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In this article:\nMerchant accounts and traditional payments processors\nPayment service providers\nEcommerce solutions\nIn today’s digital world, customers expect to be able to make their purchases with a credit or debit card, even when paying super-small, one-person businesses. Fewer people carry cash or checks than ever before, so having some kind of credit card payment capability will be a valuable asset for your business. \nWe’ll walk through the most common ways to accept credit card payments and help you determine which way will work best for your business. \nHow to accept credit card payments in your business\nThere are three main ways to accept credit card payments:\nUse a merchant account/traditional payments processor\nUse a payment service provider\nUse an ecommerce solution\nIn some instances, you may even use a combination of some or all of these methods. \nMerchant accounts / payments processors\nA merchant account is essentially a bank account that assists businesses in accepting credit card purchases. You can use a merchant account through your bank or another financial institution that offers this service. \nMerchant accounts are not business bank accounts though. Their purpose is to accept the funds from your credit card transactions, and the money will then need to be moved into your business bank account once the transactions are complete. \nCheck out this article: \nSmall business guide: What is credit card processing?\nMerchant account providers will generally set you up with the tools and equipment you need to process credit card payments too, like a terminal, tablet, or phone add-on. These are commonly called POS (Point Of Sale) systems. Your bank may act as the “payments processor” or they may have an agreement with one of the many payments processor companies.\nIf you use a smaller bank that doesn’t provide payments processing or merchant accounts including credit card processing, ask around the local small businesses in your area and ask them who they process with, and see if they like their solution, POS system, and rates.\nOne thing to keep in mind is that most merchant accounts require you to sign a contract for a set amount of time. So before getting too deep into this process, make sure you are ready to commit to the provider you have selected. A good merchant services provider can explain all the rates and fees to you, and may be able to get you better rates overall than some of the third-party service providers, particularly if you do a lot of business.\nPayment service providers\nPayment service providers are third-party services, like Square/Block, Stripe, etc. that provide simpler online methods for processing credit cards. While you can still use a merchant account with this method, you don’t need to have one in order to use a payment service provider. \nThis is one reason why these payment service providers has been so disruptive to the traditional payments processor market space. They streamlined and simplified the process of accepting credit cards for small businesses, and their fee structure is very easily understood. This is all good for small businesses, particularly those who don’t know the ins and outs of the “payments” space.\nHowever, depending on your merchant account, you might actually get a better deal from one of the more traditional processors, so be sure to ask around, speak to your merchant services agent or salesperson, and ask whether they can give you better rates.\nMany payment service providers can provide you with a terminal for your store or office, mobile devices and add-ons, and online integrations for processing credit card payments. \nSome payment processors even have their own POS systems that you can use to track inventory, customer order history, and more. If you need or want a multifunctional POS system, be sure to ask your representative and compare features and prices between providers and processors. \nNote for independent contractors, micro-businesses, and one-person shops: Depending on the size of your business, you may also benefit from payments service providers like PayPal, Zelle, or Venmo. These allow bank-to-bank and person-to-person transfers for a fee (or sometimes no fees, depending on the funding source). If you are a one-person operation just starting out, you may be able to utilize this type of payment. PayPal users can pay you with a credit card (and you will have to pay the fee, about 3%, which is close to what accepting payments via a typical business processing setup would cost you). Learn more in our article: \nWhat are alternative payment methods and why should your business consider them?\n\nEcommerce solutions\nIf you only want to sell online and don’t have a need for accepting payments in-person, then an ecommerce solution like Etsy or Shopify could be a great option for your business. \nThese ecommerce platforms have credit card processing built-in to them for all of their users to take advantage of. \nAgain, this can also be combined with one or both of the other two methods. It doesn’t have to be an online-only solution. You could have a physical store with a merchant account or payment processor and then use one of these ecommerce solutions for your online store. \nYou might be interested in: \nHow to get your business started selling online\nThere may (well, there WILL) be fees associated with each of these methods for accepting credit card payments. Within each method, there are several solutions available to choose from. Determine the method that seems the most fitting for your business and then research the different platforms available to find the most competitive offers and prices. It’s can be a good idea to talk to a local merchant services provider and develop a relationship there. They will may be able to provide you the best prices and service, and it doesn't hurt to check.\nHow to choose which way to accept credit card payments\nOnly you can decide which form of credit card processing will be the most beneficial to your business, but we’ll provide some instances when each of these methods can be useful. \nTraditional merchant accounts are the most beneficial for brick and mortar businesses or businesses where you are physically selling something in-person. If you have offerings online, ask your merchant services provider if they offer an online store/shopping cart or ecommerce solution in addition to your merchant account, as many do.\nPayment service providers are generally great for self-employed individuals and businesses that offer in-person and online solutions. Whether you are selling a product or a service, you can use this solution to allow your customers to pay online. The added benefit of including flexible and often lower-cost POS systems with your provider can be especially handy for retailers whether you have an online store or not. \nEcommerce solutions are great when you are selling a product online, particularly if you start small and sell only online. This allows you a way to start marketing your products without having to invest in a storefront. \nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cash out your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

3 most common ways to accept credit card payments for your small business

In this 5-minute read:\nWhat’s the lowest-cost option for processing credit cards\nFlate-rate processing vs. interchange plus\nSubscription flat-rate processing pros and cons\nExamples of credit card processing fees for different business models\nOne reason that many small business owners are reluctant to get set up to accept credit cards is that the fees for the service eat into their profits. Depending on your business model, your processing agreement, and the number and amount of your transactions, these fees can be significant. \nHowever, today’s customers expect every business—even super-small, local businesses and roadside carts—to accept credit cards, so not having a credit card payment option can prevent your small business from growing and staying profitable.\nLet’s go over what credit card processing really costs so you can determine a good fit for your business. \nThe “interchange plus” credit card processing pricing model is usually the lowest cost overall\nA lot of small businesses use one of the newer payments services providers or “aggregators” (like Square, Stripe, Clover, etc.) because they seem simpler and people can easily understand “flat rate” processing.\nWhat is flat-rate processing?\nIn typical flat-rate processing agreements, you pay a simple percentage for each card transaction (typically between 2.4% and 3.5% of the total purchase price) plus a fee per transaction (usually between $.10 and $.30). That’s it. This may seem like a good deal, especially when most of these payments providers will give you a simple card reader for free and get you set up to accept payments relatively quickly.\nHowever, you may get the lowest rates and pay the least overall if you opt for a traditional processor who offers competitive “interchange plus” pricing.\nWhat is interchange plus processing? \nEvery credit card network (Visa, Mastercard, American Express) charges an interchange fee that your processor pays to facilitate each transaction. Providers that use “interchange plus” pricing model charge the interchange rate plus a markup. So for interchange plus pricing, you pay the current interchange rate, plus your processor’s markup, plus a transaction fee (similar to the transaction fee added to flat-rate purchases discussed above), plus sometimes an additional monthly fee.\nThis may sound complicated, as interchange rates are subject to change so you might not always be paying the exact same fees for processing card transactions. But the fact is the interchange rate doesn’t vary much, and most businesses find that a reliable processor charging interchange plus will save them around 20% on processing costs (or more) compared to the flat-rate aggregators.\nWhat is subscription or “zero markup” flat-rate processing?\nSubscription flat-rate processing is gaining in popularity for a couple of reasons: it’s simple to understand, and it sounds like it would be cheaper than either the interchange plus model or the typical flat rate model. Some providers pump up the “zero markup” angle to imply that you will be paying less per transaction than with other pricing models.\nIn a subscription flat-rate processing agreement, you pay a fixed monthly cost to maintain your processing capability, plus a set fee per transaction. Since the monthly costs and transaction fees for various providers vary widely, it’s not practical to estimate what you might expect to pay for this type of processing from an average provider. Depending on how large your transactions are and how often you transact, a subscription flat-rate processor might be competitively priced with a traditional interchange plus processor, or it might be quite a bit more expensive.\nLet’s look at a couple of examples, as elucidated in \nthis article\n by Ben Dwyer at CardFellow:\nLet’s say that you sell furniture. You’re likely processing higher average ticket transactions, but fewer transactions per day than some other types of businesses. You’ve decided to take credit cards, and you have an offer from Processor A using interchange plus pricing with a markup of 0.10% and 10 cents per transaction and from Processor B using subscription flat rate pricing with a markup of 0% and 25 cents per transaction. Processor A has a $10 monthly fee, and Processor B has a $29 monthly fee.\nYou sell a couch for $2,000.\nWith Processor A, you’d pay $2.10 to the processor for their markup. (2000 x 0.001 + 0.10) With Processor B, you’d pay 25 cents. On the surface, it looks like a no-brainer in favor of the subscription pricing. However, to get the most accurate number, you’d also include your monthly fee divided by your number of transactions for that month. If you only sell that one couch all month, you’d be paying $12.10 to Processor A as a markup or $29.25 as a markup to Processor B.\nIf you sold 10 of those couches in a month, you’d pay Processor A $21 (20,000 x 0.001 + 10 x 0.10) and Processor B $2.50 (10 x 0.25). Again it looks like a big savings with the subscription pricing, but the monthly fee changes that. The monthly fee would add another $1.00 per sale with Processor A for a total of $31 or $2.90 per sale with Processor B for a total of $31.50. Those costs are pretty close, but it’s important to remember that the disparity could be even greater if you have a higher monthly fee for your subscription pricing. Memberships from some processors start as high as $69 for a basic plan.\nBut what if you sell smaller-ticket items but process more transactions daily? Let’s look at another example from Ben’s article:\nNow let’s say that you own a shoe store. Your average sale is $50 and you have 10 sales per day for a total of 300 transactions per month. With Processor A, that’ll cost you 15 cents per transaction (50 x 0.001 + 0.10). Adding in our monthly fee of $10 adds 3 cents per transaction for Processor A, bringing the total to 18 cents per transaction. With Processor B, it’ll cost you 25 cents per transaction, plus the monthly fee of $29 split over 300 transactions, equaling 35 cents per transaction. (29 / 300 + 0.25). For the month, you’d pay a total markup of $55 with the interchange plus pricing (300 x .15 + 10) or $104 with the membership pricing. (300 x .25 + 29). Guess what? That 0% processing just cost close to double as much as the competitive interchange plus processing. It’s easy to disregard the monthly cost because it doesn’t seem like it’s part of your processing costs, but these examples illustrate that it’s important to take it into account. When searching for the lowest cost processing, 0% markup doesn’t automatically equal lowest cost.\nAdditionally, Ben points out that, while the subscription flat-rate model may be a cost-effective option for new and growing businesses, you need to understand that many subscription pricing processors set a limit on the number of transactions you can process at each membership level. If your business processes more transactions, you might need to change to a more expensive monthly membership, which of course means you’re averaging more in overall costs per transaction.\nThe bottom line is that you need to discuss your needs and options with your merchant level sales agent or processor, and determine whether you value simplicity, or the absolute lowest processing cost, or personalized customer service, or useful value-added options that come with many processor agreements.\nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cash out your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

Is flat-rate credit card processing the cheapest?

In this article:\nWhen to start thinking about a business ownership transition/exit strategy\nWhat’s the best type of exit strategy?\nHow can business structure affect your exit strategy\nHow to make a change in business ownership\nTransferring your business to a new owner, or even closing it outright, can be a lengthy process. This can take even longer if you are passing the business on to an employee or family member who needs to be groomed and trained to run the business before you leave. \nThere’s a lot to think about and it’s good to be prepared \nwell\n \nbefore\n you intend to step down. \nWhen should you start thinking about your business succession or exit strategy?\nFrom the day you start a new business or become the majority shareholder of your company, you should have an idea of how you intend to implement your exit strategy. It doesn’t have to be all planned out from day one, but you should have some idea in mind of what you intend to do when you leave or sell your business. \nWill you sell the business outright? Pass it on to a family member or employee? How will you leave the business for the next owner? Will there \nbe\n a next owner?\nYou don’t need all of the specific details laid out from the beginning, and it’s okay if your plans change as you go along. But it’s important to prepare for your future and to have an idea of when you want to retire or leave the business so you can start planning this important transition. \nYou should start getting things in motion for your plan of exit well before you leave the business— we’re talking at least several years ahead of time. Most exit strategies take a long time from start to finish, especially if you need to train the next owner. \nWhat is the best exit strategy for your business?\nAn exit strategy can, and should, be different for every business. This will depend on the type of business you run and its financial structure (we’ll talk about how your business structure can affect this process below). \nHere are some of the most common business exit strategies:\nAcquisition\nAcquisition, commonly referred to as “merger and acquisition,” is when another business acquires your company. They generally absorb it into their own and continue to offer your products or services as a new addition to their business. \nThis can help the new owner broaden their offerings, stand out against their competitors, or even eliminate you as a competitor. \nIf you know this avenue is something you want to move toward from the beginning, then you can craft your business to be more appealing to potentially interested parties. Just be careful not to cater your business to the needs of one specific company, because they might not be interested in acquisition (or could change their mind) and you’ll have a lot more to lose than gain. \nInitial public offering (IPO)\nIPO is the process of offering the shares of your private corporation to the public. This allows you to raise capital from public investors who believe your company will be worth something to the public. \nThis isn’t always the best strategy for truly small businesses, but for those that grow into franchises or large corporations that the general public will have interest in. And in order to use this process as an exit strategy, you’ll need to sell your individual shares. This is more common among partnerships and large corporations with multiple owners/shareholders.\nKeep in mind that this strategy can heavily impact how you run your business and should be something that you’ve thought about from the beginning. You may need to tailor large business decisions to what the analysts believe will do well if you want the opportunity to take this route. \nManagement buyout\nOffering the business for sale to your employees is a great exit strategy if you want to see your business continue for a long time. Your employees are more familiar with the business and company culture and generally already have the relationships with your customers that they need to be successful in the future. \nThere are a couple of ways you can do this. You can allow an employee (or employees) to buy your company outright, or allow them to finance the company by paying you monthly or annual increments over time. If you go for the latter, be prepared to be involved with the business for a longer period of time during the transition. You’ll obviously want to ensure its success with the new owner so that you get your payment. \nFamily succession\nYou may be interested in selling or legally transitioning the business to the next generation of your family or a younger sibling. Keeping it in the family can preserve the legacy of your business and the family name, but it isn’t without its challenges. \nWhen considering this option, it’s best to look at the people who have been brought up with an intimate understanding of the business and how it operates. You want to sell or leave your business to a family member (or members) who are determined to succeed, particularly if you plan to benefit from any shares of the business during your retirement. \nLiquidation\nIf you don’t have anyone interested in purchasing your business outright, then liquidation may be the best route. This is when you gather all your valuable business assets (like land, equipment, your building) and sell them. \nLiquidation often occurs when businesses are facing bankruptcy or other financial hardships and need the money quickly. If you aren’t facing financial challenges, it may be worth holding out for a potential buyer. \nHow business structure can affect the sale of your business \nThe structure of your company can affect how you are able to pass on the business. So this is important to keep in mind as you build your business and plan your exit strategy. \nLet’s talk about the basics of how your business structure can impact the transfer of ownership for your business:\nSole proprietorship\nIf you are a sole proprietor or the sole owner of an LLC, then you can’t technically sell the business, but only its assets. This can include the branding, customer lists, equipment, etc. \nThis is because the ownership, in this case, cannot be transferred. The current business will be dissolved and the new owner will have to register it as a new business. \nPartnerships\nIn a partnership, at least two owners share interest in the company. In order for one partner to leave, they will need to sell their interest in the company. This can be split among the remaining partners, or a new partner can be brought in if this is agreed upon by all the partners. \nThere may be more documentation required in this process, especially because most states have regulations on partnerships and you’ll have to register any change of ownership according to your state guidelines. \nLimited liability company (LLC)\nLLCs with multiple owners work similarly to partnerships when one of the owners is retiring or wants to sell their percentage of the company. The member buyout is generally laid out in the company’s operating agreement from the beginning. The remaining owners may buy out the leaving owner, in which case a new agreement would be written up and registered with the state. \nSole owners of an LLC, as we mentioned above, will need to value up assets and sell them, rather than transferring ownership. \nC corporation\nC corporations generally have multiple shareholders that own stock in the business. Ownership is based on the number of shares that each owner holds. Because a C corporation is set up this way, the owner may have the opportunity to offer their stocks to the public through an IPO or to sell their shares to the remaining owners. \nS corporation\nS corporations are similar to C corporation except for the fact that they are taxed differently and can only have up to 100 shareholders (where C corps can have an unlimited number). S corps often have bylaws that restrict who the shares can be sold to. Because of this, shares are often sold within the company rather than be opened up to the public or to another company. \nBasics in the process of making a change of business ownership\nThere’s a lot to consider when it comes to making a change of ownership for your business. You have to gather up your assets, documentation, create a sales agreement, and set a date for all of this to be done by. \nIt can quickly become an overwhelming process. We recommend seeking the assistance of an experienced business attorney to guide you along your plan of succession. \nThere are a few main steps that you’ll need to take throughout the process. Be sure not to skip any of these. (This is where an attorney can be particularly helpful.)\nNondisclosure agreement\nBefore discussing any important details of your business, how much specific assets are worth, customer details, etc., you’ll want to have a nondisclosure agreement in place that ensures your information is protected from being used by a potential buyer outside of purchasing your business. \nIndication of interest\nOnce the buyer and you have done due diligence and valued the company (or its assets), the buyer then submits an “Indication of Interest” that gives a range of value for the purchase. If you like what you see, then you can provide the buyer with more detailed information of specific contracts, customer lists, and financial agreements that you have. \nLetter of intent\nWhen the buyer has this additional information and a fuller picture of your business, they may then provide a “Letter of Intent” in which they offer a specific value for the business. This often discusses the details of the purchase, similar to a sales agreement, however, this letter is non-binding. \nPurchase agreement\nAfter the negotiation process has ensued and everyone and their attorneys have done their due diligence and are satisfied with the terms of the sale, then a purchase agreement is written up and agreed upon by all parties to guide how the purchase will play out.\nThe negotiations and steps it takes to value up your assets can take several months before a purchase agreement ever comes into the picture. And if you aren’t the sole owner and have partners to work with, the process can take even longer because of additional documentation that is involved. \nThese steps are general guidelines and it may be different if your intent is to leave your business to your children or liquidate it outright. Be sure to consult a business advisor and/or a reputable attorney to help guide you through the process.\nA key point is, whatever your plans for succession, you need to be thinking about them YEARS before it’s time to sell, liquidate, or pass on your business. Don’t wait.\nFrom the start of your business to the time when you transfer it to a new owner, it’s important to help your business have every opportunity for success so that you can make the most out of it when you leave. \nSources:\n
\nhttps://articles.bplans.com/types-of-exit-strategies/\n
\nhttps://www.valuepenguin.com/small-business/how-to-transfer-business-ownership\n
\nhttps://www.eidebailly.com/insights/exit-strategy-transition-business-new-owner\n


Small business essentials: How to plan your exit strategy or succession

In this article:\nWhy a website is still vital for small businesses\nHow a website improves credibility with customers\nHow a business website improves local SEO\nExploit your website to improve sales\nLow-cost options for website layout and hosting\nDon’t think your small business needs a website in this social-media-saturated era of FaceGram and InstaTweet? Prepare to be schooled, peeps. Though a crusty GeoCities website may be totally ‘90s, a properly built and regularly updated website still provides tons of value for any business, including small, local, one-person concerns. Here’s why.\nA website builds credibility for your small business\nThe fact is, even though many consumers now engage businesses primarily via social media and review platforms, people still expect every business to have a website. \nThe more, \nahem\n, seasoned among us may remember excitedly asking people, “You have a \nwebsite\n??” when it was a novelty. Now, an incredulous potential customer might ask a small business owner, “You don’t have a \nwebsite\n??”\nA website provides validation to customers that you take your business seriously, and that your business is legitimate. After all, \nanyone\n can set up a Facebook or Instagram or Twitter page for free. Websites, while not expensive, cost time and money to build, run, and host.\nIf you don’t have a business website, or if—heaven forbid—someone else has parked a generic (yourbusinessname).com domain in your place—you may come off as an amateur or not in it for the long haul.\nFurthermore, you’re not just trying to build credibility with potential customers. Which brings us to the next point.\nA properly built website improves local SEO and search rankings\nNot only does a website show potential customers that you’re an established, credible business, but it makes you more visible and legitimate to Google and other search engines as well.\nIt may seem self-evident when talking about websites that it is vital for your small business to show up, and show up well, in local searches. After all, 9 out of 10 people conduct online searches for local businesses, and your website can be an important factor in how you rank.\nThe more touchpoints your business has online—via social media accounts, \nclaiming your pages\n on review sites like Yelp, Google My Business, and TripAdvisor, \nfree business listings\n, and your website—the more important and relevant you appear to search engines, and the higher you will be ranked when people search online for businesses like yours in your area.\nSEO, or search engine optimization, is somewhat of a dark art and very few people truly understand how it works (Google changes its algorithm pretty much monthly and will not tell anyone exactly what they prioritize when ranking search results), but it’s safe to say that maintaining a properly built website with relevant tags, keywords, and correct business info will help improve your local SEO.\nTry this: type your favorite local business into Google or another search engine, and look at the results. It’s likely that the first, or among the first results listed will be their website (if they have one). Don’t forego the potential customer engagement and SEO benefits of having a business website.\nA website is a great small business sales and marketing tool\nObviously, if you have the capability, ecommerce (online sales) is a huge benefit of a small business website. Most of today’s small-business-friendly web-hosting service providers (such as Wix and Squarespace) also offer shopping cart/ecommerce options for businesses who want to sell online.\nHowever, even if you don’t want to sell your goods and services online, or aren’t ready yet, your website can still be a valuable sales tool, and not only because it can drive more customers to your store via improved SEO.\nYou can use your website to feature weekly sales, coupons, offers, and web-only specials to drive traffic to your store. You should blast these out on your social media channels as well, but don’t forget to link them back to your website. (You should also include your website in your business profiles on Google, Yelp, TripAdvisor, Facebook, and every other relevant review platform and business listing.)\nAdd icing to this marketing cake by adding a simple email capture form-fill to your website to collect contact information from your most enthusiastic customers. Even better, you can use a popular promotion as incentive for people to provide their contact info. After all, actually having correct customer contact information is 90% of the battle when talking about effective customer loyalty programs.\nGo deeper: \nThe 6 elements of an effective loyalty program\nControl your messaging and aesthetics \nYet another advantage of a website is it’s 100% controlled by you. In other words, unlike review sites or social media accounts, random people can’t just post whatever they want on your website. \nYou\n control the message, the look, the images, the font… everything. You can really craft the feeling and messaging you want to convey on your website.\nEven basic websites have real business value\nIt’s cheaper and easier than ever to create a website, thanks to the aforementioned website building and hosting companies like Squarespace and Wix. For around 20 bucks a month you can have a clean, professional-looking website that shows your business in its best light. For a little more money you can add \nemail campaigns\n, offers, apps, shopping carts, and other useful features.\n(Pro tip: if you haven’t submitted your brand/s for trademark registration, be sure to buy all the related website domains on somewhere like GoDaddy or Register.com before you submit your paperwork. There are people who watch the lists of approved trademarks and will automatically buy those domains if you haven’t already… and it may end up costing you a pretty penny to buy them back.)\nEven if all you have the resources and time for is a clean, simple web page listing your correct business hours, location, email, phone, and a quick description of your company vision, products, and services, that will still be valuable to many customers, can drive potential buyers to your location, and, as discussed earlier, it gives search engines one more reason to rank you higher in results.\nBottom line? Yes, you need a website for your small business. \nAs part of any \nsmall business marketing plan\n, a website is invaluable and provides benefits on multiple levels. 

Why every small business still needs to have a website (including yours!)

In this article:\nHave a solid idea\nQuestions to ask\nLaws and regulations\nCreate a business plan and get organized\nInsure your business\nCreate a workspace\nHire employees (if necessary)\nDetermine tax obligations\nHave you been thinking about starting a home-based business? Maybe you’re tired of “working for the man” or you just want the flexibility to create your own schedule and manage your own tasks. Either way, you’ll want to be sure you know what it takes to start a business from home before going all-in. \nFollow along as we guide you through everything you need to know to start your home-based business. From laws and taxes to some of the more fun things like hiring employees and creating your home office, we’ll help point you in the right direction. \nBefore you start a home-based business, you need a solid idea \nOf course, you can’t start any business without a killer idea. You need a business idea that people are actually willing to spend money on. Maybe you already have that idea, or maybe you’re at ground zero and still thinking about what you can do. \nConsider these questions to help you come up with your business idea:\nWhat do you enjoy doing? \nWhat talents do you have? \nWhat skills can you offer that others are willing to pay for?\nWhat is something you could easily offer while working from home?\nWhether you can offer a service or you have a great product that will help your customers, make sure to round out your idea in a way that you can sell it and actually make a profit. \nQuestions to ask before starting a home-based business\nOnce you have your awesome business idea, there are a few key questions you’ll need to think long and hard about. \nWill a home-based business work with your lifestyle and residence?\nThe idea of having a business from home is appealing, but you need to make sure it realistically works with your current home life. Are there too many distractions in your home to get the work done that you need? Is there a separate space where you can work and keep a good work-life balance?\nGo deeper: \nAdvantages and disadvantages to starting a home-based business\nyoung woman with dog working from home\n\nWhat are the startup costs going to be for this business? \nHome-based businesses can have relatively low startup costs depending on the type of business you want to run, but it sure isn’t going to be free. Make sure that you are equipped to handle these costs at this time. \nLearn more: Check out our helpful guide to \nfunding options for starting a small business\n.\nWhat is a realistic income that you can make with this business?\nStarting your own business is awesome, but if it’s not going to quickly provide at least the income to support itself (and ideally more) then it may not be the best investment for you. \nMake sure you have enough to live on until your startup budget runs dry.\nWhat is the current market like for your business idea?\nMarket research is going to be crucial for ensuring the success of any business, but especially one that is run out of your home. \nThere are potentially unique issues related to retail sales, shipping, warehousing, and taxes for home-based businesses. See below to learn more.\nGo deeper: Find all of the market-related questions you should ask in our article \nmarket research for small businesses\n article.\nLearn the laws and regulations regarding home-based businesses\nEven though you’re starting a business from the privacy of your own home, you still have to abide by federal, state, and local laws and regulations. It will be important for the success of your business to ensure that you know what those laws are. \nCheck local zoning laws\nThere may be local laws the prevent you from being able to run a business out of your home. Check with your city, county, state, and even HOA (if applicable) to make sure your business fits within any local requirements. If you’re starting \na small business in a small town\n, you should also ask around to see if your community has additional requirements or restrictions.\nIf it doesn’t, that doesn’t mean you should give up. You may just need to \nfind a commercial space\n to start your business from. \nPick your business structure\nYou need to identify your business structure. This will help determine what your tax obligations are and it will have implications for your startup and other liabilities. \nThe basic business structures that may apply to your home-based business include:\nSole proprietorship\nLLC\nS corporation\nLearn more: \nHow and when to incorporate your small business\nGet your tax IDs\nIf you choose to incorporate your business as an LLC or S Corp, you’ll need to acquire an employer identification number (EIN). Your EIN is issued for tax reporting purposes. You may also need a state tax ID number depending on where you are located. \nAs a sole proprietor you can choose to use your social security number or get an EIN. \nTo get your EIN, you can go to \nirs.gov\n and apply for one by filling out form SS-4.\nGet licensed\nCertain types of businesses are required to have licensing and permits. Check federal, state, and local laws to determine if your business will need any licensing. \nYou can visit the \nU.S. Small Business Administration\n (SBA) to apply for the permits and licenses you might need. \nCreate a good business plan\nInvestors, banks, and potential partners won’t take you seriously unless you have a solid business plan. \nIf your idea and business are completely new, it may be somewhat difficult to come up with the projected revenue numbers you’ll need to complete your business plan, but you should do the best you can.\nYou should definitely flesh out your “executive summary” or elevator pitch, company vision, mission statement, market analysis, marketing strategy, and financial projections, and know them by heart.\nGet organized\nWorking from home isn’t going to work if you aren’t organized. You’ll want to develop a clear plan of action for your business and hold yourself to it, as well as engage in tasks such as marketing your business, hiring the right people, and keeping good records. \nGet your business insured\nYour homeowner’s or renter’s insurance isn’t going to cover your business, so you’ll want to take action to get your business insured as you are starting up. There are several business insurance options that you can choose from, depending on your needs:\nLiability insurance\nIf any customers, business partners, or other business-related visitors come to your home for meetings, then you’ll want to have liability insurance. This will protect you and your business from being liable if any injuries or damages occur to your guests while in your home. \nProfessional liability\nProfessional liability is important for protecting you against any claims clients may make of negligence or failure to deliver. \nBusiness property insurance\nHomeowner’s or renter’s insurance doesn’t generally provide coverage for equipment that you use for your business if some kind of disaster occurs. Examples of equipment you may use from home include printer, computer, furniture, products, items related to your service, etc. \nBusiness automobile coverage\nYour regular auto insurance may not cover accidents that occur during business-related deliveries or trips. If your vehicle is used for business purposes, then it is a good idea to look into what your own insurance covers and if you need to pick up additional business auto insurance as well. \nOther possibilities\nDepending on your business, there may be some other insurance options you need to look into. For example, worker’s compensation insurance will cover anything that happens to employees while on the job and commercial crime insurance can protect you from theft and fraud. \nWe recommend meeting with a business insurance professional to help you determine which insurance will be most beneficial for your home-based business. \nFind and set up a workspace\nFinding and setting up your workspace is going to vary a lot depending on the type of business you run. For example, if you’re running a daycare or catering business out of your home you’ll have a lot more requirements for your space than if you were offering web design services. \nThe first step is to find space that you can use and dedicate to your business. Maybe you have a room that will be perfect for your office and client meetings. Or maybe you’re just working from your dining room table. For some businesses that can work just fine. \nFor specific types of businesses (like our daycare and catering examples) you should check with local and federal regulations to ensure that you have the proper space and it meets legal requirements before starting your business. \nclean and neat home workspace for small business\n\nOnce you’ve found your space, it’s time to set it up. We have a few tips that will help you no matter what type of business you are running. \nMake a list of the things you need for your home office\nIt doesn’t matter what type of business you have, you’ll need some kind of office setup and materials for it. This can include any of the following items:\nComputer\nPrinter\nPens, pencils, other writing utensils\nPaper, notebooks, sticky notes\nClock\nCalendar\nFile cabinets\nDesk\nFurniture for any client meetings\nAlso, consider additional needs related to your specific industry. \nGet a phone and email account dedicated to your business\nThe goal of any business is to get leads and customers, and this often comes from phone calls, texts, and emails. \nGet a separate phone that is solely for your business to help you stay organized and keep your home and work life separate. \nCreate a website for your home-based business\nEven small, local, home-based businesses can benefit from a well-built and well-run website.\nRead our article on \nwhy every small business needs to have a website\n.\nBrighten things up with proper lighting\nYou’ll want good lighting in your home office just to work with. But lighting can also help set the tone for your business if you have customers meeting you in your home. Bright, natural light is comforting and more professional. \nIf your home doesn’t allow for great lighting naturally with large windows and overhead lights, you may need to create that ambiance with desk and floor lamps. \nProper lighting also helps alleviate any safety concerns for visitors.\nDetermine if you need additional help\nTons of businesses start out as solo concerns, but as you grow, or if your business plan is aggressive, you might find that you need some additional hands on deck to keep up with the incoming work.\nDetermine the amount of work you are anticipating and whether you’ll need to hire any employees to help you out. You might start small and work alone and then as you grow and get more clients decide to hire another person or two.  \nYou’ll also want to decide if you’re going to have any employees helping you at your home or if they will be working remotely. \nTaxes for your home-based business\nJust like any other type of business or job, you are required to pay taxes on your earnings. Do your research to determine what your tax obligations will be so you can start setting that aside or even paying it out each month. \nDeductions\nYou’ll find that you can deduct a lot of things from your business taxes that you weren’t aware of. We’ve created a list of deductible items broken up into three categories: business, home, maintenance. \nBusiness\nEquipment\nCost of goods \nEmployee pay\nBusiness insurance\nTravel\nOffice supplies\nBusiness use of your car\nMarketing\nTaxes\nInterest\nProfessional services (accounting, consulting, legal, etc.)\nHome\nTo obtain the amount that you can deduct from your home-related expenses for your business, take the percentage of your home that is used for your business. You can divide the square footage of your workspace by the entire square footage of your home. \nUtilities (heating, water, sewage, electric, internet, phone)\nMortgage/rent\nInsurance\nCleaning supplies/services\nHOA fees\nRepairs\nProperty taxes\nMaintenance\nAny repairs, remodels, or maintenance that you make to your home related to your business can be written off on your taxes. \nRecord keeping\nKeep accurate records of all expenses and finances. This is crucial to ensuring a good tax season and preventing IRS audits. \nManaging employee taxes\nIf you have employees on your payroll, it is your responsibility to get the proper documentation from them to process they pay and calculate the taxes that will be withheld. We highly recommend hiring an accountant or finance professional if you do have employees on your payroll.\nTalk to professionals\nIf all of this goes way beyond your ability, you may just want to hire a bookkeeper who can help you out. As a business owner, it’s always a good idea to have a professional at least help you with your taxes during tax season each year. \nImportant note: These tips are general and not intended as legal advice. Every business is different and you should consult with a tax professional to determine the best course of action before submitting taxes for your business. \nClaim your online business profiles\nBefore you sell a single widget, you need to \nclaim your online business listings\n on Google, Yelp, TripAdvisor (if applicable), Facebook, etc. \nWhen customers start reviewing your business online (and they will), these review platforms will automatically create a profile for you if you haven’t done it yourself. You want to be in control. Make sure you claim your profiles and start seeing the benefits of reviews.\nRead our easy how-to articles to get started:\nHow to claim your Yelp business listing\nHow to claim your Google business listing\nHow to create and claim your Facebook business page\nHow to claim your business listing on TripAdvisor\nGo deeper: \n25 free business listings every small business should be on\nStart getting and retaining customers\nOnce your home-based business is started, it’s time to start managing your customer relationships from “consideration” through the sale, and building trust for repeat business.\nYou may have already provided some services for free or at a discounted rate as you were testing out your business. Continue to use these techniques where feasible to help you grow your small business. \nWherever your business operates, it’s vital that you claim your \nonline business listings\n, \nrespond to your reviews\n, and keep abreast of your business revenue trends and customer relationships. 

Everything you need to know to start a home-based small business

In this article:\nWhat is live chat?\nWhat are chatbots?\nHow to decide which to use\nOptions for live chat a chatbot services for business websites\nIt’s not a matter of whether or not you should have chatting capabilities on your business site (you totally should), but a matter of which type of chat serves your business best. Consumers are relying more on online communications with businesses as they do their research for a service or look for customer support. In fact, 70% of customers today prefer messaging to voice for customer support. \nIn this guide, we’ll walk you through live chat and chatbots and tips on how to decide which is best for your business. \nWhat is live chat and why is it important?\nLive chat gives your business the capability to chat with a customer in real-time via an online messaging platform. This can be hosted directly on your website or on another platform that you send customers to with a link. Facebook Messenger is a great example of this. A customer can message a question and an employee can promptly respond, ideally helping the customer within that same conversation. \nLive chat is important for businesses that want to provide real human interactions with real-time support. It adds an additional outlet for customers to reach your business and contributes to higher customer satisfaction. \nWhat are chatbots and why are they important?\nChatbots are preprogrammed chatboxes that are embedded into your website. Generally, a business will provide a list of common questions and answers that customers might ask when they arrive on their site and give these to their chatbot provider.\nMany chatbot solutions are getting really powerful with AI technology that allows them to generate an answer to a user’s question without them even having to select a pre-programmed question. \nChatbots can range from super simple, where they just welcome a user to the site and then ask them to wait for an employee for live support, to extremely complex (on the development side of things), where they allow the user to type in a question and can hold an entire conversation to help answer the users’ questions without any human interaction at all. \nLike live chat, chatbots are important to use for those customers that prefer to do their own research or don’t want to pick up the phone to call. Unlike live chat, chatbots can work for you 24/7/365. They can help your customers answer questions without needing an employee to be logged into your chat system. \nIs live chat or a chatbot better for your business?\nTo determine which solution (or combination of the two) is best for your business, you need to outline your customer service goals and what you want that experience to look like. \nIs it important for customers to be able to “reach” your business outside of business hours? Or do you want to make sure a customer is always talking to a real person?\nLet’s discuss a few different goals that you might have and if live chat or a chatbot will work better for each one. \nResponse time\nFirst, how quickly do you want to be able to respond to your customers’ questions? Is it important to you that they get an immediate response?\nCustomer satisfaction goes way up when you can get back to them quickly. It may take several hours or even a day or two to get back to a customer via email or on Facebook Messenger. Even live chat can take a little bit of time if your queues are full. \nIf you want customers to receive an immediate response when they hop onto your chat, then a chatbot may be the best route here. If you aren’t worried about a little bit of wait time scaring customers away, especially outside of business hours, then live chat should work just fine. \nYou can even have the best of both worlds with a live chat option that has a few pre-programmed responses to help with simple questions that can then redirect customers to an employee as needed. \nCost savings\nIt’s generally safe to assume that business owners like to save money and want their operations to be as cost-effective as possible. Both solutions can help you increase your bottom-line, it just comes back to your goals and current budget. \nLive chat is generally very affordable, so long as you have the personnel to monitor and run the chats. Beyond its affordability, live chat also helps increase customer retention with real-time communication that prevents sales funnel dropouts. \nChatbots are a great cost-saving solution in that they don’t require personnel to get the job done. Around 80% of customer queries on chatbots have been resolved without human supervision. This can save your business a lot of the time and money that it takes to answer simple questions over and over again. You could preprogram your FAQs into your chatbot to help give your customers the answers they didn’t search your website for, too. \nAccuracy\nWhile chatbots are getting better at handling more complex answers with improving AI and Machine Learning capabilities, they don’t get it right 100% of the time. It can be frustrating for a customer to ask a question to a chatbot to get an answer they’ve already seen or something that doesn’t answer their question at all. \nIf your company’s products and services tend to do get a little more complex, you may want to consider live chat, or at the very least program your chatbot to direct customers to your employees when a query falls outside the simple answer.\nThat being said, there is a range of chatbot solutions that you can choose from to help mitigate this problem. You can use chatbots that only have pre-programmed questions if you wish, so a customer has to select from a list that your chatbot provides. That will ensure accurate answers from your chatbot, but then it functions more like your FAQ page and doesn’t allow the customer to search for the specific question that brought them to your site. \nIf you need to answer simple questions quickly, without human supervision, a chatbot is the best solution here. But if things are more complex, then live chat will give your customers a better experience and, hopefully, earn you more sales. \nPersonal touch\nCustomers that feel a human connection to your business and have successful personal engagements generally turn into repeat customers, or at least spend a little more. Live chat helps achieve the desire for personal connection with real-time assistance, increasing customer satisfaction. \nIf your ideal customer prefers human interaction, then live chat may be the best solution for you. Chatbots are better if your customer wants a fast, self-service answer to a simple question so they can purchase quickly and move on with their day. \nSome live chat and chatbot solutions to consider\nOnce you’ve determined which solution works best for your goals, you can put a plan into action. \nHere are a couple of popular solutions we’ve found that you can try:\nFacebook Messenger. Facebook has a \nchat plugin\n that allows your web developers to embed your Facebook chat into your website. You just have to be logged onto Facebook and connected to your business Facebook page to respond to questions as they come in. This eliminates the need to redirect customers to your Facebook page to chat with someone. And, it’s free! This is definitely a live chat solution, but Facebook does allow you to program some simple questions into the chat, too\nLiveChat is considered the industry leader in live chat solutions. It has tons of integrations with different software you may use—Google Analytics, chatbots, email marketing services, CRMs, and more. It does start at $16/month per agent that you have available to chat, so there are some costs to consider here\nChatBot is a great chatbot option for businesses. For $50/month, you get an active chatbot with 1000 chats/month (then $0.01/chat thereafter), all integrations that the software provides, unlimited conversation scenarios, basic reporting, and data security \nThere are also several industry-specific chatbot solutions out there too, so definitely look around to find the best solution for your business. Maybe even check out what your competitors are using and test it out to see if that would fit your needs. 

74 articles found in “Operations”

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Everything you need to know to start a home-based small business

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