What Is A Sole Proprietorship?

Before you launch your business, you have to check a few items off your to-do list. Perhaps you have to purchase inventory, find a commercial building to lease, and explore different types of business software. Maybe you operate a home-based business so your list isn’t as extensive. No matter what type of business you plan to open, though, there’s one thing all business owners must do: select a business structure.

There’s no getting around choosing your business structure. The way your business is set up determines both how you’ll file your taxes and how much you’ll pay. Your business structure may provide you with personal liability protection against the debts and obligations of the business. It will also determine specific requirements for your business, from registering with your state to ongoing requirements (like holding meetings and recording meeting minutes).

If your business has just one owner, one business structure to consider is the sole proprietorship. But before you make that critical decision, it’s important to understand what a sole proprietorship is, registration and paperwork requirements associated with this structure, and the benefits and drawbacks of being a sole proprietor.

While the business structure you choose should ultimately be what’s best for your business, we hope to make the decision process a little easier by breaking down exactly what to expect as a sole proprietor. Keep reading to find out more.

Sole Proprietorship Definition

Merriam-Webster defines a sole proprietorship as “a business owned and controlled by one person who is solely liable for its obligations.”

Let’s break down this definition. A sole proprietorship is a business that belongs to and is run by only one person. If your business has multiple owners, you’ll be unable to operate as a sole proprietorship.

In a sole proprietorship, the owner alone is liable for the obligations of the business. A sole proprietorship is not a separate legal entity. This means that the owner  — you — is responsible for the debts, obligations, and liabilities of the business. Your personal assets may be seized to fulfill debts, and lawsuits can be brought against you personally.

Many people choose this structure because a sole proprietorship is the quickest, easiest, and most inexpensive way to start and operate a new business. A sole proprietor is not required to register with the state. Simply engaging in business activities legally establishes a sole proprietorship. However, the sole proprietor is still required to apply for the appropriate business licenses and permits needed to legally operate in their state.

Sole proprietors can operate under their own legal names or can create a fictitious trade name when doing business. Using a trade name does not establish a separate legal entity, and the business owner will still be held responsible for the liabilities of the business.

Sole proprietors do not have to file separate tax returns for their businesses. Instead, these business owners report business profits, losses, and expenses on a Schedule C form. Self-employment tax for the sole proprietor is reported on a Schedule SE. The Schedule C and Schedule SE are both filed with the business owner’s Form 1040.
We’ll dive deeper into the benefits and drawbacks a little later in this article.

Next, we’ll compare sole proprietorships to other business structures so you can better determine which works best for you.

How Is A Sole Proprietorship Different From A Partnership?

The biggest difference between a sole proprietorship and a partnership is the number of owners of the business. A sole proprietorship has a single owner. A partnership has two or more owners.

Comparing a sole proprietorship with a limited partnership (LP) and limited liability partnership (LLP) reveals a few additional differences. With these types of partnerships, limited partners are protected from personal liability. These partnerships are also more expensive and more complicated to form because they require registering with the state.

Other than the number of owners, a sole proprietorship and a general partnership (GP) are very similar. Neither has to be registered with the state to exist. The profits and losses for a sole proprietorship and general partnership are also filed on personal tax returns.

How Is A Sole Proprietorship Different From A Corporation?

A sole proprietorship is very different from a corporation. A corporation is the most expensive business entity to form, whereas a sole proprietorship is very inexpensive. Corporations must be registered with the state. There are also multiple ongoing requirements corporations must meet, such as holding meetings and having a board of directors. Sole proprietors do not have to register and there are no ongoing requirements.

Corporations may have multiple owners, whereas a sole proprietorship has just one owner. Corporations can also raise capital through the sale of stock — something a sole proprietor can not do.

Corporations also offer the best personal liability protection for its owners. As previously discussed, sole proprietors are held personally responsible for the liabilities of the business.

Another big difference between sole proprietorships and corporations is how each business structure is taxed. Sole proprietors are able to report business profits and losses on their personal tax returns. Corporations are taxed differently — a corporation is the only business structure that must pay separate income taxes. If dividends are paid to shareholders, shareholders must report this on their personal tax returns, resulting in double taxation for the corporation.

How Is A Sole Proprietorship Different From An LLC?

A limited liability company, or LLC, combines benefits of different business entities. An LLC must register with the state, and there are some fees associated with starting an LLC. This is in contrast with sole proprietorships, which are not required to register and are the least expensive to start.

Another difference between the two is that LLCs have liability protections in place to protect the personal assets of the owners. Sole proprietors do not receive these same protections. LLCs may also have multiple owners, whereas a sole proprietorship is limited to a single owner.

There may also be differences in how the LLC is taxed. Owners of an LLC can choose how they are taxed. In some cases, they may opt to be taxed as a sole proprietorship. In other cases, however, owners may choose to be taxed as a partnership or corporation.

What Types Of Businesses Are Sole Proprietorships?

A sole proprietorship is best for businesses with one owner that wants full control of the business without complicated requirements or additional expenses. Self-employed business owners, home-based businesses, independent contractors, and even some franchise owners may choose this business structure.

Any business can be a sole proprietorship provided there is just one owner and the owner is aware of the benefits and risks of this business structure. Smaller businesses are better suited for sole proprietorships. Companies that plan to grow much larger and want to take out business loans or raise large amounts of capital in the future would benefit from another business structure, such as a corporation or LLC. Some common small businesses that are sole proprietorships include:

  • Home Healthcare Businesses
  • Catering Companies
  • Housekeeping Services
  • Virtual Assistants
  • Freelance Writers, Editors, Or Designers
  • Tutors
  • Computer Repair Technicians
  • Landscapers
  • Bookkeepers

Regardless of what type of business you operate, the business structure you select should be based on the long-term needs and goals of your business.

Benefits Of Sole Proprietorships

After breaking down the definition of a sole proprietorship, you should have at least some idea of why business owners would choose this structure. However, let’s take a closer look at the full list of benefits of operating your business as a sole proprietor.

  • Less Expensive: Sole proprietorships are the easiest and least expensive forms of business structures. This is ideal for business owners that aim to keep their startup costs as low as possible.
  • No Registration Required: Sole proprietors simply need to participate in business activities to exist. No state registration is required. However, any applicable permits and licenses will need to obtained to legally operate in your state.
  • No Ongoing Requirements: Sole proprietors are not required to hold meetings, record meeting minutes, or have a board of directors.
  • Full Control Of The Business: As a sole proprietor, you will be the sole owner of your business. There are no additional owners or shareholders to consider. You get to make all business decisions and you receive all of the profits.
  • Easier Tax Returns: Sole proprietors can file their business profits, losses, and expenses on their personal tax returns with just two additional forms.

Drawbacks Of Sole Proprietorships

While being a sole proprietor definitely comes with its benefits, there are also drawbacks to consider when you’re weighing out your decision. Those drawbacks include:

  • No Liability Protection: As a sole proprietor, you will be held responsible for the debts, obligations, and liabilities of your business. If you default on a loan, lenders can come after your personal assets, such as your bank account, vehicle, or real estate. If your business goes bankrupt, your personal finances could be affected. Finally, lawsuits can be filed against you personally, which would also put your assets at risk.
  • Financing Challenges: As a sole proprietor, getting business financing can be a challenge. Most lenders — from traditional lenders like banks to online alternative lenders — only provide financing to registered entities. Sole proprietors also can’t sell stock in the business as a way to raise capital. As a sole proprietor, you may have to get more creative with your financing, such as launching a crowdfunding campaign or taking out a personal loan for business.

Final Thoughts

For many aspiring business owners, operating a sole proprietorship is the right path to entrepreneurship. However, what works for some doesn’t always work for others. After weighing out the pros and cons of a sole proprietorship, consider consulting with an accountant and/or attorney to help determine if a sole proprietorship will meet the needs and goals of your business.

Ready to learn more? Download our free beginner’s guides for business. You can also learn more about the different types of business structures to help you further pinpoint which option is best for you.

The post What Is A Sole Proprietorship? appeared first on Merchant Maverick.

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Zenfolio Website Builder Review: Pros, Cons, and Alternatives

Zenfolio Website Builder Review_ Pros, Cons, and Alternatives(1)

Zenfolio is a photography portfolio website builder that includes ecommerce functionality, so photographers can “showcase and sell your photography”.

Check out Zenfolio’s Current Plans & Pricing

Recently, I gave Zenfolio a try for a small project after receiving a few reader questions. But before I get into the pros and cons of my Zenfolio review, let’s consider a bit of background on building a website in general.

There are so many considerations to take into account when choosing a website builder — and really, there are a thousand ways to get what you want in the end in terms of functionality, convenience, pricing, etc. The thing to remember is: whether you’re building a simple photography portfolio or running a full-fledged photography business, the way you build your photography website has a lot of consequences.

In the long-term, it affects your versatility, functionality, and, of course, your brand. In the short-term, it can certainly add/take away a lot of headaches. That said, just like choosing a physical house or office, there is no such thing as an absolute “best” or “top” choice. There’s only the right choice relative to your goals, experience, and circumstances.

What Is Zenfolio?

On the wide spectrum of website building solutions, Zenfolio lives on the end that is all-inclusive and provides everything you need to get started and grow your photography website. It contrasts with solutions where you buy, install, and manage all the “pieces” of your website separately. I wrote a post on Website Builders, Explained for more background.

Using Zenfolio is sort of like leasing and customizing an apartment in a really classy development instead of buying and owning your own house. You’re still in control of decor, cleaning, and everything living-wise – but you leave the construction, plumbing, security, and infrastructure to the property owner. That point is key because there’s usually a direct tradeoff between convenience and control with all software, but especially with website builders.

Everything may fit together just right with a website builder like Zenfolio, but that may or may not be what you’re looking for.

As far as competition, Zenfolio competes with all-inclusive hosted website builders like Weebly, Wix, Squarespace, Gator, and WordPress.com, and photography website builders like Smugmug, Format, and Carbonmade.

Compared to their competition, they focus on providing an all-in-one solution that includes everything photographers need to grow their business, from modern templates that are easy to customize to ecommerce features that allow you to sell photos directly from your site.

Instead of operating like a traditional drag-and-drop website builder, Zenfolio has you select from a menu of options around what type of photography you do, then gives you a selection of recommend themes that you can switch out later.

This structure which appeals to beginners who have no design or development experience and who want an easy way to get their photos on a good-looking website ASAP.

One other quick aside – a disclosure – I receive referral fees from all the companies mentioned in this post. My opinions & research are based on my experiences as either a paying customer or consultant to a paying customer.

Pros of Using Zenfolio Website Builder

Here’s what I found to be the pros of using Zenfolio — not just in comparison to other website builders, but as an overall website solution for creating a photography website.

Straightforward Setup Process

One of Zenfolio’s best features is how easy it is to get your photography website up and running, even if you have zero website experience. Zenfolio offers a 14-day free trial for those who want to give the platform a test run, or you can select the features you need, and Zenfolio will recommend a plan for you.

Zenfolio plan selection based on features

Once you create an account (either free or paid), Zenfolio prompts you to select what type of photography you shoot most and the features you’re going to be using on your website so they can recommend a template that fits your needs.

Zenfolio Photography Templates

From there, it’s just a matter of selecting the template you like best, then adding your photos. Voila! You have a website.

Zenfolio Website Completed

Functionality + Integrations

Perhaps the biggest benefit of Zenfolio is that it truly is an all-inclusive website builder *for photographers*. They offer a ton of built-in functionality and features that covers everything from selling your photos to seeing website statistics to sharing private galleries with clients to marketing your website through emails, coupons, etc.

Zenfolio Features

One thing to note here, however  — a lot of this advanced functionality comes with Zenfolio’s higher-priced plans (Pro and Advanced).

Pricing

Speaking of pricing, Zenfolio’s pricing is fairly competitive when compared to other website builders, especially when you take into account all of the features you get with their plans. Their mid-tier plan, Pro, has a ton of advanced functionality like payment processing, watermarking, and marketing features, and is just $10/month, while their Advanced plan offers even MORE and is just $15/month.

When you compare that to general website builders like GoDaddy GoCentral, Website Creator, Wix, or Squarespace, you’re getting a lot more bang for your buck with Zenfolio.

But something to keep in mind when thinking about pricing — it’s not just about the price, it’s about how you want to use your site.

If you’re looking for more customization, or a simple portfolio website with no advanced features, you may want to consider another option. It makes no sense to overpay when you don’t need the features that bring Zenfolio a lot of their value.

Cons of Zenfolio

But of course, no review would be complete without looking at the downsides. Every piece of software will have complaints. Here are the cons I found with using Zenfolio.

Limited Feature Set – Design

With any technology product, there is almost always a trade-off between convenience and control.

And you can really see this trade-off with the Zenfolio website builder. The convenience of their design setup is great. It’s straightforward, fast, and not confusing. It puts your focus solely on getting your photos into a premade template.

But here’s the thing — if you want to go anywhere beyond the basics of the template, you’re pretty limited.

You can choose different layouts and themes (which are essentially fonts/color schemes), and edit elements like logo and menu position, but when it comes to editing the actual template, you’re locked in.

Zenfolio Layout Editing

With pages, you can add custom-built pages, but it’s in a separate text editor and is pretty basic in terms of what you can actually do with the page.

Zenfolio Pages

The best way to describe it is a ‘paint-by-numbers’ set up. It’s great to have the basics, but if you want to do anything extra or outside of bounds, then you’re out of luck.

If you wanted to create something more custom to showcase your photography, the design limitations can be pretty crippling.

In an ironic way, you could end up showcasing your truly unique art on a website that looks decidedly like other photographer’s Zenfolio websites.

Onboarding / Ease-of-Use

I mentioned earlier that getting set up with Zenfolio is incredibly simple — and it is. But Zenfolio leaves much to be desired when it comes to learning how to use the platform to its fullest.

One of Zenfolio’s best features is how extensive the website builder is. There is so much you can do with it. The only problem? It’s not really clear how to use all of the great features.

As soon as I signed up, I received an email with three steps to get started, but the instructions were pretty basic.

Zenfolio Onboarding

If I wanted to learn more about how to use Zenfolio, they do offer a one-on-one session with a “Zenmaster”… but for a platform that offers so much convenience in terms of their built-in features and all-inclusive templates, this extra steps feels inconvenient.

If you’re looking for a platform that’s intuitive and easy to get the most out of, the onboarding process for Zenfolio really leaves a good bit to be desired.

Limited Feature Set – Future Growth

This disadvantage has been hinted at throughout this review, but I’d like to call it specifically here. And that is – there is a huge upside to purchasing software *for photographers* but it can also a serious handicap for businesses that grow in different ways (ie, with courses, content, sponsorships, other business models, etc.

Zenfolio’s engineering team focuses exclusively on photographer features – not business features. While they will always be better at gallery uploads, client viewings, and print purchases, they might not grow with *your* photography business.

If you find general use products that have good enough photographer features but focus on general use cases, then I would look closely at that solution (ie, with other builders).

However, if you are decidedly a pure-play photographer, then this con is really a pro since Zenfolio will only make the features that you like, even better.

Zenfolio Review Conclusion

Zenfolio certainly makes getting your photography website up and running easy, despite the learning curve that comes with their advanced features. Their extensive functionality makes the platform a true all-inclusive solution for photographers who want an advanced portfolio website.

Check out Zenfolio’s plans here.

However, there are trade-offs to consider with an all-inclusive website builder — specifically customization and control. And this is where Zenfolio falls shorts compared to other website builders, especially those that aren’t specific to photographers. If you’re looking to create a portfolio website where you have more control over the design of the site, you’re better off elsewhere.

Not sure Zenfolio fits your needs? Check out my quiz to find what the best website builder is for you based on your preferences.

The post Zenfolio Website Builder Review: Pros, Cons, and Alternatives appeared first on ShivarWeb.

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How To Find The Perfect Accountant For Your Small Business

How To Find The Perfect Accountant For Your Small Business

Everyone wants their small business to succeed, which means everyone needs a small business accountant. Yes, even if you use accounting software and do your own bookkeeping, a professional accountant is indispensable.

But how do you even find an accountant? And once you do, how do you know if they’re any good?

In this post, we’ll provide five easy steps for finding an accountant for your business. We’ll teach you where to look and how to tell a good accountant from a bad accountant. We’ll also give you the top tips and tricks for choosing the perfect accountant.

How To Find An Accountant For Your Business
Step #1: Pinpoint Why You Need An Accountant
Step #2: Choose the Right Type of Accountant For Your Business
Step #3: Know Where To Look
Step #4: Learn What To Look For
Step #5: Ask The Right Questions

Know When & Why You Need An Accountant

How To Find The Perfect Accountant For Your Small Business

The first step is knowing when to hire an accountant. Spoiler alert: the answer is now.

Sure tech-savvy business owners can use accounting software to manage their own bookkeeping, but when it comes to actual accounting, you’ll want the many advantages of having an expert onboard. As a small business owner, you should do everything you can to set yourself up for financial success; the best way to do that is to hire an accountant.

Accountants do so much more than just help you file your taxes. An accountant can give sound business advice when you’re setting up your business, analyzing your cash flow, trying to improve efficiency, facing an audit, and much more. Read our full post When Should You Hire An Accountant For Your Business to learn every instance when an accountant can help.

When beginning the process of hiring an accountant, it’s important to pinpoint why you want help and exactly what you want your accountant to do for you. Common tasks accountants can perform include:

  • Basic bookkeeping tasks
  • Verifying your bookkeeper’s work
  • Setting up your business
  • Offering business advice
  • Creating reports
  • Analyzing your business’s finances and assets
  • Cash flow management and projections
  • Providing tax advice
  • Filing tax returns
  • Maximizing your tax deductions

It’s important to know which tasks you want your accountant to perform before starting your search as services vary from accountant to accountant.

For example, if you just want tax advice and help filing your tax returns, you may want an enrolled agent (EA) instead of a full-on accountant. If you want business advice and tax advice, a certified public accountant (CPA) with expertise in your business industry may be a better way to go.

Take a careful look at your finances and your business’s current situation and create a list of problem areas where you would like help from a professional. Do you need help managing your cash flow? Are you worried you aren’t taking all of the deductions you’re eligible for? Are you simply overwhelmed by finances and need a helping hand with the day to day work? Pinpoint these concerns and write them down in a list. Later, when you interview prospective accountants, you can return to your list and determine if their services would be a good solution to address your business’s needs.

Why Picking The Right Accountant For Your Business Matters

How To Find The Perfect Accountant For Your Small Business

As a business owner, you pick tools all the time that help your business — accounting software, a new ecommerce site, a file organizer for your office — you name it. One, if not the, most important tool you can pick is a good accountant. A good accountant will help you successfully manage your finances so that your business can be successful and grow.

But there isn’t a one size fits all accountant. The second step in finding the perfect accountant for your small business is knowing which type of accountant you need. There are three main types of accounting professionals: bookkeepers, accountants, and CPAs.

Type Definition

Bookkeeper

Bookkeepers handle the day-to-day finances and bookkeeping tasks of a business. Tasks can include invoicing, reconciling accounts, managing accounts payable and receivable, creating reports, entering data, and running payroll.

Accountant

Accountants offer business and tax advice and handle the big picture finances of a business. Tasks can include bookkeeping, business advice and planning, tax advice, tax filing, cash flow management, creating reports, and analyzing business financials.

Certified Public Accountant (CPA)

A CPA, or certified public accountant, is and accountant who has passed a certification exam. Often considered more knowledgeable and trustworthy because of the education and work it takes to get and maintain their licensing. Tasks can include everything an accountant can do, plus the ability to create audit reports and represent your business legally before the IRS.

If you are overwhelmed by daily financial takes and looking to save time, a bookkeeper might be the best way to go as they are often cheaper than accountants. However, that doesn’t mean you should hire just a bookkeeper and call it good. You still need an accountant. An accountant will provide insightful business and tax advice that a bookkeeper can’t.

So the real question becomes, does your business need an accountant or a CPA?

All CPAs are accountants, but not all accountants are CPAs. Here’s how accountants and CPAs differ and what advantages each can offer your business:

Certified Public Accountant (CPA) Accountant

Must have a Bachelor’s and have successfully passed the CPA certification exam

Generally has a bachelor’s degree, preferably in accounting

Offers advice and insight about the big picture finances of a business, and can often offer deeper knowledge of tax codes

Offers advice and insight about the big picture finances of a business

Can create audit reports and review reports

Can only create compilation reports

Can legally represent a client

Cannot legally represent a client

Often an experienced CPA will charge more than a traditional accountant, but because of their rigorous education and certification, many business owners view CPAs as more qualified and trustworthy. Plus, a CPA can legally represent your business before the IRS in case of a tax audit. If these are qualities your business requires, you can narrow your search down to CPAs specifically.

Another thing to be aware of is that accountants can specialize in certain areas.

Type Definition

Forensic Accountant

An accountant who analyzes books for fraud, inaccuracies, and discrepancies. Often tasked with figuring out if an employee is stealing from the business.

Management Accountant

An accountant who helps businesses understand how certain decisions affect their finances. Tasks include planning, budgeting, business strategy, and risk management.

Cost Accountant

An accountant who focuses on current costs and how they can be improved. Tasks include cost analysis and budgeting.

Project Accountant

An accountant hired on a project-by-project basis to manage and oversee a specific business project. Tasks include management, approving expenses, project invoicing, job costing, and maintaining budgets.

Knowing which type of accountant you need and what you need them to do will help guide your search.

Where To Find An Accountant

How To Find The Perfect Accountant For Your Small Business

Step three: where can you find an accountant?

Well, there’s always the good ol’ Internet, but let’s face it — there are just some things you shouldn’t Google and an accountant is one of them. The best way to find an accountant is by getting a referral.

Ask your friends and family if they know of any good local accountants. See what accountant your fellow business owners use. Ask your local Chamber of Commerce or other local small business organizations and clubs if they have any recommendations. One tip from the accounting software provider Patriot Software is that oftentimes if you are a member of your local Chamber of Commerce, you’ll have access to accountants who partner with the organization and provide discounts for their services.

A personal referral is one of the best ways to find a trustworthy accountant, but if this doesn’t work, there are some trusted sources you can use to find and vet a potential accountant including:

  • The American Institute of Certified Public Accountants (AICPA)
  • The IRS Directory
  • CPAdirectory.com
  • Accountant-finder.com

If you use existing accounting software, you can often find referrals to certified accountants through your accounting software company. The nice part about this is that the accountants will already be familiar with the software you use.

Factors To Consider When Choosing An Accountant

How To Find The Perfect Accountant For Your Small Business

The fourth and most important step to finding the perfect accountant is knowing what to look for. Here are some of the key factors to consider.

Credentials

Pay attention to the prospective accountant’s credentials. Are they a certified public accountant? Do they have any additional credentials such as a CMA (certified management accountant) or CFE (certified fraud examiner)? Are they licensed to practice in your state? Find an accountant whose credentials you value and trust.

Experience

In addition to credentials, an accountant’s experience speaks volumes. Learn where they went to school, how long they’ve been in business, and what area they specialize in. Do they have experience with your specific type of business and industry? This expertise will be key in choosing an accountant who will help you grow.

Services Offered

Every accountant specializes in different areas and offers a variety of services from basic bookkeeping to taxes to audits to business planning and more. Learn exactly which services and tasks a prospective accountant will perform and make sure their work lines up with your business’s wants and needs.

Location

Ask yourself if location matters. In the past, a local accountant was the only way to go. Now, with the rise of the internet, you could opt for a remote accountant. Ask yourself how important face-to-face interaction with your accountant is so you can find the right fit for your business.

Cost

As with anything, the cost can make or break your decision. Take a careful look at your budget (or take this time to create a small business budget if you don’t already have one) and see how much you can afford to spend on an accountant. When interviewing prospective accountants, ask them about their fees and pricing structure. You want to get a good deal, but more importantly, you want to get a good accountant, so don’t sacrifice quality for cost.

Reputation

When choosing an accountant, analyze the prospective accountant’s reputation. Ask for referrals and speak to current clients. Do a little LinkedIn stalking and see how the prospective accountant interacts with their clients. Are they nice? Do they seem excited about their work? Are the customer reviews positive? These are all good signs.

Personality

As a business owner, you’re going to be working closely with your accountant so personality matters. Make sure a prospective accountant is someone you can talk with, work well with, and get along with. Figure out if they are fiscally conservative or aggressive. You want an accountant who pushes your business to grow, but you don’t want someone who is on the completely opposite end of the spectrum from you and makes you feel uncomfortable about your finances.

These factors will help you evaluate how well an accountant will fit your business and its needs.

Characteristics Of A Good Accountant

How To Find The Perfect Accountant For Your Small Business

In addition to the key factors for evaluating an accountant, you also want to look for the qualities that make a good accountant.  A good accountant should be:

Trustworthy

Above all else, a good accountant should be trustworthy. Not only will you be turning to them for wisdom and advice, but they will also have access to sensitive information about you and your business. You want someone who you can trust and communicate with easily. You should feel confident in their ability to keep your information protected and private.

One of the best ways to gauge this is by asking about the accountant’s privacy policy and/or asking existing clients about their experience with the accountant.

Good Communicator

When looking for an accountant, you’ll want to focus on hiring a good communicator that will keep you posted on the status of accounts, taxes, and business reports. Since accountants often have to explain confusing accounting concepts, you’ll also want someone who is a good teacher and skips the accounting jargon so you can easily understand your business’s finances.

Timely

An accountant should value your time and perform the services you ask of them in a timely manner. A good indicator of this is if they show up on time for your consultation/interview with them. You can also ask existing clients about the accountant’s track record.

Detail Oriented & Organized

When it comes to accounting, it’s all in the details. Accountants have to be incredibly organized and detail-oriented to handle bookkeeping tasks and successfully analyze every aspect of your business’s finances.

Personable

A good accountant should be friendly and have a personality that you get along well with. You’ll be spending a lot of time with your accountant, so you want someone that is a good fit for your business.

Committed

Your accountant should be committed to their job as well as to your business. You want someone who is dedicated to his or her work and who is invested in the success of your business.

Knowledgeable & Wise

As accountants are a source of business advice, you want an accountant who is knowledgeable and wise. CPAs are often the most knowledgeable when it comes to accounting and taxes as they have to meet education requirements every year and stay up to date on the latest tax laws. You also want someone who is knowledgeable about your specific type of business and industry so they can offer sound advice to help your business succeed.

When you meet with a prospective accountant, try to get a feel for how well they display these key characteristics and be sure to talk to existing clients about their experiences with the prospective accountant.

Key Questions To Ask Before Hiring An Accountant

How To Find The Perfect Accountant For Your Small Business

The fifth and most crucial step to finding an accountant is actually meeting with them face to face. You’ll want to set up a consultation to get a feeling of who the accountant is, what services they offer, and if they’re a good fit for your business. Accountants want you to work with them, so most offer free consultations.

Treat the consultation like an interview. Just as you’d perform a job interview to see if a potential employee is going to work for your business, interview a prospective accountant to see if he or she can fill the role you need for your business.

Here are fifteen key questions to ask before hiring an accountant:

What experience and credentials do you have?

Ask the accountant what experience, credentials, and licensing they have. Are they a CPA? Do they have any extra credentials like a CMA? And do these certifications match up with the needs of your business?

How long have you been an accountant?

Often, you’ll want a seasoned accountant who has a lot of experience with accounting and your business’s industry.

What made you decide to become an accountant?

This question allows you to get a feel for the accountant’s priorities and personality. Did they go into accounting because they love their work and want to help businesses or did they want a good paycheck? The answer to this can speak volumes about a person and be a good indicator of how well you’ll get along with them.

What types of clients and size of business do you work with?

You want an accountant who has experience working with your business size and type. For example, if you’re a freelancer, you don’t want an accountant who has never had to file Schedule Cs. The more experience an accountant has with businesses similar to yours, the better they’ll be able to help you succeed.

Do you have experience working with the IRS?

If having a CPA who can represent you before the IRS is important to your business, you’ll want an accountant who has previous experience with audits.

What services can you provide my business?

This question is key. Different accountants may perform different services and tasks. Before hiring an accountant, you’ll want to be 100% clear about what they can do for you. If their services match up with your list of business needs, great! If not, you’ll want to move on to the next prospect.

Which accounting programs are you familiar with?

This could be a make it or break it situation for your business. Not every accountant will work with every accounting program. Some require you use QuickBooks, some only work with Xero. Others may be more willing to work with your existing software. If you’re incredibly attached to your accounting software, you’ll need to find an accountant who works with it.

How much do you charge for your services, and how do you bill your clients?

This is probably one of the first questions that come to mind. It’s important to have a clear understanding of exactly how much an accountant charges and how they bill their clients. Some charge per hour, some charge fixed fees for tasks, and others use monthly retainers. Make sure you know exactly how much to pay ahead of time, but also remember that cost isn’t everything. The accountant’s experience and valuable services they can provide your business are just as (if not more) important than the cost.

Will you be doing all of the work or do you delegate or outsource tasks?

Oftentimes, accountants will delegate certain tasks internally to other members of their firm or even outsource certain tasks. Ask who you will be working with most often and what privacy policies they have in place for their outsourcing. As always, never do anything you don’t feel comfortable with, so if you want an accountant who will be doing all of the work themselves, that’s totally okay. There are plenty out there who do.

Will you work directly with my bookkeeper?

If you already have a bookkeeper, ask if your accountant is willing to work with them. Oftentimes accountants will have specific instructions for bookkeepers about how certain transactions should be recorded, and the two should work closely together to ensure your books are balanced and accurate.

When are you available to your clients and how would we communicate with you?

Make sure you know how and when you can reach the accountant if you need them. Choose an accountant whose availability and response times match your wants and needs as a business owner.

What is your privacy policy?

Accountants have access to sensitive information about you and your business, like your social security number. Ask what security procedures they have in place and how they protect your privacy. Verify that they will not share your information with third-parties.

How can you help me grow my small business?

This question can give you an idea of what the accountant can do for your business and how they can help your business succeed.

Do you have any references I can contact?

Contacting current clients and asking about their experience with a prospective accountant is one of the best ways to gauge the accountant’s reputation and work.

Is there anything else I need to know about working with you?

This question allows your accountant to mention anything you may have forgotten and gives them a chance to explain why you should work with them.

Do you have any questions for me about my business?

If they say “no,” it’s a red flag. You want an accountant who is interested and invested in your business. This question gives them a chance to demonstrate that care.

Tips For Finding The Perfect Accountant

How To Find The Perfect Accountant For Your Small Business

Here are some of our tops tips and trick to help you in your search for the perfect small business accountant.

1. Ask For Referrals

Networking isn’t just about gaining potential clients but also accessing more resources. Put those networking skills to good use and ask friends, family, and other businesses for accountant referrals. This is often the quickest way of finding an accountant you can trust.

2. Cheaper Isn’t Always Better

We all like to save money, but sometimes cheaper isn’t always better. For example, an accountant just starting out might charge less to file your tax return, but an experienced accountant who charges more could get the tax return done in half the time. When choosing an accountant, don’t just look at the numbers. Look at quality as well.

3. Do Your Research

Choosing an accountant is one business decision you don’t want to rush. Don’t be afraid to take your time, meet a prospective accountant face to face, and ask questions. Check out the accountant’s reputation on LinkedIn and Yelp to see what customers have to say. View how they interact on their social media accounts. Do as much research as you can so you can feel confident in your decision.

4. Treat It Like An Interview

Choosing an accountant can seem daunting, so treat it like something you already know. Hiring an accountant is just like hiring an employee. You’re interviewing them to see if they’d be a good fit for your business. If you like them, great! If not, there are plenty of accountants in the sea.

5. Negotiate Your Fees

It’s always worth a shot. Test the waters and see how movable your accountant’s fees and pricing structure are. Try negotiating for lower fees or ask the accountant’s advice on how you can keep the fees low. Maybe they won’t change the rates, but they might tell you certain bookkeeping tasks you can perform to make their job faster (since most accountants charge by the hour, this can help save you some money).

Bottom Line: Trust Your Gut

When choosing an accountant, it all comes down to trusting your intuition. Trust your gut, listen to your instincts, follow your heart, and so on (don’t make us sing a Disney song about it). Seriously though, if you have a bad feeling about someone, or even if your personalities just don’t mash up, move on and look for an accountant you can trust and work well with.

The Hunt Is On

It’s as simple as that!

  • Step 1: Know what you need your accountant to do for you.
  • Step 2: Know which type of accountant you need.
  • Step 3: Know where to look for an accountant.
  • Step 4: Know what to look for in a good accountant.
  • Step 5: Know what questions to ask a potential accountant.

Follow our tips and tricks to help you find the perfect accountant and read our comprehensive accounting reviews to find the perfect accounting software to work with them.

The post How To Find The Perfect Accountant For Your Small Business appeared first on Merchant Maverick.

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When To Hire An Accountant For Small Business

When To Hire An Accountant For Small Business

Running a business can be quite a juggling act. Between finding the right business software to getting the funding you need to buying business insurance to managing the actual day to day processes of your business, some things get put on the back burner.

Accounting and bookkeeping are often the first places business owners fall behind, but this is the last area where you want to drop the ball. Managing your finances is the key to a successful business. But when can you manage your books on your own and when should you hire an accountant?

In this post, we’ll cover when you should hire an accountant and how much it’s going to cost you.

When Should I Do My Own Accounting?

Can I Do My Own Accounting?

We all love a good DIY, but let’s face it, we don’t want your business to become a Pinterest DIY fail. Sometimes, you just need a professional. But is accounting one of those times? Can you do your own business accounting?

To answer this question, let’s first talk about the difference between bookkeeping and accounting.

Although the phrases are often used interchangeably, bookkeeping and accounting are not the same things. Bookkeeping consists of daily business finance processes, like data entry, bank reconciliation, entering sales and expenses, creating reports, etc. Accounting analyzes those reports and data and turns that information into actionable insight about your business’s big-picture finances.

Here are some of the other differences between bookkeeping and accounting:

Bookkeeper Accountant

Handles the day-to-day financials of a business

Offers advice and insight about the big picture finances of a business

Compiles reports and business data

Analyzes reports and business data in order to offer actionable advice

Often has real-world experience, and sometimes a certification, instead of a degree

Generally has a bachelor’s degree, preferably in accounting

Can assist with payroll and sales taxes, but does not file tax returns

Files business and personal tax returns

Has knowledge of the business’s finances only

Has knowledge of the business’s finances and client’s personal finances

A business owner can do their own bookkeeping, but actual accounting should be done by a professional.

If business owners have the time and want to be hands-on with their finances, they can handle bookkeeping tasks like:

  • Bank reconciliation
  • Invoicing customers
  • Making payments
  • Accounts payable
  • Accounts receivable
  • Running payroll
  • Creating reports

Accounting software makes it feasible for business owners to perform these tasks with relative ease and manage their books successfully. However, we always recommend that business owners turn to accountants for business and tax advice.

Even as someone who is very familiar with dozens of accounting programs, if I started a business, the first thing I would do is hire an accountant. Yes, I could handle my own bookkeeping and day-to-day finances, but the advice of accountants is indispensable for running a successful business and creating and achieving long-term financial goals. Accountants can verify your bookkeeping, give business advice, analyze areas where your business can grow, offer tax advice, maximize your tax deductions, and much more.

Additionally, just because you can do your own bookkeeping, doesn’t mean you should. If financial tasks are eating up your time and taking away from the success of your business, hire a bookkeeper or delegate some of the tasks to a trusted employee. This will free up your time so you can get back to growing and running a successful business.

Oftentimes, businesses have both a bookkeeper and an accountant. Bookkeepers are more affordable, so they are a better option for daily finance tasks, whereas a better use of your money and your accountant’s time is big picture finances and business planning.

Remember: If you hire an in-house bookkeeper, make sure that you divide accounting tasks. No matter how trustworthy an employee is, you should never have one person in charge of all the books as this is the easiest way for fraud to occur. Delegate accounting jobs and put strong internal programs in place to prevent fraud, or consider outsourcing your bookkeeping instead.

When Should I Hire An Accountant?

Signs You Need To Hire An Accountant

As a business owner, you can handle your own bookkeeping, but when should you hire an accountant? What are the signs your business needs an accountant? And if you already have an accountant, when are the times you should turn to them for help?

Here are fifteen cases when you should hire an accountant for your small business:

1) When Starting A Business

The early stages of business are incredibly important. Put your best foot forward and set your business on the path to success by hiring an accountant as soon as you start a business. An accountant can help you:

  • Choose the right type of business entity (like a sole proprietor, partnership, LLC, etc.)
  • Set up your business EIN and any state licenses or requirements
  • Choose the right accounting software for managing your business
  • Create a business plan
  • Create a tax plan and explain which deductions you need to record through the year

And more importantly, they’ll be able to advise you on how to run a financially successful business.

2) When Incorporating Your Business

If you are starting out and want to become an LLC or if you want to make the jump to incorporating your business, an accountant will guide you through that process.

3) When You Need Business Advice

We said it once and we’ll say it again, one of the biggest benefits of hiring an accountant is the business expertise and knowledge you gain access to. Turn to your accountant when you need business advice. Is your cash flow lower than you’d like? Are you losing money on COGs and can’t figure out why? Having trouble obtaining certain data about your business? An accountant can help.

4) When Filing Taxes

One of the biggest parts of an accountant’s job is preparing and filing taxes. An accountant will help you with your personal and business tax returns. They’ll know which forms you need to fill out, which deductions you qualify for, and how to appease the IRS so you can sleep easy come tax season.

5) When Planning For The Future

If you need advice on how to grow your business and prepare for the future, an accountant can offer guidance and help you create a business plan.

6) When You Need Help Managing Cash Flow

Cash flow is the lifeblood of your business. Without enough cash flow, you won’t be able to pay your bills or employees; too much positive cash flow and you aren’t investing your extra money wisely. An accountant can help analyze cash flow trends, give cash flow predictions, and offer suggestions to improve your financial situation.

7) When You Need Advanced Business Analysis & Reporting

Accountants are experts in business analysis. Not sure exactly where your money is going? Want to know where you can cut back and save money? Accountants know all of this and more. They can help create reports and give financial insight and analytics, so you can take that information and use it to improve your business.

8) When You Want To Save Time On Financial Tasks

As we mentioned earlier, if you are spending to much time on managing your finances, hiring an accountant can free up your schedule so you can focus on running your business. (If you need help with daily tasks, we recommend choosing a bookkeeper over an accountant to save money on services. Read our full post CPA VS Accountant: Which Is Right For You? to learn more.)

9) When Buying Or Selling A Business

If you are considering buying a business/franchise or expanding your current business, talk to an accountant first. They’ll be able to assess if the purchase is a wise financial move. Additionally, if you need to sell your business, an accountant will walk you through the process.

10) When Buying Or Selling Property (And Other Assets)

Along the same vein, talk to your accountant before buying or selling business assets like property, equipment, office furniture, etc. Because accountants know your business finances, they’ll be able to tell you if the purchase is a wise investment.

For example, they’ll tell you if you have the cash flow to buy all new computers for the office or if you should wait until next month when the cash flow trends predict more sales. Accountants will also help you manage your assets, track depreciation, and properly write off the tax deductions you’re eligible for. When selling property or other assets, accountants will know how to records this on your taxes properly.

11) When Applying For A Loan

Believe it or not, having an accountant can help improve your chances of getting a loan. Lenders want to see that you are fiscally responsible and some lenders, like Fundbox, require that you’ve been using an accounting solution for a certain amount of time in order to be eligible for the loan. Accountants can also offer insight into how the loan will affect your business finances.

12) When Facing A Tax Audit

No one wants to be audited by the IRS, but in business, you have to prepare for the worse and hope for the best. And if the worse does happen, you want an accountant — a CPA to be exact — on your side. A CPA, or certified public accountant, can legally represent you and your business before the IRS in the case of an audit. Read our post on CPAs VS Accountants to learn which is best for your business.

13) When You Suspect Someone Is Stealing From You

This is another worst-case scenario, but if you suspect someone is cooking the books and stealing money from your business, you’ll need to hire a forensic accountant to investigate the fraud.

14) When Going Public

If you have a public corporation or want to go forward with an IPO (initial public offering), you’ll need an accountant. Public corporations are required to have audit reports to show to investors. Only a CPA can prepare these reports for you.

15) Whenever You Feel Out Of Your Depth

Bottom line: If you aren’t sure about some aspect of your business or its finances, ask an accountant. Accountants are invaluable resources that can help you whenever you feel out of your depth or like you don’t know what you’re doing.

Benefits Of  Hiring An Accountant

When Should Your Hire An Accountant For Your Small Business

Hiring an accountant will allow you to sit back and relax. You can trust that your finances are in good hands and get back to running your business with the advice and time you need to grow successfully.

Here are some of the biggest benefits of hiring an accountant:

  • Business advice
  • Quality assurance
  • Save time on bookkeeping
  • Tax support
  • Reporting and analytics
  • Managing cash flow
  • Peace of mind

Another important benefit of accountants (CPAs in particular), is that a certified public accountant can legally represent you and your business if needed. This peace of mind is priceless.

How Much Does Hiring An Accountant Cost?

Cost of Hiring An Accountant

It may seem contradictory that to manage your money, you have to spend your money on hiring an accountant, but the cost is more than worth it. Which probably leaves you asking, how much is this going to cost me anyway?

There is no set answer for how much an accountant costs. The price is going to vary significantly depending on:

  • Your business
  • The complexity of your accounting
  • The services you require
  • Whether you hire a bookkeeper, accountant, or CPA
  • The accountant’s experience
  • Location

Most accountants charge by the hour and will give you an estimate of how much the services you require will cost. The best way to figure out how much an accountant will cost is by deciding what you need your accountant to do and then searching for the right fit. Get quotes from multiple accountants and CPAs, ask if they do free consultations, and gather information and referrals from other business owners.

Also, remember that cheaper isn’t always better. A more experienced CPA may charge more than an accountant who’s just getting started, but your business may prefer the expertise of a CPA. Or, maybe one accountant charges a lower monthly fee but another, more expensive accountant is faster — the time saved could be money saved as well.

The real question isn’t how much an accountant will cost, but, can you afford not to have an accountant? That’s a rhetorical question. This is no time to be a Scrooge. The benefits of hiring a professional accountant far outweigh the cost. And, if you choose to forgo an accountant, your business and its finances may suffer. Plus, you’d have to do your own taxes, and let’s be honest, who wants that?

Next Step

It’s true! Behind every good business is a great accountant. Accountants offer financial wisdom and business insight, They make sure your books are balanced and that you get the most out of your tax returns. They walk you through business plans, cash flow management, and can even represent you before the IRS in case of an audit.

Accountants give you the tools to help your business succeed and are an important asset to have. Now that you know when to hire an accountant read our full post CPA VS Accountant: Which Is Right For You? to help you find the perfect accounting professional for your business. Then hop on over to our post How To Find The Perfect Accountant For Your Business to take the next step.

The post When To Hire An Accountant For Small Business appeared first on Merchant Maverick.

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Yahoo! Website Builder Review: Pros, Cons, and Alternatives

Yahoo! Website Builder Review_ Pros, Cons, and Alternatives

Yahoo! Small Business Website Builder is known as an all-inclusive website builder that’s tailored to helping small business owners get up and running online quickly and easily. They’re also known for offering responsive websites, which means the site fits on any device (i.e. a tablet, phone, computer).

See Yahoo’s Current Plans & Pricing

Recently, I gave Yahoo! a try for a full Yahoo! review. But before I get into the pros and cons of my Yahoo! Website Builder review, let’s dive into an overview about tools to build a website.

There are so many considerations to take into account when choosing a website builder — and really, there are a thousand ways to get what you want in the end in terms of functionality, convenience, pricing, etc. The thing to remember is: whether you’re building a simple personal website or running a business, the way you build your site has a lot of consequences.

In the long-term, it affects your versatility, functionality, and, of course, your brand. In the short-term, it can certainly add/take away a lot of headaches. That said, just like choosing a physical house or office, there is no such thing as an absolute “best” or “top” choice. There’s only the right choice relative to your goals, experience, and circumstances.

What Is Yahoo! Website Builder?

On the wide spectrum of website building solutions, Yahoo! lives on the end that is all-inclusive and provides everything you need to get started and grow your website. It contrasts with solutions where you buy, install, and manage all the “pieces” of your website separately.

Using Yahoo! is sort of like leasing and customizing an apartment in a really classy development instead of buying and owning your own house. You’re still in control of decor, cleaning, and everything living-wise – but you leave the construction, plumbing, security, and infrastructure to the property owner. That point is key because there’s usually a direct tradeoff between convenience and control.

Everything may fit together just right with a website builder like Yahoo!, but that may or may not be what you’re looking for.

As far as competition, Yahoo! competes with all-inclusive website builders like GoDaddy, Wix, Squarespace, Jimdo, and WordPress.com  (and Shopify for online stores).

Compared to their direct competition, they focus on speed, ease of use, and responsive design (again, web jargon for making your website mobile device-friendly). Yahoo! offers several website templates you can customize, and it also allows you to build your own pages from scratch using their premade sections that you can drop onto the page.

One other quick aside – a disclosure – I receive referral fees from all the companies mentioned in this post. My opinions & research are based on my experiences as either a paying customer or consultant to a paying customer.

Pros of Using Yahoo! Website Builder

Here’s what I found to be the pros of using Yahoo! website builder — not just in comparison to direct competitors like GoDaddy and Wix, but as an overall website solution.

Straightforward Sign Up Process

One of the biggest pros of using Yahoo! Sitebuilder is how easy it is to get up and running on the platform. It’s basically just two steps — pick your theme, enter your information to create your account, and you’re in! Yahoo! automatically sets you up with their free plan, so you don’t even have to pull out a credit card.

Yahoo Sign Up Process

This is great for DIYers who want to get up and running as quickly as possible without the hassle of creating a detailed account, selecting a niche, etc.

Template Design / Functionality

Yahoo! also offers a wide selection of template designs that are responsive (AKA they look good on a mobile device, tablet, and computer). There are a wide variety of options to choose from, and all of the templates are really well designed.

Yahoo Website Options

Yahoo! Site Builder isn’t technically drag-and-drop (you choose from premade sections and “drop” those onto your page), but it is fairy intuitive to use. You can customize the styles on the page (like fonts and colors), and you can add premade sections and blocks, but you don’t get the ability to add elements willy nilly.

I did like how the software automatically matches a new “section” to your overall theme for you, so you don’t have to worry about changing the fonts and colors to match what you already have.

Yahoo Apply Website Style

The whole setup is like painting by numbers.

There are obvious drawbacks to this setup, which I will cover in the disadvantages, but it is a real advantage to having limited but accessible design options. It makes Yahoo! Site Builder a great option for small business owners / DIY-ers who want a website that looks professionally designed without having to hire someone to build something custom or spend much time tweaking the design themselves.

Free Starter Plan

Another benefit Yahoo! Site Builder is their free starter plan. In comparison to their direct competitors, Yahoo!’s free plan is fairly extensive.

While some website builders cap your pages or even your access to support with a free plan, Yahoo! offers unlimited pages, support, and even built-in SEO functionality on a page-by-page basis.

Yahoo SEO Elements

There are some cons with the free plan, such as limited storage, having to use a subdomain (ex: yourname.yahoosites.com), and extremely limited integrations — but if you’re looking for a simple site for a short-term project, this could be a solid option.

Some Product Integration

Another benefit of Yahoo! Site Builder is their product integrations. Aside from offering DNS and hosting services, Yahoo! also offers email functionality in their paid plans.

Yahoo Plan Options

You can also get ecommerce functionality, but Yahoo! separates ecommerce websites into an entirely different category (“stores” instead of “websites”) with their own unique pricing plans — which we’ll touch more on in a bit!

Cons

Of course, no review would be complete without looking at the downsides. Every piece of software will have complaints. Let’s look at the specific cons I found with using Yahoo! as your website builder.

Pricing + Plans

While Yahoo! is fairly easy and convenient for DIYers and small businesses, they do leave a lot to be desired when it comes to pricing. All of their plans come with storage caps, which means you’re limited to the photos, documents, files, etc. you store on your website.

It’s confusing to having ecommerce websites in an entirely different category. These websites come with different pricing plans, functionality, and specifications.

On the one hand, this is fine if you know that you want to build a shop from the get-go. But if you wanted to start with a website then add on ecommerce functionality, this structure makes it more complicated.

Yahoo Ecommerce

Limited Feature Set – Design

With any technology product, there is almost always a trade-off between convenience and control (think Android vs. iOS)

And you can really see this trade-off with the Yahoo! website builder. The convenience of their design setup is great. It’s straightforward and fast, and puts your focus on getting your content into a premade template. You can add pages and sections based on your specific needs, but for the most part, it’s got everything you need.

However, if you want to go anywhere beyond the basics of design, you are limited with the builder. You can’t add anything within the premade sections, you can’t create your own sections, and the elements you can change on the overall template are fairly limited.

Yahoo Design Functions Limited

If your website is growing, or becoming a bigger part of your business, the design limitations can be crippling. And unlike other website builders that attempt to solve this issue through apps, extensions, or access to the website code or HTML, there is no outlet for a Yahoo! website builder website (in fact, it reminds me a bit of Google Sites).

Limited Feature Set – Technical

The limitations on design also bleed over into technical limitations.

Technical limitations are features that you don’t know that you want until you want them, and then you find out you can’t have them.

These are things like integrations with Facebook, Pinterest, Twitter, Google Ads, social sharing options, blogging, and a whole host of every intermediate to advanced marketing tools on the internet. Now, as I mentioned above, Yahoo! does give some integrations, like DNS / hosting services and email on their paid plans. They also allow you to insert code into the header of your website for things like analytics tracking (even on their free plan).

Yahoo Site Header Code

However, there are a ton of technical features that Yahoo doesn’t provide or that are extremely limited.

For example, let’s look at Yahoo’s SEO features. I can edit the page title, description, and keywords for the site, as well as edit the visibility. But aside from that, I’m pretty locked in to what I have. There’s no options for sitemaps, Schema, Open Graph settings – much less highly advanced options.

Yahoo SEO Limits

Even the additional add-0n products are limited. There’s not much to address marketing your site, aside from adding code for Google Analytics and Facebook Analytics or putting code into the header of your website.

Ultimately, Yahoo! leaves much to be desired when it comes to product integrations and additional technical features that can help you better market your website.

Ownership & Company Structure

My team, my clients and I have seen and worked with a lot of different software companies. One thing that I’ve noticed over the years is that companies have to follow not only the demands of their current customers, but also the demands of their business model. A company might be “good” or “bad” right now, but to know how they’ll be in a few years, it pays to spend a couple minutes thinking about their business model and how they’ll evolve to meet customer and market demands.

For example, anyone who understands that Facebook’s customers are their advertisers, not their users, can understand how & why they do the things they do. There is no inherently “bad” or “good” business model. Every model has tradeoffs. It just pays to know where you, the customer, fit in the picture, especially when you are building something as critical to your business as your website.

Yahoo! Small Business is a division of Oath, now called VerizonMedia. During the break-up and sale of Yahoo! in 2017, Yahoo! Small Business was bundled with other Yahoo! properties like Tumblr, Yahoo! Mail and bought out by Verizon, the American telecommunications giant.

In other words, Yahoo! Website Builder is a product of a division of a subsidiary of one of the largest corporations in the world.

That makes the 5 year outlook of Yahoo! Website Builder…complicated.

The potential upside is that if Verizon gives Yahoo! Small Business budget, resources, autonomy and a super-smart leader…Yahoo! Small Business could have the best products and best pricing on the Internet.

The huge downside is that if Yahoo! Small Business gets lost in the shuffle of corporate bureaucracy, then they could end up like Tumblr (another VerizonMedia property) where they’ve bled engineers, killed brand equity, and sent users fleeing for other solutions.

But in all likelihood, Yahoo! Small Business will probably end up like Blogger. A fine product, but one that is treading water within a much larger organization, especially compared with direct competitors who are either publicly-traded & focused on the SMB market (like Wix or Gator) or private & founder-driven like WordPress.com or Website Creator.

Yahoo! Review Conclusion

Yahoo certainly makes getting a website up and running easy, and given how intuitive it is to use, it makes the platform an okay choice for small business owners who need something that’s simple.

Check out Yahoo’s plans here.

However, like most all-inclusive website builders, there does come a point where there’s a tradeoff between convenience and control, especially when you factor in price. Yahoo’s pricing leaves something to be desired, especially when you get into the higher priced plans and take into account the technical limitations, even with the higher priced options. If you’re looking for something that offers more control and scalability, you’re better off elsewhere.

Not sure Yahoo fits your needs? Check out my quiz to find what the best website builder is for you based on your preferences.

The post Yahoo! Website Builder Review: Pros, Cons, and Alternatives appeared first on ShivarWeb.

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How to Accept Online Payments With Square

When you are ready to start selling online, Square (read our review) offers a wide variety of options depending on your skill level and needs. For example, if time is of the essence or you don’t want to fuss with code, build a free online store from Square’s templates and get up and running by the end of the day.

Already have a site? Choose a plugin integration from the Square Dashboard that solves your problem — without the need for code.

But those aren’t all of your options. If you do have developer expertise, you can build your checkout flow with Square Transactions API and start accepting all major credit cards with digital wallet support, too.  Square Checkout is yet another developer option that requires less coding with a pre-built payment form and digital wallet support.

In this post, we’ll explore each path so that you can get the facts and navigate to the choices right for you. Before you know it, you’ll have launched your own online store and can move on to more exciting business matters.

Note: If you’re also curious about in-store payments, check out our related post, How To Use Square To Accept Credit Cards In Person.

Webstore Integrations Developers

Build Your Webstore Quickly & Easily

Integrate With Popular eCommerce Software

Developer-Friendly Tools For Customization

Get Started

Get Started

Get Started

Highlights:

  • No coding required
  • Free personalized URL
  • Premade customizable themes
  • No hosting fees
  • Manage from your Dashboard
  • Mobile-ready storefront
  • Integrate with your in-person store

Integrate with:

  • WooCommerce
  • BigCommerce
  • Ecwid
  • 3dcart
  • OpenCart
  • Zen Cart
  • Weebly
  • WordPress.com
  • Wix
  • +More

Highlights:

  • API for custom solutions
  • In-person solutions
  • Online solutions
  • Card reader SDK
  • Customer management solutions
  • PCI and EMV compliance
  • End-to-end encryption
  • Dispute management
  • Fraud detection

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

How Much Does Square Charge For Online Payments?

The cost question can be a very loaded one when it comes to payment processing. The great news is that Square offers a transparent pricing model.

To process credit cards online with Square, you’ll pay 2.9% + $0.30 per transaction. The significant thing to note is that this flat fee encompasses much more than is typical with traditional merchant accounts. For instance, you don’t need to worry about a payment gateway (and the expenses that go with it) when you process through Square. Read on below to learn the differences between Square and a traditional merchant account — and why they matter.

Traditional Merchant Account Vs. Square

Square’s hardware and services encompass an end-to-end processing system that captures payment information and encrypts it through the payment chain with no need for a separate payment gateway.

What this means for you is cost-savings compared to a traditional merchant account. You won’t be paying initial set-up fees, PCI compliance fees, monthly account fees, batch fees, or higher rates for processing cards like American Express. Square also doesn’t assess any chargeback fees and offers merchants up to $250/month in chargeback protection. All of this is a pretty big deal because Square spares business owners from the laundry list of itemized charges that can come with traditional merchant accounts.

So if Square isn’t a traditional merchant account, what is it? Square is a third party processor. This means that instead of opening a merchant account directly, you are basically a sub-user on Square’s giant merchant account, along with all of Square’s other customers. Square acts as a payment processor and also assumes the financial risk associated with your business to do so. The whole premise behind Square is that it makes setting up a shop very easy for the busy entrepreneur. In fact, you can get an account set up and running to take payment the very same day. The Square sign-up process doesn’t even require a credit check!

While you don’t need to jump through a lot of hoops to open up an account with Square (as you would working directly with a bank), Square is more apt to terminate or put a hold on an account if certain red flags are raised. While the overwhelming majority of businesses will never have a problem with an account hold, it can be disconcerting if it happens to you. Check out our post How to Avoid Merchant Account Holds, Freezes, and Terminations to find out more. Again, most merchants will likely never have to face this issue, but it helps to cover your bases.

Now that we have covered Square Payments as a third party processor and the cost of processing, let’s dig into Square’s offerings when it comes to going live and selling online.

Option 1: Build A Free Square Online Store

Square Store Template

As I said in the introduction, you can get a free Square store up and running today with no technical expertise needed. This whole process is powered by Square Payments and Weebly (read our review). After creating a Square account, you can go back into your dashboard and select “Online Store” in the menu. Then, Square leads you through the process of selecting the categories that most closely apply to your business. You’ll get a suggested template, but you can choose a different one if you fancy another one better. You can also add your logo, choose from limited fonts, and have some color choices, but overall the design freedom here is limited to the template itself.

Again, for being free, there isn’t much to complain about. A Square store is the simplest solution to get your shop up and running. All you need to do is add your products — your eCommerce shop syncs with Square POS and all of the other Square software and tools. Your inventory automatically updates when you sell an item, too.

One potential drawback to the freemium option, however, is that you are bound to the Weebly logo in your domain name and the footer of your website, and your shipping options are minimal. The screenshot below shows the shipping options available when setting up the free Square store with Weebly. Note that you must upgrade your Weebly plan to calculate real-time shipping rates:

Square Free Store Shipping Setup

If you want a bit more customization and dynamic shipping calculations (among other upgrades), you can purchase a domain and upgrade to a professional or premium account through Weebly.

Square Online Store Upgrade Options

Square and Weebly

The free online store option, although robust in its own way, limits you a bit. As you can see from above, for example, if your company relies heavily on shipping items with large size or weight ranges, it may be worth it to you to go to the Premium eCommerce plan for the real-time shipping rate calculator and accurate rates for UPS, FedEx, or other third party carriers.

The free store also has a 500 MB storage space limit, which could limit the number of photos on your site. The paid tiers give you a considerable upgrade with unlimited space, along with website analytics and insights.

As far as accepting payment goes, you can accept all major credit cards. Digital wallets like Apple Pay are not supported at this time, but I suspect they will be soon. For more about the pros and cons of this solution, check out our Square Online Store and eCommerce Review.

Option 2: Connect Square To An eCommerce Platform

Square eCommerce Apps

Whether you already have your site up and running or you are building your site from the ground up (or somewhere in between), you can probably find what you need in the Square App Marketplace. Square integrates with many eCommerce platforms, including:

  • 3dcart (read our review)
  • Wix (read our review)
  • BigCommerce (read our review)
  • WooCommerce (read our review)
  • Ecwid (read our review)

And of course — let’s not forget that Square also integrates with Weebly, as well as WordPress and WP EasyCart.

On the topic of app integrations and Square, it’s worth noting that Square can easily integrate with a range of different types of apps that you can shop for right from your dashboard. You can find everything from accounting to invoicing, employee management, loyalty and rewards, and marketing, to name a few. Pricing depends entirely on the apps themselves, but the Square App Marketplace is set up to compare costs easily.

All of Square’s basic eCommerce features integrate with these apps, so you’ll be able to enjoy the same payment processing rates, security protection, and inventory updates as you sell. Of course, each app platform has specific features and benefits, so the finished product (and look) varies depending on the integrated solution you choose. Check out The Best eCommerce Integrations That Work With Square Payments for our top picks!

Option 3: Build Your Own Checkout With Square APIs

If you already have your own site and you have developer expertise, then you have two more options thanks to Square API: Square Checkout and Transactions API. The most significant difference between the two is that Square Checkout is much closer to an out-of-the-box solution. With Square Checkout, Square is actually hosting the payment form, and the UI is already done for you. If you want more freedom in the checkout and payment UI and you want to host the payment form on your site with customized branding, you can opt for Square Transactions API.

Here is a handy side-by-side comparison chart to give you an overview of what you can expect with each solution. Note: All Square APIs and SDKs are free to use. As always, you pay only the payment processing fees.

Square Checkout Feature Square Transactions API
Yes Requires Developer Support Yes
No Can Customize Yes
Yes Square Hosted No (You host)
Yes Store Customer Data Yes (With integration)
No Card on File & Recurring Payments Yes (With integration)
Yes (Customer data
& itemization)
Detailed Dashboard Reports No (Transaction
amount only)
Recommended,
not required
SSL Needed Yes, with
separate integration
Yes Eligible for Chargeback Protection Yes (with conditions)
Yes Data Encryption Yes
Yes PCI Compliance Included Yes
Yes Itemization Yes, with Orders API
No Dynamic Shipping Calculations No
Yes Accept Google Pay Yes
Yes Accept Apple Pay Yes
No Accept MasterPass Yes
Yes Accept All Major Credit Cards Yes
Yes Inventory Syncing Yes, with Inventory API

The choice between Square API and Transactions API largely depends on your particular needs and what you find most important in the customer journey.

Other Ways To Accept Online Payments With Square

Square Developer In-App

Though we have explored several options in Square payments, there are yet a few more to keep in mind. Before we go on, it’s worth mentioning that you can’t add an embeddable “Buy Now” button to any site like you can with PayPal or even Shopify. However, there are still ways to take payments online — even without a website! Let’s check out the last two ways you can take payments via Square from your customer online — through invoices and in-app payments.

Invoices

Square Invoices

You don’t need an online store to send and collect payment from your customers if you use invoices. Square allows you to send one-off invoices for single orders, or to set up recurring invoices for subscriptions or even installments. It’s easy to track the status of invoices and follow up right from your Square Dashboard, too. Want more info on invoices? Check out How To Use Square Invoices To Ensure You Get Paid On Time so you can leverage this option for your business.

In-App Payments

With all the cash being exchanged through in-app purchases, it was only a matter of time before Square decided to join the party. That’s right; now Square offers in-app payment support with a few lines of code! You can update elements to match your app’s style and have the freedom to customize the look and feel however you want. It’s all in Square’s Transaction APIs and completely free for you to use with your Square account.

Is Square Online Payments Right For You?

Square offers solutions for both the tech-savvy and those who want something ready to run out of the box. With that being said, the more appropriate question is, “Which of Square Online Payment solutions are right for you?” And that answer comes down to your needs. From a quick-to-set up Square Store to Transaction APIs that are customizable and free to us, or plug-ins apps that add eCommerce to your existing site, there are many solutions to choose.

Keep in mind that you can add or subtract Square’s services and other integrations to scale up or down with you as needed, so you don’t have to make a final decision today. Setting up a Square account is the first step to get the ball rolling and see the options along the way. With no sign-up fees, binding contracts, or credit checks, Square is one of the least intimating companies to deal with if you are just checking things out.

The post How to Accept Online Payments With Square appeared first on Merchant Maverick.

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Zero Fraud Liability: What It Is And What You Need To Know

If you’ve recently undergone credit card theft, it can be a harrowing experience to see unauthorized purchases show up on your account. Besides having to deal with canceling credit cards and requesting replacements, losing money is never fun. Luckily, many issuers offer something called zero fraud liability.

A zero fraud liability policy means you won’t be held accountable for those unauthorized purchases. Such a feature can save you much hassle (and money!) long-term. While it isn’t legally required for business credit cards, it’s still a standard inclusion on most popular business-centric cards.

To get the full nitty-gritty on zero fraud liability, read on!

What Is Zero Fraud Liability?

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Zero fraud liability protects you against fraud in case your card gets lost or stolen and is then used without your consent. In most cases, the liability policy covers unauthorized purchases made online and in-person. The “zero” part means that you are protected against any amount a fraudster spends on your card; in some cases, you may have $50 fraud liability, which means you’ll still be on the hook for up to $50.

Almost all issuers offer some form of fraud liability. However, only consumer cards are required to do so by federal law. Corporate or business cards are not required to offer fraud liability.

It’s also worth noting that if your card network (like Visa or Mastercard) offers zero fraud liability, you’ll be automatically covered. You won’t need to go through extra hoops to sign up, as you might with a rewards program.

How Zero Fraud Liability Works

When you launch a fraud investigation, your card network should cancel all unauthorized charges immediately. Because you’re protected by a zero liability policy, you won’t be held liable for any of the payments.

How to actually go about a fraud investigation varies from network to network. American Express, Discover, and Visa handle all cases and want you to come to them first. Mastercard, however, requires that users first contact merchants and request that the charges be canceled before reaching out.

Technically, issuers have 10 days to investigate fraud. In some cases, it may take even longer. This means that you won’t always have immediate access to money that’s been fraudulently used. However, most major issuers and networks provide next-day access to funds.

You’ll be able to catch fraudulent charges by monitoring your credit card statement, or by checking your activity digitally via an online portal or smartphone app. It might be a good idea to get into the habit of checking your activity on a weekly basis—that way you can catch fraud before it gets out of hand.

Some issuers also offer fraud monitoring services. These services will check to see if a purchase falls outside your usual buying habits, or perhaps monitor risky websites for your information. If your card’s network offers such a service, you can sign up to get text alerts, email notifications, or phone calls when they spot questionable activity.

When Does Zero Fraud Liability Apply?

Signs Your Small Business Needs To Switch Payment Processors

If your card is physically stolen and used by the thief, you won’t be responsible for any of their purchases. Similarly, if your card is stolen online (say, in a data breach or hacked database), you’ll also be covered.

In many cases, you won’t be able to receive coverage for PIN-based debit transactions (this is true for all Mastercards and Visa cards). This is because fraud liability policies usually only cover signature-based transactions. On top of this, most zero liability policies only apply to U.S.-issued cards.

Additionally, you may not be able to get your money back through your card’s fraud coverage if a disgruntled employee goes on a spending spree with their employee card. Because employees to whom you’ve given cards are technically authorized users, their activity may not count as fraud in the eyes of your card’s issuer or network. As such, you’re liable for purchases employees make with their company-issued credit cards.

How To Tell If Your Credit Card Has Zero Fraud Liability

There are a couple of ways to find out if your card is covered by a zero fraud liability policy. To start, you can call the number on the back of your credit card and ask if your card is covered. Most issuers also provide the necessary information on their website.

Besides reaching out to your issuer, if you know your card features Visa Business Benefits, is a Mastercard, or is issued by Discover, you likely have a zero liability policy because it is a standard feature for those networks. Of course, you’ll still want to double check because exact benefits can vary from card to card.

Additionally, while consumer or personal credit cards may not always have zero fraud liability, if your card is one of the consumer variety, you’ll have some form of fraud liability. At minimum, this policy will cover anything a thief spends over $50, as mandated by federal law.

Final Thoughts

Ultimately, zero fraud liability protects you against a thief putting charges on your credit card. This feature means you won’t lose money if your card is used fraudulently. Thankfully, it’s a fairly standard inclusion across the gamut of business credit cards, even though it isn’t required by federal law.

Curious about finding the top credit cards? Check out our list of the best cards for your business. If you want to know more about credit cards, learn about the difference between APR and interest rates.

The post Zero Fraud Liability: What It Is And What You Need To Know appeared first on Merchant Maverick.

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Types Of Business Structures: The Complete Guide

If you’re starting your own business, one of the first steps is choosing a business structure. The legal structure of your business determines how much you pay in taxes, paperwork requirements for your business, your ability to raise money, and your personal liability for the debts and obligations of your business.

Every business is different, so the legal structure you choose should be based on the specific needs and goals of your business. The best option for one business may not be best for you, even if you’re in the same industry.

Before you make your choice, the first thing on your to-do list should be to have an understanding of the characteristics of each business structure. In this article, we’ll break down different business structures and the benefits and drawbacks of each to help you make the most informed decision for your business.

Sole Proprietorship

A sole proprietorship is the most basic business structure. A sole proprietorship is an unincorporated business that is owned and operated by one person. If you engage in business activities, you are legally considered a sole proprietor. There is no need to formally register your business. However, depending on the type of business you own, you may still be required to get the state and local licenses and permits needed to legally operate your business.

Under a sole proprietorship, you may operate under your own name or a fictitious name — also known as a trade name. This trade name does not create a legal entity separate from the owner.

The owner of the sole proprietorship records the income and losses of the business on their personal tax return by filing a Schedule C form. Sole proprietors also file a Schedule SE for paying self-employment tax. These forms are filed with the standard Form 1040.

Many small business owners choose to operate as sole proprietors because of how quick, easy, and inexpensive it is to get started. However, this type of legal structure isn’t without its drawbacks.

One of the biggest downsides is that a sole proprietorship is not a separate legal entity. In fact, it is indistinguishable from its owner. This means that the business owner can be held personally liable for the debts and obligations of the business. If your business is sued for negligence, for example, your personal assets — such as your bank account and personal real estate — could be at risk. If you default on a business loan, your personal assets could be seized to repay the debt.

Sole proprietorships are best for low-risk businesses. Some entrepreneurs start off as a sole proprietorship when testing out a business idea before reorganizing under another business structure. Most commonly, sole proprietorships are selected by service professionals, freelancers, and consultants.

Pros & Cons Of Sole Proprietorships

Is a sole proprietorship right for your business? Consider these pros and cons before deciding.

Pros

  • Easy & Inexpensive: There are no costly fees associated with setting up a sole proprietorship. In fact, you don’t even have to register at all. Simply buying and selling goods or performing other business activities classifies your business as a sole proprietorship.
  • No Ongoing Requirements: Unlike other business structures, a sole proprietorship does not have requirements such as meetings or voting.
  • Simplified Taxes: You do not have to file a separate tax return for your sole proprietorship. Instead, you simply attach your Schedule C and Schedule SE to your personal income tax return. You will also have your earnings taxed just once, and you can write off your business losses on your personal return.

Cons

  • Unlimited Personal Liability: As a sole proprietor, you would be responsible for the debts, obligations, and liabilities of your business. Your personal assets could be put at risk, and lawsuits can be filed against you.
  • Financing Difficulties: Getting extra capital when you need it can be difficult as a sole proprietor. Banks, credit unions, and even some alternative lenders are hesitant to loan money to sole proprietors. You also will be unable to sell stock to raise money.

Partnership

Businesses that have two or more owners may consider forming a partnership because it is quick, easy, and inexpensive. A partnership is the simplest business structure for businesses that have multiple owners. Like a sole proprietorship, you are not required to register your partnership. Simply coming to an agreement with other owners and engaging in business activities is enough to establish a partnership. However, you may still be required to obtain the appropriate licenses and permits required to legally operate your business. You may also be required to register your partnership with your state depending on the type of partnership you form.

When it’s tax time, a Form 1065 is filed with the IRS to report income, losses, gains, deductions, and credits. The partnership does not directly pay income taxes, but instead, “passes through” profits and losses to each partner, who report this information on their personal tax returns. Profits or losses are recorded on a Schedule K-1, which is filed with personal tax returns. All partners are also required to pay self-employment tax based on their share of the company’s profits.

Before establishing a partnership, it’s always important to ensure the right partners are selected. Disagreements between partners can hinder business growth and even be the downfall of a business.

While any business with two or more owners can form a partnership, this business structure is best for low-risk businesses and professional groups. Like sole proprietorships, this structure is also a good way to test out a new business idea. If the business is successful, owners may take the next step to growth by reorganizing as a corporation.

Types Of Partnerships

We’ve established the basic definition of a partnership. However, there are three different kinds of partnership to consider. The primary difference between the three lies in the personal liability of each partner.

General Partnership

In a general partnership (GP), all owners are considered general partners. Each partner manages the business and is an active participant in day-to-day operations. Each partner is also personally liable for the debts, obligations, and liabilities of the partnership.

Limited Partnership

With a limited partnership (LP), there is one general partner that is responsible for managing the business and overseeing day-to-day operations. The remaining partners are limited partners that do not participate in managing the business and have limited control. These partners are investors only and are commonly known as “silent partners.” In this type of partnership, only the general partner can be held personally liable for the debts, obligations, and liabilities of the business.

Limited Liability Partnership

A limited liability partnership (LLP) is made up of limited partners. Partners are not personally liable for the debts, obligations, and liabilities of the business. Partners will also not be held personally responsible for the actions of another partner.

Pros & Cons Of Business Partnerships

With the right people, a partnership can be very successful. There are several benefits to forming a partnership. Before you get started, though, it’s also important to understand the risks and drawbacks associated with this business entity.

Pros

  • Minimum Requirements For GPs: General partnerships have minimum requirements and do not require filing with the state. Partnerships are also not subject to the same requirements as corporations, such as holding meetings, recording meeting minutes, and establishing bylaws.
  • Tax Requirements: Partnerships are not required to pay taxes on income, and partners can report their share of profits or losses on their personal income tax returns. Business losses can also be deducted on personal tax returns.
  • Raising Capital For LPs & LLPs: Businesses that choose to form an LP or LLP may be able to raise capital from their investors.

Cons

  • Personal Liability: General partners are personally liable for the debts, obligations, and liabilities of the business. Each partner may also be held accountable for the actions of other partners.
  • Financing Challenges For GPs: General partnerships may have difficulties getting loans or other types of business financing if the business is not a registered entity.
  • Costs: While forming a general partnership is easy and inexpensive, forming a limited partnership or limited liability partnership may be more expensive and requires filing with the state.

Corporation

A corporation is the most expensive and complicated business structure. If you plan to raise capital through the sale of common or preferred stock, your business will need to be set up as a corporation.

There are no limitations on how long a corporation can exist. If an owner dies or retires, the corporation does not have to be dissolved.

Corporations are independent legal entities and are separate from their owners. The good news is that this provides the owners with the best liability protection. The bad news is that there are more regulations and tax requirements for this type of legal structure. Most corporations hire an attorney to ensure the corporation is set up and maintained according to state regulations.

Depending on the type of corporation, double taxation may also be a concern. This means that corporations pay federal and state corporate income tax, while shareholders also report dividends on their personal tax returns. Many corporations enlist an accountant and/or tax preparer to ensure returns are filed correctly, which adds an additional business expense.

Types Of Corporations

If you plan to grow your business in the future and want to raise large amounts of capital to fund that growth, a corporation could be the best legal structure for your business. Before you make that decision, though, there are a few different types of corporations. Let’s explore the differences between each type.

C-corporation

A C-corporation, or C-corp, is your basic corporation. This business entity is completely independent of its owners. With a C-corp, owners have the best protection from personal liability. C-corps can raise capital through the sale of stock and make profits, but double taxation, higher costs associated with formation, and more legal requirements are drawbacks of this business structure.

S-corporation

An S-corporation, or S-corp, is different from a C-corp because it is used to avoid double taxation. Profits and losses of the business can be passed through to the personal tax returns of the owners without being subject to corporate tax rates. To form an S-corp, a filing with the IRS is required.

Another way that an S-corp differs from a C-corp is that there is a limit on the number of shareholders. An S-corp may only have up to 100 shareholders, which could limit the amount of capital raised by the business.

B-corporation

A B-corporation, or B-corp, is similar to a C-corp in how it is taxed. However, a B-corp must offer a benefit to the public in addition to making a profit. In some states, an annual report must be filed to prove that the company is providing a benefit to the public.

Close Corporation

A close corporation is similar to a B-corp but is a structure typically used by smaller businesses. Close corporations are generally prohibited from public trading. Shareholders run this type of corporation, and a board of directors is not required.

Pros & Cons Of Corporations

There are big benefits that come along with forming a corporation, but like other entities, there are also negative aspects to consider before choosing a corporation as your business structure.

Pros

  • Ability To Raise Capital: Corporations give you the biggest opportunities for raising large amounts of capital through the sale of stock.
  • Limited Personal Liability: Corporations offer the most protection against personal liability for shareholders.
  • Some Tax Benefits: C-corporations offer more tax deductions than other business entities, as well as lower self-employment taxes. S-corporations also offer the additional benefit of no corporate tax rates or double taxation.

Cons

  • Higher Cost To Form: It is more expensive to form a corporation than any other business structure.
  • More Requirements: Corporations have more ongoing requirements, including holding meetings, recording meeting minutes, and establishing bylaws.
  • Shareholder Restrictions: The number of shareholders is restricted to 100 or less if you create an S-corp.
  • Higher Taxes: C-corps face double taxation. Business losses also can’t be deducted on personal income tax returns.

Limited Liability Company (LLC)

Business owners that want the best of both worlds may consider forming a limited liability company, also known as an LLC. An LLC combines the benefits of other business entities to keep taxes and business requirements lower than corporations while also offering personal liability protection for its owners. All members of the LLC can fully participate in the operations of the business.

LLCs must be registered with the secretary of state in the state where the business will operate. In some states, an operating agreement will also need to be filed.

In an LLC, owners have limited liability, in most cases protecting their personal assets from being taken to pay off business debts and obligations, just like a corporation. Personal assets will also be protected in the event that the business files for bankruptcy.

Owners can select how an LLC is taxed by the Internal Revenue Service. LLCs can be taxed like a corporation, or the profits and losses can be passed through to the LLC members and filed on personal tax returns. Members must file a Form SE to pay self-employment taxes.

An LLC is best for any business that wants to protect the personal assets of its members. It’s also a good choice for businesses that want the benefits of a corporation without paying corporate tax rates.

Pros & Cons Of LLCs

Will forming an LLC best meet the needs of your business? Only you can answer this question, but make sure to fully evaluate the pros and cons of forming an LLC before making your decision.

Pros

  • Limited Liability: One of the biggest benefits of an LLC is that all members have limited liability, meaning personal assets aren’t at risk in most cases.
  • Tax Benefits: With an LLC, you have the option to choose how your business is taxed.
  • Fewer Requirements: There is less paperwork and fewer ongoing requirements for an LLC when compared to a corporation.
  • No Shareholder Limits: An LLC has no limits to its number of shareholders.

Cons

  • Expensive & Time-Consuming To Set Up: Because you will have to register with the state where you conduct operations, setting up an LLC is more expensive and time-consuming than forming an entity like a general partnership or sole proprietorship. You may also need to hire an accountant to help ensure you’re complying with the rules and regulations of your state — adding an additional expense to your list.
  • Limited Life: If a member quits, dies, or retires, the LLC may be dissolved. Some states even have laws in place that require an LLC to dissolve after a set number of years.

Nonprofit

Most businesses have one primary goal: to make a profit. One business structure is the exception: nonprofits. A nonprofit — or 501(c)(3) — is a business that is beneficial to the public.

Nonprofit corporations follow a set of rules and regulations similar to other types of corporations. However, nonprofits also have additional rules governing how profits are used. For example, profits can’t be distributed to members of the corporation.

Another difference between nonprofits and other corporations is that this type of business entity may be exempt from state and federal income taxes. However, nonprofits must register with the IRS to receive this exemption, in addition to registering with the state.

Religious, educational, literary, and scientific organizations may be eligible for nonprofit status. Charities are also businesses that are formed as nonprofits.

Pros & Cons Of Nonprofits

If the goal of your business is to benefit the public, a nonprofit structure may be the right choice for you. However, if your goal is to make a profit, consider choosing another business structure. Before you make your decision, weigh out these pros and cons:

Pros

  • Tax Exemption: Qualifying organizations may be exempt from paying corporate income tax, as well as state and local taxes.
  • Tax Deductions: Charitable contributions by a nonprofit may be tax-deductible.
  • Limited Liability: All founders, directors, employees, and members of the nonprofit are not liable for the debts and obligations of the nonprofits … in most cases. There are, however, some exceptions, such as when the organization is engaged in illegal activity.
  • Grant Opportunities: Nonprofits may be eligible for public and private grants not available to for-profit businesses.

Cons

  • Paperwork Requirements: Nonprofits must submit annual reports to state agencies and the IRS in order to maintain tax-exempt status.
  • Costs: Starting a nonprofit can be expensive in terms of time and money. Nonprofits must pay fees, and most organizations opt to hire attorneys, accountants, and/or consultants to make sure records are kept up-to-date and all regulations are followed.
  • Stricter Policies: In addition to following state laws and regulations, nonprofits are also required to follow their own bylaws and articles of incorporation.

Cooperative

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A cooperative, or co-op, is a type of business that operates for the benefit of its members. Members of a co-op are known as user-owners and have the right to vote on important decisions surrounding the growth and direction of the business. Officers and a board of directors are responsible for running the co-op.

Any type of business can become a cooperative if the goal of the business is to benefit the user-owners. Businesses that aim to sell their products or services to consumers for a profit would be better suited to form another type of business entity.

Pros & Cons Of Cooperatives

If you’ve thought about your goals and you think a cooperative may work for your business, read through these pros and cons before you make your final decision.

Pros

  • Everyone Has A Voice: Member-owners get to weigh in on key issues and decisions of the business. Regardless of how many shares a member-owner holds, all votes are weighed equally.
  • Member Investments: Member-owners buy into a cooperative, providing a source of capital that can be used for operational expenses or expanding the business.

Cons

  • Funding Challenges: Finding startup loans and other types of funding through traditional lenders may be difficult. Cooperatives have to get creative with other funding sources, such as launching a crowdfunding campaign or applying for small business grants.
  • Slow Decision-Making: Voting and making decisions can be a lengthy process. This can put the cooperative at a disadvantage if a critical decision must be made immediately.

Final Thoughts

Ultimately, the type of business structure you select is based on the current and future goals of your business. You should consider the long term plan before choosing your business structure. While you can always reorganize if needed, this process can be lengthy and expensive. If you’re still having difficulties choosing the right business structure, consider consulting with an accountant, business consultant, and/or attorney to weigh out the pros and cons of each and make the decision that’s best for your business. Once you’re ready to your business off the ground, check out our beginner guides for business to get started on the right track.

The post Types Of Business Structures: The Complete Guide appeared first on Merchant Maverick.

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How To Start And Fund A T-Shirt Business

In the world of fashion, trends come and go, but a few select pieces stand the test of time. One piece of clothing that’s found in almost any wardrobe is the t-shirt. From comfy shirts made for the gym to shirts with trendy designs worn for a night out with friends, t-shirts are a staple for men, women, and children.

T-shirts are here to stay, so why not capitalize on this fashion staple? Whether you have a degree in fashion design or you just want to become an entrepreneur, starting your own t-shirt business could be the opportunity you’ve been looking for.

In this guide, we’ll take a look at what it takes to get your own t-shirt business off the ground. We’ll start with basics such as designing and printing your shirts. We’ll discuss the importance of registering your business. Then, we’ll look at startup costs, as well as how you can get the capital you need to start your business and keep it operating. Finally, we’ll look at ways you can advertise your business to bring in customers and revenue.

Ready to take the leap into entrepreneurship? Read on to find more.

Design Your Shirts

Before you begin selling t-shirts to the masses, you have to create designs that people want to buy. The first step is identifying your target market. Are you going to sell t-shirts to men, women, children, or a combination of the three? Are your t-shirts going to be more fashionable, or are they better suited for lounging around the house or hitting up the gym?

Once you’ve identified your target market, it’s time to think about the designs you’ll use. Let’s say that your t-shirts are aimed at the active man or woman. Your designs should incorporate fitness or motivational graphics. You can also determine other features of your shirts based on your target audience, such as the type of material used. If your shirts are designed for the fitness-minded consumer, for example, select a moisture-wicking fabric.

Your t-shirt designs don’t have to be overcomplicated as long as they appeal to your target audience. The key, though, is to make sure your designs are completely original. Not only does ripping off other designs make you look like a copycat, but you could face some serious legal issues if you use the artwork or designs of others without permission.

It’s also important to remember that sometimes a design may be a complete flop. Even the most well-known fashion designers in the world have released items that weren’t a hit with their devoted fans. If one design isn’t doing the job, try something else until you find what works best for your target audience.

Also, it doesn’t matter whether or not you have any design experience. As long as you have some ideas, you can hire a designer to bring your visions to life.

Decide How To Print Your Shirts

Once you have your designs, it’s time to think about how you’re going to bring the design from your computer or tablet screen to the front of a t-shirt. In other words, you need to decide how to print your shirts.

First, you’ll need to determine the method you’ll use to print your shirts. Screen printing is one option; it is a tried-and-true method that allows you to add long-lasting graphics to t-shirts. Screen printing is best for creating large batches of shirts since the initial setup is so time-consuming. Printing smaller batches is not cost-efficient with this method.

Another thing to note is that screen printing is best for very simple designs. Complex designs or multiple colors in one design can be problematic. If you have a more complicated design or pattern, consider direct-to-garment printing.

Direct-to-garment printing works similar to your color printer at home or at the office. The DTG printer prints directly on the t-shirt. With this method, you can use multiple colors and print complicated designs and patterns. Shirts printed with a DTG printer can be extremely detailed.

Setting up a DTG printer isn’t difficult or time-consuming. However, the actual printing process does take some time, so this method is best for smaller batches of t-shirts.

Another option to consider for printing your t-shirts is using a heat transfer machine. These machines transfer designs from heat transfer paper to the t-shirt. Full-color images can be printed using the heat transfer method, and you can easily print shirts on-demand. However, the quality is often lower and the design far less durable than using the other printing methods.

Regardless of which method you choose, there are two ways you can go about printing your shirts. You can use a third-party printing service or you can purchase the equipment and do it yourself. Let’s review the benefits and drawbacks of each.

Hiring A Third-Party Printer

Many t-shirt businesses do not do the printing themselves. Instead, these businesses hire a third-party service to handle the printing for them. There are a few benefits to hiring a third party to print your shirts. The first is that you won’t have to make an upfront investment in expensive printing equipment. You also won’t have to learn how to use the equipment or spend time running it.

However, there are some drawbacks to using a third party. You’ll have to shop around to find a printing company that provides high-quality workmanship. You don’t want your customers receiving t-shirts with graphics that fade or crack or that fall apart after the first wash. Many companies offer low-cost samples so you can check the quality before placing a larger order.

You also need to shop around and compare the pricing of different t-shirt printing companies. Some companies only fill bulk orders, which could put you at a disadvantage if you want smaller batches.

If you plan to only sell your designs online, you can work with an on-demand dropshipper. Once an order is placed on your website, the dropshipper will print and ship out the order to your customer. Before choosing a dropshipper, it’s necessary to place your own order to check out the quality of the shirts. You also need to evaluate pricing to make sure you’re getting the most bang for your buck. The major disadvantage to using a dropshipper is that if an order is wrong, slow to ship, or not printed correctly, the blame will fall on your shoulders, even if you don’t have control over any of these issues.

Purchasing Your Own Equipment

The alternative is to purchase equipment and print your own t-shirts. The advantage of this is that you have total control over both the quality and the number of shirts that are printed.

The major drawback, of course, is that t-shirt printing equipment is very expensive. Expect to spend at least a few hundred dollars for a heat transfer machine. If you want a DTG printer, expect to pay tens of thousands of dollars. You will have to pay for ink and maintenance of your machine. In some instances, you may be able to lease equipment to save on upfront costs.

You also have to take the time to learn how to properly use the equipment or train someone else to take on the job.

Decide How To Sell Your Shirts

Now that you’re closer to getting your shirts designed and printed, it’s time to decide how you plan to sell your items. You can set up an online shop, open your own brick-and-mortar store, or bring your designs to local stores in your area. You may also maximize profits by combining these selling tactics.

One of the easiest sales methods is to open an online shop. Customers can browse your designs and make their purchases directly online. You can ship out the orders yourself, or you can work with a dropshipper to make t-shirts on-demand when an order is placed. This option has low startup and overhead costs.

You can also open your own brick-and-mortar store. While you’ll be able to reach customers in your local area, this option has much higher startup and operating costs. Expenses may include rent for your commercial property, utilities, fees for business licenses and permits, and equipment. You’ll also have to purchase inventory to keep in stock. If you go this route, make sure to consider your local area. For example, if you live in a remote area, you may not have a large customer base. However, if you live in a thriving city or popular tourist destination, opening your own brick-and-mortar store may be a profitable venture.

The third option is to print out smaller batches of your t-shirts and network with local boutique and business owners in your area. With this method, you won’t have to pay for your own commercial space, but you will have to give the business owner a cut of your profits.

To determine what is right for your business, keep a few things in mind. Is this going to be your full-time job, or are you just trying to make a little extra money on the side? If you don’t plan on devoting yourself full time to your t-shirt business, stick to an online shop or sell your t-shirts through other businesses and boutiques.

Calculate Startup Costs

Once you have an idea of the direction you want your t-shirt business to take, you can start thinking about startup costs. The route you’ve chosen with your business will determine how much your startup costs will be.

If you plan to open a brick-and-mortar business, you’ll have expenses including a rent or lease payment, equipment and furnishings, utilities, a point-of-sale system, and inventory. Unless you plan to do all of the work yourself, you also have to hire employees. If your business will be based solely online, your costs will be much lower — think shipping costs, plus the price of a website, software, and ecommerce platform subscription fees.

Startup costs vary significantly based on the goals of your business. You can start big with a brick-and-mortar shop and may pay tens (or even hundreds) of thousands of dollars to launch your business. Start a smaller online shop, and you can get started for as little as a few hundred dollars to launch your website and register your business.

Register Your Business

You’ve started laying the groundwork for your t-shirt business, and now it’s time to make everything legal. The first step is to determine what type of business structure you will form. The business structure you select will determine how much you pay in taxes, as well as whether or not you will be personally liable for the debts and obligations of the business.

Sole Proprietorship

Sole proprietorships have one owner. These are the fastest and most inexpensive business entities to form and do not require registering with the state. The drawback is that sole proprietorships are not separate legal entities, so you will be personally responsible for the liabilities of the business. It may also be difficult to obtain a loan or raise capital as a sole proprietor.

Partnership

A partnership has two or more owners. A general partnership is the simplest form and does not require registration. General partners will be held liable for the debts, obligations, and liabilities of the business.

You may also consider starting a limited partnership, which has a general partner and limited partners. Limited partners are not responsible for the liabilities of the business.

Finally, you may choose a limited liability partnership, where all partners are limited partners and are not responsible for the liabilities of the business.

Corporation

A corporation is the most complex business structure. As a corporation, you will pay taxes at the corporate rate. Shareholders also pay taxes on dividends, resulting in double taxation. Corporations have ongoing requirements, such as electing a board of directors and holding annual meetings.

While a corporation is more expensive and complicated to form, this is the best structure if you see a large expansion in your future. As a corporation, you can sell stock to shareholders to raise large amounts of capital.

Limited Liability Company

A limited liability company, or LLC, combines benefits of different business entities. Like a corporation, business owners in an LLC are not personally liable for the debts and obligations of the business. However, LLCs do not have to pay corporate tax rates or face double taxation. LLCs also do not have ongoing requirements like corporations.

The type of business structure you select ultimately depends on the needs of your business and your future plans for growth. If you want to build a clothing brand that’s known around the world, choose a corporation or LLC structure. If you just want a smaller online shop that helps pay your bills, a sole proprietorship may be the way to go.

Once you’ve determined your business structure, you may be required to register with your state. Sole proprietorships and partnerships may file for a DBA (“doing business as”) under a fictitious name known as a trade name.

Depending on the type of t-shirt business you plan to operate, you may be required to obtain business licenses and/or permits from state and local agencies. Fees and requirements vary by state. You can contact local agencies including your City Clerk, Department of Consumer and Regulatory Affairs, and state Department of Revenue to learn more about the business licenses and permits required for your business.

Finally, you also need to register for an Employer Identification Number (EIN) from the Internal Revenue Service. This is required if you plan to hire employees now or in the future. Many business lenders may also require an EIN when you apply for funding. If you’re a sole proprietor, you may opt to use your Social Security Number in lieu of an EIN.

Seek Business Funding

“It takes money to make money,” as the old saying goes. As the owner of a t-shirt business, the amount of money you need to start and operate your business will vary according to your business model. If you have a small online shop, for example, your funding needs won’t be as great as if you’re operating a brick-and-mortar store.

Even if you have startup costs covered, there may come a time when you need additional capital for emergencies or operating expenses. If you can’t fund these costs out-of-pocket, it’s time to apply for small business funding. Whether you turn to someone you know or apply with an online lender, there are several financing options available for your business.

Friends & Family

Know a friend, family member, or colleague looking to invest in a new business? Pitch them your business idea. Prepare your presentation carefully to let them know why your idea is a winner. In general, you have two options for getting funded by someone you know. The first is to take out a loan. Your friend or family member provides you with a set sum of money that is repaid over a period of time — along with interest. This is known as debt financing.

The next option is a strategy known as equity financing. With equity financing, an investor provides you with the capital you need to cover startup costs or operational expenses. In exchange, the investor receives ownership in your business. While you may not be required to immediately pay back the investor’s capital, they will be able to take a portion of the profits over time. They may also have some level of control when it comes to important business decisions.

No matter which route you take, always make sure everything is in writing and signed by all parties. Then, uphold your end of the bargain. Nothing can make a good relationship go south faster than a business deal gone wrong.

Small Business Loans

With a small business loan, you can receive a lump sum of money that you repay over time. In addition to repaying your principal loan balance, you’ll also pay the lender interest and/or fees. You’ll make regular payments to the lender, which may be daily, weekly, monthly, or on another schedule.

Small business loans can be used for any business purpose, including funding an expansion, purchasing equipment for your business, or for use as working capital.

Recommended Option: LoanBuilder

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You can fully customize your small business loan when you work with LoanBuilder. The LoanBuilder Configurator allows you to adjust your repayment terms and borrowing amount to create the right loan for your business.

Through LoanBuilder, you may be eligible to borrow up to $500,000. All loans come with one single fixed fee of 2.9% to 18.72% of the borrowing amount. Your fee is determined by the performance of your business and your credit history. Loans are repaid weekly over terms of 13 to 52 weeks.

To qualify for a LoanBuilder loan, you must meet the following requirements:

  • Time in business of at least 9 months
  • At least $42,000 in annual revenue
  • Personal credit score of 550 or above

Vendor Financing

As you build your t-shirt business, you’ll establish relationships with vendors and suppliers. In an ideal world, you’d always have money in your bank account to cover the costs of your inventory and supplies. However, this isn’t always the case. An emergency expense that depleted your account, a seasonal uptick in sales, or some other challenge may leave you struggling to pay your vendors upfront.

Many vendors do not offer their own credit programs, but there are lenders that offer vendor financing. With vendor financing, your vendors will be paid the full amount for their products or services while you’re able to pay off the expense over time. This prevents you from having to pay the full cost out-of-pocket for the inventory, supplies, and services you need to keep your business running smoothly.

Recommended Option: Behalf

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Behalf provides vendor financing of up to $50,000 to qualified borrowers. You can repay your loan on a weekly or monthly schedule for up to 6 months.

Behalf charges a monthly fee for its service. Fees start at 1% and are based on the creditworthiness of the borrower. There are no additional fees to receive financing through Behalf.

There are no minimum credit scores, annual revenues, or time in business requirements, although a soft inquiry will be performed when you apply. You must have a U.S.-based business and a U.S. business bank account to qualify. Funds from Behalf can’t be used to fund existing debt, such as credit card bills or payroll.

Lines Of Credit

A line of credit is a flexible financing option that allows you to access capital on demand. Instead of receiving one lump sum, a lender sets a credit limit. You can initiate multiple draws up to and including this credit limit. Once a draw is initiated, the lender will transfer the funds to your business bank account. Then, you will repay the money over time, along with any fees and/or interest charged by the lender.

Since a line of credit is a revolving form of credit, funds will be replenished as you pay off your balance. This allows you to have continuous access to capital when it’s needed. A line of credit can be used for any business purpose, including funding emergency expenses, purchasing inventory, or using as working capital.

Recommended Option: Lendio

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Lendio is a loan aggregator that gives you access to over 75 small business lenders with just one application. One of the financing options available through Lendio is a business line of credit.

Through Lendio, you may qualify for a line of credit from $1,000 to $500,000. Rates range from 8% to 24%. You could receive funds in as little as one week after you submit your application.

To qualify for a line of credit, you must meet these requirements:

  • Time in business of at least 6 months
  • At least $50,000 in annual revenue
  • Personal credit score of 560 or above

If a line of credit isn’t what you’re looking for, Lendio offers additional financing options, including:

  • Short-Term Loans
  • Equipment Financing
  • Business Credit Cards
  • Commercial Mortgages
  • Merchant Cash Advances
  • Startup Loans

Merchant Financing

If you need working capital and you use a service like PayPal to receive your payments, you may qualify for merchant financing.

Merchant financing is a short-term loan option for ecommerce businesses. Typically, qualifying is based on the performance of your business. The lender will provide you with a loan that is repaid over time with interest and/or fees.

Funds can be used for nearly any business purpose, from covering an emergency expense to buying more inventory or using as working capital.

Recommended Option: PayPal Working Capital

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If you accept payments through PayPal, you may qualify for the PayPal Working Capital program. Through this program, you can receive up to 35% of your annual PayPal sales as a loan. Your first loan can be up to $125,000.

PayPal Working Capital charges one set fee based on your sales history, the repayment percentage of your choice, and the loan amount. On days when no sales are made, no payments will be deducted. However, you must pay at least 5% to 10% of your total loan amount every 90 days.

To qualify for PayPal Working Capital, you must meet these requirements:

  • Have a PayPal Business or Premier account for at least 3 months
  • At least $20,000 in annual PayPal sales for Premier accounts or at least $15,000 in annual PayPal sales for Business accounts
  • No more than $20 million in annual PayPal sales

Business Credit Cards

Business credit cards work exactly like personal credit cards. The lender provides you with a set credit limit. You can use your card anywhere credit cards are accepted up to and including the credit limit.

The lender charges interest and fees on your balance until it is paid off. You do not have to pay off your balance in order to continue using the card provided you haven’t met your credit limit. A business credit card is a revolving form of credit, so as you pay down your balance, funds become available to use again.

Business credit cards give you on-demand access to capital whenever you need it. You can use business credit cards to pay for an emergency, purchase inventory, or buy equipment. You can also use your credit card to pay for recurring expenses, such as utility bills or software subscription fees.

Recommended Option: American Express SimplyCash Plus

SimplyCash Plus Business Credit Card from American Express



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Annual Fee:


$0

 

Purchase APR:


14.49% – 21.49%, Variable

The American Express SimplyCash Plus card puts a new spin on credit cards. This is because this card allows you to spend over your credit limit without any fees. You can also receive cash back on all purchases – even if you’re over your limit.

The amount you can spend over your credit limit is based on your usage of the card, payment history, credit profile, and other factors. If you go over your limit, you simply need to pay the amount over the credit limit each month as part of your minimum payment. There are no fees for exceeding your credit limit.

With the SimplyCash Plus card, you can receive up to 5% cash back on your purchases. Wireless phone services and office supply store purchases yield 5% cash back on the first $50,000 spent each calendar year. You can also choose one category to receive 3% cash back on, such as advertising, shipping, hardware, or software purchases for the first $50,000 spent each calendar year. All other purchases receive 1% cash back.

There is no annual fee associated with this card. You’ll also receive a 0% introductory rate for the first 9 months. After that, variable APRs range from 14.49% to 24.19% and are based on creditworthiness.

To qualify for the American Express SimplyCash Plus card, you must have excellent credit.

Recommended Option: Spark Classic For Business

Spark Classic From Capital One


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Annual Fee:


$0

 

Purchase APR:


25.24%, Variable

Don’t have perfect credit? Consider applying for Capital One’s Spark Classic for Business credit card. This rewards card gives you unlimited 1% cash back on all of your business purchases. There is no annual fee, and the card has a variable APR of 25.24%.

Additional benefits of Spark Classic for Business include free employee cards, fraud coverage, and extended warranty protection. This card also allows you to build your business credit so you can qualify for additional financing options in the future.

Applicants must have a fair credit score to qualify for the Spark Classic for Business card.

Choose Business Software

You’re one step closer to launching your business. Now, it’s time to choose the software you need to run your business effectively and efficiently. Some of the business software programs you may need for your t-shirt business include:

Bookkeeping Software

Bookkeeping software allows you to keep an eye on the financials of your business. With this software, you can easily track your business expenses, accounts receivable, and payroll. Many bookkeeping programs also allow you to track other aspects of your business, such as inventory.

With bookkeeping software, you’ll always know where your business stands financially. You’ll be able to run and print reports as needed, which may be required when you apply for business financing. Having all transactions reported in bookkeeping software can also help you prevent headaches when tax time rolls around.

No accounting experience? No problem! Check out The Beginner’s Guide to Accounting.

Payment Processing Software

If you plan to accept credit cards or other methods of payment, you will need payment processing software. Your payment processor will act as the communicator between your bank and the bank of your customers, allowing you to process credit cards, debit cards, and other forms of payment.

Point-Of-Sale System

If you want a more sophisticated way to manage your sales, you’ll need a point-of-sale (POS) system. A POS system not only includes credit card processing, but it also offers additional features including barcode scanning, inventory tracking, printing receipts, and reports and analytics.

Mobile POS systems allow you to use your app or smartphone to accept payments and keep your business running efficiently. There are also more advanced systems that include hardware such as monitors, keyboards, printers, cash drawers, and scanners.

Advertise Your Business

You’re almost to the finish line and ready to open your doors … or your online business. Before you launch, though, it’s time to think about advertising. After all, if no one knows about your t-shirt business, how are you going to make any sales? Don’t wait until after you launch to spread the word about your business — start right now with these advertising tactics.

Social Media

From middle schoolers to your own grandparents, it seems like everyone is on social media these days. Use this to your advantage to let potential customers know about your t-shirt business.

The great thing about social media is that setting up your profiles is absolutely free. You can also get started in just minutes. Set up pages for your business on Facebook, Twitter, Instagram, and/or Pinterest. Include critical information about your business on each profile including your contact information, website and/or online shop link, and photos of your t-shirts. Later, you can use your profile to share news about your business and new products, advertise sales, or host giveaways.

You can also look into advertising on social media. You can purchase ads for any budget and customize your target audience to get your name out to potential customers.

Another option to consider is talking to social media influencers. Social media influencers recommend products to thousands of followers, helping companies drum up new business. If an influencer wears your shirt and links to your website, you could see an influx of customers.

Some businesses will send a free sample of their products to social media influencers. While this does mean some out-of-pocket costs for you, the exposure you could receive could be well worth the small expense.

Want to learn how to take your social media marketing to the next level? Learn more in our Guide to Social Media Marketing.

Build Your Website

In addition to your social media profiles, you also need a website to build your web presence. Website builders make it easier than ever for you to create your own professional website. You can also easily build an online shop with today’s modern ecommerce platforms.

When you build your website, make sure that it is designed to appeal to your target audience. Don’t forget to include information on your website such as contact info, details on your products, and clear photos of what your business offers. As you build up your website, you can include additional information and features such as online chat options, FAQs, news and updates, and reviews and testimonials.

Word Of Mouth

Never underestimate the power of word-of-mouth advertising. The trick to this one is simple: provide high-quality products and exceptional customer service. If someone buys one of your t-shirts and is pleased with the quality, they’ll be proud to wear it and tell others about your business. If the shirt was poorly made or customer service was lacking, they’ll also tell others.

Word of mouth advertising is an easy and free way to get the word out about your new business. And don’t be afraid to toot your own horn. If someone gave a great review, share it on social media and your website. Don’t be afraid to ask customers to give their feedback, but don’t be pushy. Also, learn to accept criticism. Not all of your reviews and feedback will be glowing. Instead of taking offense, learn from it. Where is your business lacking? How can you make sure that each customer that purchases your t-shirts is fully satisfied? Never stop trying to improve your business, and always provide the best products and customer service to keep your customers coming back for more.

Final Thoughts

Owning and operating your own t-shirt business can be fun, exciting, and lucrative, but don’t be fooled … a lot of hard work is necessary to make your business a success. Don’t rush the process. Instead, take the time to plan out your business, create unique designs, and provide high-quality products and service that will draw customers to your business.

Want to learn more about starting your own business? Download our small business guides for the information and tips you need to launch your business venture.

The post How To Start And Fund A T-Shirt Business appeared first on Merchant Maverick.

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What Is Business Interruption Insurance And Do You Need It?

Do you need business interruption service?

There are many risks to running a business. One of the worries a business owner might have is, what would happen if I had to close the business for a time due to an accident or disaster?

Do you have a plan to deal with a loss of income or pay for utilities that aren’t working? What if you have to temporarily relocate? All of those scenarios cost money, possibly money you’re not earning. With a business interruption insurance endorsement, you don’t have to let a temporary closure result in a full closure or bankruptcy. If your business needs time to heal after a fire, a tornado, hurricane, or even an act of vandalism, this insurance provides the coverage you’ll need to keep moving forward.

Read on to learn more about business interruption insurance, including exactly what it covers, how to buy it, and more.

What Is Business Interruption Insurance?

What Is Business Interruption Insurance And Do You Need It?

If you have to shut your business for any amount of time due to a disaster or accident, business interruption insurance will protect the income you might lose and help you move to another location so you can open your doors quickly. While your property insurance might cover the physical damage of a fire or hurricane, it does not cover financial business losses. Business interruption insurance is limited to either your business’s projected gross income or your net profits.

You may be under-insured if you don’t include interruption coverage in your contract. (Business interruption coverage is an endorsement added to a commercial property policy or can be part of a Business Owners Policy. For more information on those types of policies, visit our article on the types of insurance you might need.)

What Business Interruption Insurance Covers

You can’t buy business interruption insurance by itself, so all businesses will need to bundle their business interruption endorsement with a commercial property policy. However, if you add a business interruption endorsement to your risk management plan, be aware that the policy will cover only specific aspects of your business.

  • Loss Of Profit/Income: If you are forced to close your business because of a covered disaster or accident, any lost profits or income up to a certain amount are covered in your plan. This can be a huge relief to someone in, say, a hurricane zone where a storefront might experience temporary or long-term closing.
  • Relocation: If your business is ravaged by fire or destroyed by a windstorm and you find yourself needing to move to a new location to operate, your business interruption insurance will cover the costs of that move (including moving fees and installation and set-up fees of tech and equipment.)
  • Operating Expenses: This will protect the bills you’ll need to continue paying even though your doors are closed. Employee wages are included under operating expenses, as is your rent or lease payments,
  • Paying Your Taxes: If you owe taxes or are paying property taxes on a location you can’t access, business interruption insurance will help.

What Business Interruption Insurance Doesn’t Cover

As with most policies, each company and policy will itemize exactly what is and isn’t covered. Business interruption insurance is very specific and often will state within the paperwork covered and non-covered events. While each policy is different, for most business interruption insurance policies there are specific losses and risks that are not covered.

  • Undocumented Income: Outdated records may hurt you. If you gave raises or have brought on new employees since you started your policy, your coverage won’t be enough. If you make any updates to employment, update your insurance as well.
  • Partial Closures: Only closed part-time? Business interruption insurance only becomes available once your business is completely closed. If you are still able to maintain some of your business services, then you cannot start a claim for business interruption.
  • Losses From Non-Covered Damages: If your property insurance covers floods, your business interruption will cover floods. If it doesn’t? Then your business interruption may not cover losses.
  • Economic Slumps: Unfortunately, there’s no way to make your business recession-proof.
  • Coverage From Power-Outages: A power-outage is not covered under business interruption insurance, no matter the cause. This type of temporary interruption is too ubiquitous to cover effectively. (Some policies set an amount of time that the power must be down to receive help.)

Types Of Businesses That Need Business Interruption Service

Here’s the general advice out there for small businesses: Any business with a physical storefront or location or any company that relies on manufactured goods and supplies from one or two distributors should invest in business interruption service.

A natural disaster could strike at any time and the stress of not knowing if you will be able to pay your bills or your employees is a stressor that could keep you up at night. Protect your income. Protect your worker’s wages. 

Commercial property insurance will cover your building and the things inside your building in the event of a fire or a storm (some disasters like floods and earthquakes need additional insurance coverage), but that coverage is only for physical property damage. The long-lasting effects of a closure on your business could be disastrous. Many insurance experts recommend looking into a Business Owners Policy (BOP) that can include general liability, property, and business interruption in a package.

If you have to cease business entirely because of a disaster, your business will lose money. The quicker you get back up on your feet, the better chance your business has of surviving an accident.

Beyond that, you should think about adding an interruption policy to your risk management plan if:

  • You have a physical store location
  • You conduct any part of your business on the internet
  • You are located in an area of the world that sometimes experiences a natural disaster (hurricane, tornado, ice-storm, flooding, wildfires)
  • You could not pay your employee’s income if your business closed for a few weeks
  • Your business depends on other businesses for supplies
  • You need other leader properties around you to draw traffic to your store
  • Your business depends on manufacturing from one specific supplier
  • You deal in volatile materials

Why these certain elements? There are situations where one small property disaster for you or for a supplier could also put your business in jeopardy. Your business can be interrupted by a supplier or manufacturing plant suffering an accident or closings its doors. Let’s say you are a brewer who relies on one specific type of barley and your barley supplier has a bad crop and you can’t make your beer. Business interruption service could cover a situation like that, too. If you are a small boutique located near a larger store that drives in most of your foot traffic, if something happens to that leader property your policy could cover the loss of income due to that larger store’s accident.

How Much Coverage Do You Need?

What Is Business Interruption Insurance And Do You Need It?

Once you’ve decided to invest in adding business interruption insurance, you will need to decide how much coverage you plan to purchase. In general, your coverage is determined by profit. How much your business needs will depend on several factors and questions:

  • How easily can you keep doors open at a temporary location?
  • How long will your business be closed?
  • How many employees do you have?
  • How much income will you insure and how much?
  • Does your current location have an updated sprinkler system/is a fire risk?
  • Are you located in an area where you could find another retail space easily? 

If your business is located in an area with a high risk for a natural disaster (known hurricanes, tornados, wildfires) your coverage might need to include entire seasons where you are at risk. If your business is easy to move and relocate, doesn’t rely on outside manufacturing, and has a handful of employees, you will need less coverage than a business that can’t easily relocate, will have to wait for their location to reopen to do business, or relies on other local businesses.

You can feel confident that you are getting the right coverage if the plan fully covers loss of income and payroll expenses, your projected gross income, and your projected net income. 

Buying Business Interruption Insurance

Business interruption insurance is an add-on endorsement to your commercial property insurance, so the first place to go is to the insurance company that currently issues your commercial property insurance. If you are in the market for a new policy or don’t have a commercial policy or Business Owners Policy (BOP), then most places that sell business insurance will offer Business Interruption Service.

There are four easy steps for buying insurance: Know what insurance you need, gather your business documents, comparison shop, and purchase! 

Websites Insureon, CoverWallet, and Coverhound offer comparison shopping so you can view several insurers offers at once.

Cost may be a deterrent for some small business owners. Policies can run from as little as $750 to $10,000 a year. Business interruption policies are very specific on their limit terms: your policy will itemize everything it will/will not pay out and up to how much. Your insurance team is responsible for walking you through the itemization.

To add business interruption coverage, you’ll need current documentation of your net income. Policies tend to pay per incident, but a low per-incident limit may not be enough if you hit your cap before you can open your doors again.

Once you add business insurance, keep careful and attentive records of your income as it fluctuates. If you need to boost your coverage, you’ll have the documents to show the insurance company your income.

Business Interruption Insurance Terms to Know Before Buying

Do I need business interruption insurance

As you sit down with your insurance agent, broker, or team leader in charge of buying insurance, educate yourself on some of the lingo that might come up while you plan your policy. Before you can make decisions about what kind of coverage you need, you’ll need to understand what the policy means. Here are some of the common phrases included in s business interruption insurance plan.

  • Actual Loss: The policy will only cover damage related to the disaster. Not everything will get an upgrade and if you choose to update or renovate beyond the price of the actual damage, the insurance company will not cover updates.
  • Business Income: This is your net income. Lost net income will be the sum of your lost profits and disaster-related expenses.
  • Period of Restoration: This is the time that you might need to get your business back up and running again. Your plan will account for a specific amount of time the rebuild/restoring will take place.
  • Extra Expenses: These are the expenses that occur because of the disaster (you didn’t need a rental truck before, but now you do).
  • Service Interruption: This coverage directly relates to your utilities. You can’t insure specific companies, nor can you insure against service disruption because of earthquakes.
  • Contingent Business Interruption: This is the coverage that helps you if your business is contingent on other businesses to do business. If another company suffers a loss that affects your bottom-line then this policy would protect against your losses.
  • Leader Property: If your business derives its foot-traffic from a more profitable and well-known store, that store is called a leader property. If the leader property suffers a loss and it affects your store, you may be protected from those income losses.

Final Thoughts

An interruption to normal business could happen for a plethora of reasons; even if you can’t envision a worst-case scenario, it doesn’t mean you’re exempt from encountering a loss. Since business interruption insurance can easily be added (or is included in some Business Owners Policies), it’s important to check with your insurance professional to crunch the numbers.

If you need to shut your doors for any reason, business interruption insurance will protect you, your assets, your employees, and the future of your business. Especially if you are a business in a zone with a high probability of natural disaster, this is insurance coverage you shouldn’t skip.

The post What Is Business Interruption Insurance And Do You Need It? appeared first on Merchant Maverick.

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