses that find it incredibly hard to secure a loan from a traditional bank. Therefore, the only viable option they are left with to get the funding they need is hard money loans. These loans are backed by the commercial real estate of the business.

A hard money lender will provide you the business purpose use loan if you can prove you have enough equity in real estate. Hard money lender can look beyond your financial or credit shortfalls which is what makes them different from a bank. Regardless of your creditworthiness or time in business, you can get easy access to capital with the hard money loans backed by collateral.

A hard money business purpose use loan will cover you whether you want to buy a new property or want to renovate an existing building. The collateral that you can offer to the lender will determine how much loan amount you qualify for.

In most cases, the entire value of the collateral isn’t calculated for this purpose. Instead, a loan-to-value ration is used to calculate the loan. What does this value represent? It represents a percentage of the property’s value.

Generally, the loan-to-value ratio is quite high. This is because most of the collateral’s value is used to back the loan. Also, hard money lenders are primarily concerned with the value of the property. In most cases, the loan amount is about 70% of the value of the property.

What Situations are Best for Hard Money Loans?

Following are the ideal situations for hard money loans:

  • Construction loans
  • Fix and flip investments
  • When a real estate investor has to act quickly
  • Land loans
  • Why a buyer has credit issues

What Makes Hard Money Business Purpose Use Loans Useful

What is the main reason for anyone, which includes businesses, to get hard money loans? It is to get funding for the purchase of the real estate, capital equipment, or other capital assets. In the real estate industry, hard money loans are growing in popularity.

What is the reason for this? New businesses or businesses with low credit scores are highly likely to get approved for the loan. However, they must own some sort of real estate. It could be residential, commercial, or land property.

Provided by non-traditional lenders, hard money loans are typically offered by private individuals and private funding groups. Unlike traditional lenders such as banks, lenders of hard money loans have lenient policies and flexible rates and criteria. This makes the approval process quicker and easier.

If you’re prospective borrower, then there are many reasons why you’d want to get a hard money business purpose use loan. The first and foremost benefit is the ease of qualifying for the loan. Unlike traditional lenders, hard money lenders do not give too much importance to a credit score when qualifying applicants. Another benefit is the easy application process. The only thing that lenders want to check is the collateral.

The lenders will not ask you to provide any information and documentation that are typically required for conventional loans. However, the best thing about applying for this loan is that you get fast access to financing. While hard money lenders are more lenient than conventional lenders in qualifying people, they do look for certain qualities in borrowers.

While most of them will not mind funding a newer business, they will prefer a business that has been around for at least a few years for the loan. What is the reason for this? Because businesses that have been operating for a while are more reliable than newer businesses. Additionally, they have a stable cash flow that will allow them to meet the loan’s terms.

A business risks losing its collateral if it is unable to repay the loan according to the terms of the loan. Therefore, you must determine if a hard money loan makes senses for your business before committing to it. By doing this, you will avoid a lot of unnecessary financial problems going forward.

Before you apply for the loan, consider how long you have been in business. Apply for and get the hard money loan if you believe you have enough experience to deal with any challenges that may come up during the repayment of the loan. If you lack the needed experience, then develop a back-up plan that involves financially feasible ways of repaying the loan according to the agreed terms. All this benefit you in the long run.

A hard money business purpose use loan is a great option if you want financing but have a low credit score. However, before committing to a hard money loan, make sure to consider the things mentioned above. By doing this, you will ensure that you are able to repay the loan on time and within the agreed terms!