The Best Cash Back Business Credit Cards

A business credit card is an incredibly valuable tool for small companies. It allows you to keep your business spending separate from your personal charges, and to extend purchasing power to your employees. Furthermore, the right small business credit card can offer you valuable rewards in the form of points, miles, or cash back.

The ability to earn points and miles has its benefits, but many business people still prefer to receive cash back rewards from their credit card. Cash back can be used for anything and is never subject to the whims of the airlines and hotels, which frequently change the terms and conditions of their loyalty programs to make points and miles less valuable. And with cash back cards becoming increasingly competitive, now is the time to look for a card that can offer you the most rewards for your business spending.

Which Kind Of Cash Back Card Should You Choose?

Cash back cards for small businesses can be divided into two different categories. First, there are the cards that offer a single rate of return on all purchases, typically between 1% and 2%. Then there are the small business cards that offer bonus cash back on specific qualifying purchases while earning just 1% on everything else. To make this more complicated, many cards restrict the total dollar amount of purchases each year that qualify for the bonus, and you’ll earn just 1% back on all subsequent purchases. These limits can be imposed based on the calendar year or the cardmember year.

Here’s a list of the best cash back business credit cards. First, we’ll look at the ones that offer strong rewards on everything you buy, followed by those that feature bonus rewards on some purchases.

Cards That Offer The Same Cash Back Rewards On All Purchases

Some small business owners are content to use the same cash back rewards credit card for all purchases and want to earn the highest rate of return they can without having to worry about bonuses. In the past, it was common for small business cards to offer a mere 1% cash back on all purchases, but that is no longer considered to be a competitive rate of return.

Today, the best small business cash back cards that offer the same rewards on all purchases will give you at least 1.5% cash back. Some of these cards will do so with no annual fee, but you should expect to pay more for cards that offer higher returns. It also makes sense to look at the benefits offered by these cards, as well as other possible fees, such as those for foreign transactions.

Capital One Spark Cash

Capital One Spark Cash
capital one spark cash select
Annual Fee $95 ($0 the first year)
APR Variable, 18.24%
Signup Bonus $500 cash back
Rewards 2% cash back on all eligible purchases
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Capital One offers a full line of small business credit cards under its Spark brand, which includes cards that offer points towards travel or cash back. The Capital One Spark Cash small business card offers you 2% cash back on all purchases, with no limits. New cardholders can also earn $500 in cash back after using their card to spend $450 within three months of account opening, one of the best cash back sign-up bonuses offered anywhere. Other benefits include free employee cards as well as quarterly and annual spending reports. Your purchases are also covered by damage and theft protection policies for their first 90 days, and an extended warranty that can add one year to your manufacturer’s warranty.

As part of the Visa Signature program, the Capital One Spark Cash also offers a range of travel and shopping benefits and discounts. For example, you can receive a third night free and premium benefits at luxury hotels around the world as part of the Visa Signature Luxury Hotel collection. The $95 annual fee for this card is waived the first year, and as with all Capital One cards, there are never any foreign transaction fees.

Capital One Spark Cash Select

Capital One Spark Cash Select
capital one spark cash select
Annual Fee $0
APR Variable, 14.24% – 22.24% (0% introductory APR for the first 9 months)
Signup Bonus $200 cash back
Rewards 1.5% cash back on all eligible purchases
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This card is very similar to the standard Capital One Spark card, but it offers 1.5% cash back on all purchases with no annual fee. Therefore, this card makes the most sense for those who have more modest spending requirements that don’t justify the annual fee of the standard Spark Cash card.

With this version, new cardholders can earn a $200 cash bonus when they spend $3,000 on their card within three months of account opening. It includes many of the same benefits as the standard Spark Cash card, such as purchase protection and extended warranty coverage. It’s even part of the Visa Signature program, which is rare for a card with no annual fee.

The Plum Card From American Express

The Plum Card from American Express
Annual Fee $250 ($0 for the first year)
APR No APR — charge card
Signup Bonus None
Rewards 1.5% discount when you pay early
60 days to pay purchases that you put on your card
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This small business card offers you cash back in a unique way. First, the Plum Card from American Express is a charge card, not a credit card, so you are required to pay your entire statement balance in full, every month. But when you make your payment within 10 days of your statement closing, you’ll receive 1.5% cash back on all of your purchases. Alternatively, you can take up to 60 days to pay your balance, but without receiving any cash back. This card makes sense for small business owners who may prefer to earn rewards some months and help manage their cash flow and extend payment at other times.

New applicants can earn up to $600 in cash back, but with a large minimum spending requirement. You will earn a $200 statement credit after each $10,000 you spend on the card, up to $30,000, within the first three months of opening your account.

Other benefits include extended warranty coverage and a purchase protection program. The card also comes with an account manager feature that lets you delegate a trusted individual that can manage your business card.

American Express small business cards participate in the OPEN Savings program, which offers discounts on purchases from FedEx Express and FedEx Ground, Hertz®, HP.com, and others. The $250 annual fee is waived the first year, and there are no foreign transaction fees.

Wells Fargo Business Platinum Credit Card

Wells Fargo Business Platinum
Annual Fee $0
APR Variable, 12.49% – 22.49% (0% introductory APR for the first 9 months)
Signup Bonus $500 cash back
Rewards 1.5% cash back on all eligible purchases
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This card features 1.5% cash back on all purchases and has no annual fee. New accounts can earn $500 in bonus cash back after spending $5,000 within three months. Cash back can be applied automatically as a credit to your account or deposited to your eligible checking or savings account each quarter. Or, you can receive your rewards in the form of points that can be redeemed for merchandise, gift cards, or airline tickets, with a 10% bonus when you redeem your points online.

This card also features cash management tools and spending reports that are available online. There’s no annual fee, and you can add up to 99 additional employee cards at no extra cost. There are also no foreign transaction fees.

Cards That Offer Bonus Cash Back Rewards On Some Purchases

When you have a small business rewards card that offers you the same amount of cash back for all purchases, the most you can possibly get is 2%. But when your small business card offers you bonus rewards for buying certain items, it’s possible to earn as much as 5% cash back on some of the purchases you make the most. As a trade-off, you’ll only earn 1% cash back on all purchases that don’t qualify for a bonus.

Other factors you should consider when choosing one of these reward cards are which purchases will qualify for the bonus and any annual maximums on eligible rewards. For example, some credit cards will offer bonuses that are limited to qualifying purchases in the United States only, while others don’t have any restrictions transactions made in other countries. Furthermore, many of the most generous bonuses come with annual limits, after which you’ll only receive 1% cash back. These limits can be relatively large, such as $250,000 in annual purchases, or they can be limited to as little as $25,000 in qualifying purchases each year. 

Costco Anywhere Visa® Business Card By Citi

Costco Anywhere Visa® Business Card By Citi
Annual Fee $0 (but must have a Costco membership)
APR Variable, 16.49% (0% introductory APR for the first 7 months)
Signup Bonus None
Rewards 4% cash back at gas stations (max $7,000 per year)
3% cash back on restaurants and travel
2% cash back on purchases from Costco in-store and online
1% cash back on all other purchases
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Costco stores are known for their low prices on bulk goods, and this model also appeals to small business owners. The Costco Anywhere Visa® Business Card from Citi is one of the strongest cash back small business cards that offers bonuses on many purchases. With this card, you can earn 4% cash back on your first $7,000 spent each year on gas purchases, including those from Costco, and 1% after that. You also earn 3% cash back on all restaurant and travel purchases worldwide, 2% cash back from all Costco purchases and 1% cash back everywhere else.

This card includes damage and theft protection that covers your eligible purchases for 120 days (90 days for New York residents) as well as an extended warranty policy that can add a year to your manufacturer’s warranty. You also receive worldwide auto rental insurance, travel accident insurance and access to a travel and emergency assistance hotline. There’s no annual fee for this card with your paid Costco membership and no foreign transaction fees.

Simplycash Plus from American Express

Simplycash Plus from American Express
Annual Fee $0
APR Variable, 13.49% – 20.49% (0% introductory APR for the first 9 months)
Signup Bonus None
Rewards 5% cash back on office supply stores and wireless telephone services (up to $50,000 per year)
3% cash back on a category of your choosing – see below (up to $50,000 per year)
1% cash back on all other purchases
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This small business card offers a high level of bonus rewards on some of your most frequent business purchases, and with no annual fee. You’ll get 5% cash back at US office supply stores and on wireless telephone services purchased directly from US service providers. You can also receive 3% cash back on the category of your choice from a list of select categories, including:

  • Airfare purchased directly from airlines
  • Hotel rooms purchased directly from hotels
  • Car rentals purchased from select car rental companies
  • US gas stations
  • US restaurants
  • US purchases for advertising in select media
  • US purchases for shipping
  • US computer hardware, software, and cloud computing purchases made directly from select providers.

The 5% and 3% cash back offers only apply to your first $50,000 in purchases each calendar year, and you’ll earn 1% thereafter. Note that the cash back earned is automatically credited to your statement each month.

This card also includes 9 months of interest-free financing on new purchases before the standard interest rate applies. Other benefits include a roadside assistance plan, a baggage insurance policy, and car rental insurance. Your purchases will be covered by an extended warranty policy as well as a damage and theft protection plan. There’s no annual fee for this card, but there is a 2.7% foreign transaction fee imposed on all charges processed outside of the United States.

Ink Business Preferred Card From Chase

Ink Business Preferred from Chase
Annual Fee $95
APR Variable, 17.24% – 22.24%
Signup Bonus 80,000 points
Rewards 3 pts./$1 for travel; shipping; internet, cable, and phone; and social media and search engine advertising (up to $150,000 per year)
1 pt./$1 on all other purchases
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This premium small business card from Chase offers Ultimate Rewards points, and you have the option of redeeming them for cash back or other options. New accounts can earn 80,000 bonus points after spending $5,000 within three months of account opening. You’ll also earn three points per dollar on your first $150,000 spent in each account anniversary year in combined purchases on travel, purchases, internet service, cable and phone services, and on advertising purchases made with social media sites and search engines. You can earn one point per dollar spent on all other purchases.

Points can be redeemed for one cent each as cash back or statement credits. Other options include transferring your points to miles with nine different frequent flyer programs or using points with four different hotel programs. Notably, your points are worth 25% more when you make travel reservations through the Chase Ultimate Rewards travel center. Finally, points can be redeemed for approximately one cent each towards merchandise or gift cards.

Also included in this card’s benefits are trip Interruption and trip cancellation insurance, and a cell phone protection plan. You’ll receive accidental theft and damage insurance, as well as an extended warranty policy that can add up to a year of coverage to your manufacturer’s warranty. This card has a $95 annual fee and no foreign transaction fees.

The Ink Business Cash Card From Chase

The Ink Business Cash from Chase
 
Annual Fee $0
APR Variable, 14.49% – 20.49% (0% introductory APR for the first 12 months)
Signup Bonus $300 cash bonus
Rewards 5% cash back on office supply stores and internet/phone/cable purchases (up to $25,000 per year)
2% cash back on gas stations and restaurants (up to $25,000 per year)
1% cash back on all other purchases
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This entry-level small business card offers you 5% cash back on your first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. You’ll earn 2% cash back on your first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year, and 1% cash back on all other purchases.

Benefits include purchase protection and extended warranty coverage. When traveling, you also have access to travel and emergency assistance services, as well as a roadside dispatch hotline. There’s no annual fee for this card, but a 3% foreign transaction fee is imposed on charges processed outside of the United States.

The Business Advantage Cash Rewards Mastercard From Bank Of America

The Business Advantage Cash Rewards Mastercard from Bank of America
Annual Fee $0
APR Variable, 12.49% – 22.49% (0% introductory APR for the first 9 months)
Signup Bonus $200 cash back
Rewards 3 pts./$1 for gas stations and office supply stores (up to $250,000 per year)
2 pts./$1 on restaurants
1 pt./$1 on all other purchases
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This small business credit card can offer you up to 3% cash back on some of your business purchases. You’ll earn 3% cash back at gas stations and at office supply stores on up to $250,000 spent each year, and 1% cash back after that. You also earn 2% cash back on purchases at restaurants and 1% cash back on all other purchases.

New accounts can earn $200 in cash back after spending $500 within 60 days of account opening. New accounts will also receive nine months of 0% APR financing on new purchases before the standard interest rate begins to apply.

Points are available for cash back after earning $25, and you can choose to redeem your rewards as a statement credit or have cash deposited into a Bank of America small business checking or savings account. There’s no annual fee for this card, but it does have a 3% foreign transaction fee.

Final Thoughts

For a concept as simple as cash back, there are actually quite a lot of different small business credit card offers available. It’s important to do your research and select the one that will offer you the most benefits. While some small business owners will need to choose between cards with bonus offers and those without, others may be able to maximize cash back by carrying at least one of each. Closely examine the features and benefits of each of the cards above, and you’ll have all the information you need to find the card that best meets the needs of your business.

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The Best Credit Card Processing Apps for Small Retail Businesses

small-business-credit-card-processing-app

Say you have a small retail business. You don’t have a lot of money to invest in a super-complicated POS, and you don’t want to deal with a multi-year processing contract. Frankly, the idea of trying to narrow down the options in both categories at the same time is a little bit daunting. But enter another option: an app for a tablet (or even a smartphone) that bundles payment processing and POS software all in one go, with no contract or commitment. A single app with all (or at least most) of the features a brick-and-mortar storefront could want. But what are the best credit card processing apps for small retail businesses?

Cost is definitely part of the consideration, but more than that you need to make sure any software you use actually delivers the features you need to run your business. Most processing apps tend not to be as full-featured as a full POS, but they are capable of delivering on core needs. After we go over which features should be a priority, we’ll get into the most promising apps that let you process credit cards and run your business together.

Credit Card Processing Apps For Small Retailers

In addition to choosing apps based on the most useful features, we had two other criteria in choosing the apps: first, they had to be mobile apps for tablets (and preferably smartphones). Second, they must offer a bundled payment solutions. A couple of the options on the list allow you to bring your own processor if you want, but they do offer their own payment option as a default.

In no particular ranking, here are my favorite picks for retail-focused credit card processing apps:

Square

Square business model and mobile credit card processingSquare does have a specialty POS app for retailers, called Square for Retail. That one doesn’t actually make the cut because it’s designed for larger businesses and it actually lacks many features found in the basic free app, Square Point of Sale.

Point of Sale has definitely come a long way from just a basic mobile POS app, and it’s absolutely a solution that will grow with your business. Its clear, transparent pricing strategy (2.75% for swiped/dipped/tapped transactions) and robust app make it an attractive option for retailers. But then there’s the assortment of add-on services (email marketing, appointment scheduling, loyalty, payroll and more) that all integrate seamlessly. Combined with the huge assortment of supported phones and tablets, and the wide mix of supported hardware, and it’s hard not to see the appeal.

While Square does offer payroll and employee management, these features will cost you more — $5 per employee per month for each.

Something I do want to point out: Square does have many iPad-only features, but much of its hardware is equally compatible with Android devices as it is iPads, which is a major departure from most apps that favor the Apple ecosystem.

PayPal Here

PayPal Here review: One of the top Square alternativesPayPal is an obvious choice for a lot of retailers, especially those who sell online as well as in person. If you’re not interested in eCommerce, PayPal is still a good option because it does integrate with some very well known POS systems. PayPal also has its own credit card processing app, PayPal Here.

While PayPal Here is not quite as robust as the other options on this list (especially regarding inventory), it’s a very stable app with great pricing (2.7% per swipe/dip/tap) and a wide array of supported devices and compatible hardware. It’s the only app on this list to support Windows devices at all, and the phones on your tablet or phone doubles as a barcode scanner for both Android and iOS. Plus, you get up to 1,000 free employee accounts.

Plus, near-instant access to funds through your PayPal account is a pretty awesome deal, especially if you get the PayPal Debit card. Add in free sub-user accounts with restricted permissions (something Square will charge you monthly for), and you can see why PayPal makes the cut.

Shopify

Shopify started as an eCommerce offering but these days it’s added a powerful POS app that also works on smartphones as well as tablets. Everything syncs up nicely for a seamless experience whether you’re selling online, in a store, or even on the go, and while the smartphone version of the app is more limited, it’s still quite functional. Shopify’s features definitely line up more with a full-fledged POS than just a mobile POS.

Unsurprisingly, that means it’s a bit more expensive than the two previous options on this list. Shopify’s plans start at a very reasonable $29/month for its online store. If you want the countertop retail solution, that’s a $49 add-on per month, but you don’t need to purchase additional licenses to add more devices, which definitely ups the value.

You can also create staff PINs without creating staff accounts — which means if only a few of you need admin privileges but you do have a large staff and want to track who is running the register, you can get PINs without paying for additional accounts.

However, I do want to call attention to an underplayed solution Shopify offers: its Lite plan. For $9/month, you can sell on Facebook and other social media platforms, add a buy button to your blog, and use the POS app. The caveat is that you can’t add the retail package to it — which means while you have the app, you don’t have support for the receipt printer or cash drawer.

ShopKeep

Like Shopify, ShopKeep is more of a full-fledged POS than a mobile unit. But unlike Shopify, it’s not an eCommerce solution. It’s an iPad POS targeting all kinds of small businesses: retailers, yes, but also restaurants and quick-service environments. ShopKeep specifically targets small and medium-sized businesses, whereas many of these solutions are happy to tout that they work for businesses of all sizes.

ShopKeep’s user interface is highly intuitive, but also feature-rich, which is a major contributor to its popularity. In addition to its advanced inventory tracking tools, you get employee time-keeping, customizable reporting, and more. It also has a record for excellent (unlimited) customer support via email or live chat.

Sadly, there’s no smartphone app support for processing, but ShopKeep does offer integrated payments. Merchants get an interchange-plus plan based on their volume, which is pretty awesome considering there’s no contract involved, either. Everything is on a month-to-month basis. There’s also an additional $69 monthly charge per register.

Honorable Mention: SumUp

While SumUp has a few limitations — it lacks, for example, the ability to process simultaneously on multiple devices — it is overall a solid credit card processing app. The app supports a solid item library and variants, plus convenient tax settings. While there’s no offline mode and no invoicing, SumUp does have an interesting feature in its SMS payments. The app allows you to send a text message to a phone, with a link embedded. Customers can open the link, enter their payment information and complete the transaction.

Pricing is identical to Square for retail transactions: 2.75%. There is no keyed entry option within the app, but the low-priced virtual terminal (at 2.9% + $0.15, even below Square’s rate) is a workaround, though not one you should use for the bulk of your processing.

While new to the US market, SumUp has been operating in Europe for a few years, so it definitely has experience in the processing industry, and so I expect it to see fewer growing pains than other new solutions.

Must-Have App Features for Retailers

It’s safe to say what app features a business needs tends to vary from one business to the next. But there are definitely commonalities — solid inventory management or the ability to print receipts, for example. Check out our comprehensive comparison chart below to see how these systems compare to one another. 

Square for retail review logo imageSquare PayPal Here Shopify Shopkeep SumUp
BASICS
Integrated Processing Yes Yes Yes (Other options available) Yes (other options available) Yes
Processing Rates (for Most Swiped/Dipped Transactions) 2.75% 2.70% 2.70% Interchange-Plus based on volume 2.75%
Monthly Fee $0 $0 Plans start at $9/month $69 per register $0
Number of Devices Unlimited Unlimited Unlimited 1 (additional registers $69/month) 1
Tablet Support Apple, Android Apple, Android, Windows Apple, Android Apple Apple, Android
Smartphone support Apple, Android Apple, Android, Windows Apple, Android N/A Apple, Android
Email/SMS Receipts Email/SMS Email/SMS Email Only Email Only Email/SMS
Receipt Printer Connectivity Bluetooth, Ethernet, USB Bluetooth, LAN, Wireless Bluetooth, USB, LAN Bluetooth, Ethernet Bluetooth, LAN
Cash Drawer Connectivity Yes (Tablet Only, With Printer Connectivity) Yes (With Star Printer Connectivity) Yes (iPad Only, with Printer Connectivity) Yes (With Printer Connectivity) Yes (with Printer Connectivity)
Barcode Scanner Yes (Bluetooth for iPad only; USB for Android) Yes (USB for windows, device camera for iOS/Android) Yes (Bluetooth) Yes (Bluetooth) No
FEATURES
Split Tender Yes Yes Yes Yes No
Offline Processing Mode Yes No Very Limited No No
Full and Partial Returns Yes Yes Yes (including store credit) Yes (Check store credit) Full Only
Sub-User/Employee Accounts Yes (monthly fee) Yes (free) Yes (PINS/accounts) Yes Yes (Limited)
Discounts by $ or % Yes Yes Yes Yes No
Customizable Receipts Yes Yes Yes Yes No
Generate Invoices Yes Yes Yes No No
INVENTORY
Bulk Item Upload Yes No Yes Yes No
Item Counts Yes No Yes Yes No
Item Variants Yes Yes Yes Yes Yes
Item Photo Yes Yes Yes No Yes
Create Item From App or Dashboard Yes Yes Yes Yes No (App Only)

It’s worth mentioning that many of these systems have FAR more features that we don’t cover in this chart (think: virtual terminals, eCommerce support, supported integrations, etc.). If you really want to learn what a system is fully capable of, I recommend checking out our complete review of each credit card processing app.

Processing with Square or PayPal Here? Up Your Inventory Game with Shopventory

With retail environments, inventory is usually a major concern. Shopventory is a monthly add-on that works with Square, PayPal Here, and the Clover system (except Clover Go). It allows for inventory tracking and reporting, bundling, variants, and more. The biggest difference will be that you’ll no longer be using your credit card processing app for inventory reports or management. Everything will be done through Shopventory’s dashboard. Check out our Shopventory review for more information.

Final Thoughts

When it comes to software and processing, there isn’t a good one-size-fits-all solution for merchants. Every business’s needs are unique, so what works best for one business may not be good for another. Many of the credit card apps we’ve listed here have no monthly fees, and others offer free trials or a free pricing quote. They are all top-rated offerings, as well. The biggest difference you’ll find is the feature sets and little differences in the user interfaces.

If you’re on the fence about which to choose, I recommend checking out our full reviews of each product. Got questions? We’re always here to help, so please leave us a comment!

As always, thanks for reading!

The post The Best Credit Card Processing Apps for Small Retail Businesses appeared first on Merchant Maverick.

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Crowdfunding For Startups: 8 Tips For Launching

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startup crowdfunding

For a people who revere startup culture and the idea that one can bootstrap one’s way to business success, we seem to prefer the TV version to the real thing — especially as of late. It turns out that new business creation recently approached its 40-year low. Banks are retaining their Great Recession-era tight-fistedness and the costs of education, housing and healthcare continue daily to expand beyond the ability of most Americans to keep pace. Frankly, our veneration of the entrepreneurial spirit does not appear to extend to supporting policies that would actually increase people’s ability to take the financial risks required to start their own business.

Due to these factors — along with the legalization of equity crowdfunding accomplished via the passage of the JOBS Act in 2012 — crowdfunding has arisen as a means of raising startup funds. You may only be familiar with crowdfunding in the context of all the medical- and disaster-based campaigns that have been making the news lately, but crowdfunding is a viable way to raise money for businesses as well.

The fact is, for the right kind of new enterprise, a crowdfunding campaign can be a great way to raise a much-needed initial infusion of capital. The biggest crowdfunding site for startups, Kickstarter (see our review), has seen over $3.4 billion USD raised by product-oriented business projects. To be fair, this money didn’t just fall into the laps of the startups in question. Crowdfunding takes some work to get right. However, it’s hard to imagine that the campaigners who raised that $3.4 billion could have raised that same sum via conventional means.

Just know that you’ll have a lot of competition for those crowdfunding dollars. You need to go into it with more than just a good story (not to discount the value of a good story!) — you’ll need to tailor your campaign to suit your particular enterprise, and you’ll need to give your potential backers a personal stake in supporting you with the promise of rewards, profit, or both.

Here’s what you should do to prepare before you begin.

Table of Contents

1) Learn Which Type Of Crowdfunding Suits You Best

If you know anything about non-charitable crowdfunding, you’ve likely heard of Kickstarter and its rewards-based crowdfunding model. What you might not be aware of is that Kickstarter is but one method of crowdfunding available to startups.

Rewards Crowdfunding

Rewards crowdfunding is what most people think of when they hear the term “crowdfunding.” Along with Kickstarter, Indiegogo (see our review), Patreon (see our review), and GoFundMe (see our review) are examples of popular platforms offering rewards crowdfunding. I’ll get into the differences between these platforms later on, but suffice it to say, these platforms generally involve raising money from The Crowd in exchange for rewards that are directly related to your startup’s mission. The platform will then take a cut of what you raise (except in the case of GoFundMe).

Equity Crowdfunding

Equity crowdfunding is a different beast entirely. The field of equity crowdfunding is a new one. It was legalized by the JOBS Act, which was signed into law in 2012 and whose provisions have gradually taken effect over the last few years. The JOBS Act was seen as a way to facilitate greater access to capital in the wake of the 2008 financial crisis.

Equity crowdfunding differs from traditional rewards crowdfunding in that instead of backing a project in exchange for exclusive illustrations or a gadget or tickets to a performance, backers become investors who receive an ownership stake in the company. Investing is much more heavily regulated than rewards crowdfunding, so it’s a more legally complex way of raising funds than using Kickstarter. What’s more, the JOBS Act provides for two similar yet distinct forms of equity crowdfunding: the type in which you raise money from accredited investors only (which basically means rich people) and the type in which you can raise money from non-accredited investors (everyone else). Most equity crowdfunding platforms, including Crowdfunder (see our review) and Fundable (see our review), offer equity crowdfunding for accredited investors only, while a few upstart companies like Wefunder (see our review) offer equity crowdfunding for all (sometimes referred to as Regulation Crowdfunding).

Debt Crowdfunding

Debt crowdfunding, like equity crowdfunding, involves investing in a security of the company in question. However, with debt crowdfunding, the investor is a lender who gets paid back on a fixed schedule with interest. From the perspective of a startup, getting into debt crowdfunding means you’re borrowing money — not from a bank, but from a crowd of investors. Kiva U.S. (see our review), Lending Club (see our review) and Prosper (see our review) are all prominent debt crowdfunding outfits.

If you’re wondering which of these three types of crowdfunding best fits your startup, here’s a quick rundown for you:

  • Rewards crowdfunding is best suited to startups in the business of producing content for people to consume. Artists, gadget makers, podcasters, filmmakers, and board game producers have all made good use of rewards crowdfunding.
  • Equity crowdfunding makes sense for startups with exponential growth potential that do not produce a singular product or experience to share with a crowd of backers.
  • Debt crowdfunding is for startups that need cash for a defined purpose and that have the ability to pay back the loan.

For more information on the subject, I recently wrote an article comparing and contrasting these three types of crowdfunding. Check it out!

2) Research Different Platforms To Understand Their Differences

Simply knowing the difference between the three varieties of crowdfunding doesn’t provide enough information for you to settle on a platform. For one thing, crowdfunders like Indiegogo and Fundable offer both rewards and equity crowdfunding. For another, the terms, fees, content policies, and even the structure of the crowdfunding campaigns themselves differ from platform to platform.

For instance, you might be trying to raise funds to build your own board game company and have your sights set on Kickstarter. However, Kickstarter is a more exclusive platform than most rewards crowdfunders — it might not accept your campaign proposal. What’s more, you might find Kickstarter’s all-or-nothing funding policy intimidating. With all-or-nothing funding, if you raise less than your stated goal amount during the length of your campaign, you get nothing at all. You might find a platform like Indiegogo more to your liking, as Indiegogo accepts any campaign that doesn’t violate its rules while allowing you to collect whatever you raise with your campaign regardless of whether you’ve hit your goal.

Let’s say you’re an artist collective seeking to put on monthly art exhibitions. The Kickstarter/Indiegogo fundraising-for-a-one-time-event model of crowdfunding may not be for you. You might find Patreon to be a better fit. With Patreon, backers (or “patrons”) sign up to support you on an ongoing basis, either per month or per creation. You won’t have to gin up a new crowdfunding campaign every time you want to start a big project.

Likewise, equity crowdfunders vary greatly in their policies — SeedInvest (see our review), for example, boasts of only accepting 1% of those who apply to crowdfund on its site, whereas EquityNet (see our review) accepts any startup applying to use its services.

3) Check Out Other Crowdfunding Campaigns To See What Works (And What Doesn’t)

When you’re raising money via crowdfunding, you have one big advantage over those trying to raise money via other means. If you’re applying for a bank loan, you don’t get to browse through every loan application ever submitted to the bank or view the result of every application. But with crowdfunding, in most cases, the data is there for everyone to see!

Kickstarter is typical for a crowdfunding site in that every campaign ever posted to its website is left up permanently, regardless of whether the campaign succeeded or not. For the creator whose ridiculous campaign never really got off the ground, this permanent record of failure may not seem like such a boon. However, if you’re a startup looking to identify patterns in past crowdfunding campaigns that correlate with success — as well as patterns that correlate with not-success — this data is quite valuable indeed. I would strongly advise you to make use of it! Don’t be too proud to emulate what has been shown to work.

4) Be An Intensive Self-Promoter

If you’re the modest, retiring sort who spurns self-promotion, get ready to change your approach  — that is, if you want your campaign to succeed. Spend some time promoting your startup’s cause before taking the crowdfunding plunge (Indiegogo recommends at least two months of prep time before launch).

Do the legwork necessary to build up your social media following before starting your crowdfunding campaign, so that when you launch your campaign, you’ll have a built-in audience that is already receptive to your message. Contact journalists who cover your field. Build an email list. Consider buying ads on Facebook or Twitter to promote your campaign. Unfortunately, with crowdfunding as with so much else in our fallen world, you have to spend money to make money.

Remember to tailor your self-promotional efforts to fit your audience. If you’re looking to conduct business with accredited investors, a hard-nosed, data-focused approach may bear more fruit than a flashier look-how-cool-we-are campaign.

5) Create A Professional Video

I suppose I could have included this point in the previous section, but I think it deserves to be emphasized on its own. According to Kickstarter, posting a video to go along with your campaign increases your likelihood of ultimately succeeding from 30% to 50%.

Here’s another example of “spend money to make money” — a professional video with decent production values will make your potential backers more confident in the potential of your enterprise than something produced on the cheap. I’d love to live in a world where one could devote all one’s energies towards their true passions and not have to set aside time and resources for salesmanship, but we don’t live in that world. So, make a video. Keep it to just 2-3 minutes. You can get personal, but make sure to hit all your main points about your startup and its potential. Don’t forget to mention the benefits backers stand to earn!

6) Get Commitments From Backers Before Launching Your Campaign

It might not be fair, but it’s not easy to attract backers when your campaign first launches. An adverse first impression can easily dissuade someone from contributing to your campaign, and seeing “$0 pledged” next to your project can be enough to cause a prospective backer’s wallet to close. That’s why it’s important to line up commitments from backers before your campaign launches.

Time to make your family and friends prove their love to you by securing their backing before your campaign goes live! Gather commitments from your followers as well. Remember how I mentioned that you should build an email list of potential backers? Here’s where you can put that list to good use. Email your followers immediately when your campaign goes live. Get some pledges early and it will be all the easier to get subsequent commitments from backers. Data provided by Kickstarter backs this up — while their overall project success rate is just a hair under 36%, projects that raise over 20% of their goal have a 78% success rate.

7) Don’t Be Afraid To Use Analytics

The use of analytics is the only way you’ll be able to tell just what kind of traffic to your campaign page is converting to pledges. Use whatever analytical tools are available to see where your pledges are coming from and how you can boost them.

For instance, Kickstarter’s Project Dashboard gives you access to a trove of data regarding exactly where your backers are coming from. This data is invaluable when determining where you should focus your marketing.

kickstarter

8) Stay In Touch With Your Backers

Show your backers that you respect them by staying in touch with them. Keep them updated on your progress. After all, these are people who made a financial commitment to you knowing that there’s no guarantee that your plans will come to fruition.

Monitor social media chatter related to your campaign to see if particular concerns pop up repeatedly. If so, do what needs to be done to address these concerns. After all, you’ll want to stay in their good graces if you want to launch another crowdfunding campaign in the future!

Final Thoughts

Crowdfunding doesn’t work out for every startup that tries it. If you do your due diligence, however, you greatly increase the likelihood that your campaign will reach its funding goals. Follow these tips, and you’ll have a fighting chance to get the funding you need so that you can ultimately focus on growing your startup, not on fundraising!

Jason Vissers

Jason Vissers is a writer, cereal chef and Netflix aficionado from San Diego. A native Californian who enjoys the beach, Jason nonetheless prefers to do his surfing on the World Wide Web, the raddest wave of them all. Jason can’t eat raisins.

Jason Vissers

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Thank You Page Best Practices, Ideas & Examples

A visitor has taken some sort of action on your site… hurray!

Before you celebrate too much, let’s talk about your Thank You page.

The Thank You page is one of the most underrated pages on a website. We often focus so much on getting someone to take an action (like purchasing a product, signing up for a webinar, downloading a whitepaper) that we forget how valuable a Thank You page can be, or the effort we should put into it.

A Thank You page, when used correctly, can be a crucial part of nurturing your audience.

But before we dive into some best practices, let’s cover the basics.

What is a Thank You Page?

A Thank You page is where a visitor is taken after completing a desired action on your website. It’s also sometimes referred to as a “confirmation” page because it confirms an action was taken.

A Thank You page can follow up any desired action on your site, from filling out a contact form to subscribing to an email newsletter or purchasing a product on your site.

Do I Need a Thank You Page?

If you have some sort of action you want visitors to take (also known as a “conversion” in marketing speak), then you absolutely need a Thank You page on your website.

This page not only serves as a way to confirm the action was taken successfully, but it also allows you to continue to engage your visitors, especially while they’re still “warm” (sales jargon for they’re more likely to want to interact/do business with you).

A visitor who has just taken an action on your site is incredibly valuable because they’re indicating they’re interested in you and what you have to offer. An effective Thank You page is a way to further that relationship and keep that interest growing.

Plus, saying thank you after your audience does something on your site is just plain polite.

Thank You Page vs. Thank You Message

A lot of forms and landing pages include built-in functionality to display a confirmation message once an action is completed. This functionality generally keeps users on the same page and simply replaces the form/download button/purchase area with a thank you message.

While showing this message is enough to confirm the action, in most cases, it doesn’t do much for continuing to engage with your audience. This is where a dedicated Thank You page can do wonders for your post-conversion opportunities.

By leveraging an individual page instead of a message on the existing page, you have more flexibility and opportunities to increase engagement, share relevant content, and provide additional opportunities to convert.

For more about thank you pages vs. thank you messages, check out this article by Hubspot.

Thank You Page Best Practices

Now that we’ve covered the basics, let’s dive into the details. Here are seven Thank You page best practices you can implement on your own site.

Give Confirmation

The first thing your Thank You page should do is confirm whatever action your visitor just took was completed successfully. For example, if they’ve just subscribed to your weekly newsletter, your page might say something like, “Thank you for subscribing to our weekly newsletter.”

Your Thank You page should also confirm any relevant details relating to the conversion, such as how long it will take you to respond after they’ve filled out a contact form, or when they can expect to receive the whitepaper they’ve opted-in for.

ShivarWeb Thank You Page

Ex: ShivarWeb

Remember, this is someone who has indicated interest in your business. You want them to feel valued right off the bat and to know that the action they took actually worked. The best way to do that is to confirm all of the details as soon as they finish the conversion.

Include Navigation

One of the worst things you can do on your Thank You page is keep your audience stranded there. These are people who have just indicated they’re into what you have to offer, which means this is the perfect time to keep them hanging around your site!

At the very least, your Thank You page should include your website’s navigation to allow your audience to stick around and explore your site some more.

The Skimm thank you page

Ex: The Skimm

Provide Related Content/Actions

Aside from using your navigation to give your audience an opportunity to stick around, your Thank You page is also a great place to provide related content or additional actions your lead may find interesting.

For example, if they’ve just opted-in to a whitepaper, you could provide related content on the same or a similar subject. This is a great way to continue to “warm up” your visitors (AKA make their interest in you grow) without being overly sales-y.

You could also use this opportunity to lead your users further “down the funnel” (the next step closer to purchasing) by offering another relevant action. For example, Hubspot offers a free session to learn more about their software after you opt-in to download one of their guides.

Hubspot Thank You Page

Ex: HubSpot

If your Thank You page shows when a visitor has already taken a purchasing action, you can still use related content to keep them engaged. The easiest way to do so is to display related items they may also be interested in — Amazon is renowned for doing just that!

Amazon Related Items

Ex: Amazon

Add an Offer/Promotion

Did a customer just enter to win a free product? Why not offer a coupon code to encourage them to purchase something sooner?

Adding an offer or promotion can be an excellent way to encourage warm visitors to convert, or to increase the value of a converting customer by enticing them to purchase additional items.

Keep in mind that your offer should be something relevant to their action and worthy of their attention. You don’t want to come across as spammy over overly sales-y. You want to provide something that feels uniquely valuable to your audience and relates to whatever action they just took.

Get Social

Encouraging people to connect with you on social media is a great way to further connect with a warm audience.

Instead of just leaving links to your social profiles, take it a step further and tell visitors why they should follow you. What can they expect to see if on they follow you? News about your business? Tips and tricks related to the action they just took? Spell out the value and make it clear it’s worth it.

katelyn dramis thank you page

Ex: Katelyn Dramis

You can also use your Thank You page as an opportunity to spread the word about your business. This works particularly well for actions like webinar registrations and offer redemptions.

If your Thank You page is confirming an offer redemption or webinar sign-up, include social share buttons to encourage your converters to spread the word on social media with their friends. They obviously think what you have to offer is worth signing up for! There’s a good chance they’ll spread the word for you, too.

Show Off Testimonials

Even if your visitor has just completed a purchase, your Thank You page can still be a place of reassurance that you’re as great as you say you are.

Use your page as an opportunity to show off social proof, whether it be customer testimonials, the number of social media fans you have, or a quick stat or case study.

Your Thank You page should continue to warm your visitors and encourage them either to purchase down the road or to purchase again. Using social proof to help reassure them that you’re the real deal can help this process significantly.

Encourage Opt-Ins & Account Sign-Ups

A Thank You page is the perfect time to ask your audience to become a regular part of your community and an ongoing converter.

For e-commerce businesses, asking your purchases to create an account after converting can yield far more results than asking prior to purchase (and can reduce cart abandonment).

If your business doesn’t include the opportunity for customers to create accounts, you can still invite converters to be regulars by asking them to opt-in to your email newsletter on your Thank You page. Make sure you specify why your audience would want to subscribe to your newsletter — what is it you’ll be offering that makes it worthwhile?

Conclusion & Next Steps

Your Thank You page can be an amazing tool in your sales arsenal if used correctly. Don’t let all of your focus go toward the conversion — spend adequate time on your confirmation page and yield the benefits time and time again.

Start by taking a look at your own Thank You page. Does it confirm the action your visitor took? Does it offer opportunities to stay engaged with your business? If it doesn’t, start by introducing one way for users to continue to interact with you.

Remember, like all pages on your website, your Thank You page isn’t set in stone. Test one approach to adding some meat to your page (like adding related content or a call-to-action to follow you on social media) and see how it works. Then, adapt!

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Top 3 Project Management Apps For Large Businesses

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Earlier this year I wrote a blog post describing the top three project management apps for small businesses. In the interest of fairness, I figured I should round things out and post a similar list, this time focusing on apps that can handle the demands of a larger business. I actually thought it might be a simple task, but it wound up being more complicated than I expected. Whereas small businesses might appreciate ease of use and simplicity, these things are potentially less of a priority in a larger company (though I would argue that good design lends itself to ease of use). Instead, comprehensive features that include time tracking, scheduling, and even invoicing are the order of the day here.

With that in mind, my criteria for selecting the following apps were price, breadth of features, and finally, of course, that “X-Factor” that makes these choices stand out from the crowd. I also considered whether or not the program has an open API, allowing you to develop your own apps and fully customize your experience.

Okay, enough of the intro! Let’s dive into our analysis of the top three project management apps for large businesses.

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Smartsheet

Smartsheet review

Smartsheet (read our review) is one of the oldest kids on the project management app block, founded way back in 2006. Affordable and powerful, Smartsheet’s biggest strength is its scalability. It will feel immediately familiar to employees with knowledge of other spreadsheet programs (like Excel) and can be used in many similar situations. It’s not easy to use in a broad sense, but this is not an overly complex program and it has only a relatively small learning curve.

Price

While not the cheapest project management app, Smartsheet is also by no means the most expensive. With an upper limit (for the “business” subscription) of $25/user/person, Smartsheet’s pricing scale ends where other, more expensive apps begin. There is also an option for Enterprise pricing, but you’ll have to contact Smartsheet to hash out the details on that one.

Breadth of Features

Smartsheet is far more than just a spreadsheet program or budgeting tool. Offering portfolio management, scheduling functions, and more, this is an app that covers almost the whole range of standard and advanced project management features. Importantly, Smartsheet also offers an advanced suite of reporting features to analyze every level of your companies inner workings.

“X-Factor”

Smartsheet has two major attractions for me. First, it looks and feels like a spreadsheet. If you have employees trained in Microsoft Excel or its competitors, Smartsheet will not provide a completely alien experience. That right there might be enough to counteract the fact that this is not exactly a gorgeous piece of visual design. The other big draw is the level of automation you can achieve with Smartsheet. Scheduling, task assignment, and more can be handled automatically, which reduces the chances of human error mucking up the works.

Open API

Yes!

Podio

Podio (read our review) is a project management app that, though it could be shoehorned into a mom-and-pop style business, is really intended for use in enterprise-scale environments. At once user-friendly and complex enough to handle more large-scale requirements, Podio is designed to feel like a social media platform that also houses your daily schedule and task list.

Price

Starting with a low-end price of nine dollars/user/month and topping out at $24/user/month (with enterprise pricing available), Podio is unlikely to break the bank relative to the competition, much of which starts in the $30/user/month region. I will say that, whereas with Smartsheet you could probably get away with at least some users subscribing to a lower level of service, with Podio, you may find it valuable for a larger percentage of users to work with the most expensive version. The advanced workflow and interactive dashboards alone would be worth the extra cost.

Breadth of Features

Offering time tracking, scheduling, and reporting features, Podio also pays more attention than most large-business-focused project management apps to communication. Using the aforementioned social media DNA to drive the look and feel of the app, Podio provides dedicated communication services, meaning that if your offices or employees are spread out over large distances, this might be the perfect app for you.

“X-Factor”

For me, the most pleasant surprise in Podio is the level of communication tools available. As I said, it is relatively rare to come across a developer that includes this kind of feature on an enterprise-focused project management app. Podio’s collaborative features are not just limited to in-company chat either; you can bring your clients into the conversation from within Podio itself. Neat!

API

Yes!

Genius Project

Designed originally as a project management option for IBM systems, Genius Project (read our review) is an SaaS app clearly intended for large companies with multi-tiered teams working on several projects in tandem. Some project management apps (including a few on this list) are designed in such a way that pretty much any user can figure out use them, but many of Genius Project’s features are pretty clearly intended for only trained project managers to use.

Price

While somewhat complex, Genius Project’s pricing scheme is intended to help you better tailor your subscription to your specific needs. Most employees accessing the app will need the Timesheet subscription, which currently costs around $20. Some may need the Team Member level, which runs in the $35 range. Finally, a few will need the more pricey, $45-ish subscription. It is worth noting that to acquire more accurate pricing, you will need to contact Genius Project directly.

Breadth of Features

If you can name a project management feature, Genius Project likely has some version of it available. From document management to workflows, from portfolio management to cost and resource tracking, from communication to reporting, Genius Project has covered just about everything. Importantly, though, not all users will have access to these features, so you will need to anticipate what each employee needs when deciding on what exactly to buy.

“X-Factor”

For me, the biggest attraction of Genius Project is that it is basically a one-stop shop for project management. You won’t need time tracking, chat, or even invoicing apps if you buy Genius Project. That might make the slightly higher price tag worth it.

API

Yes!

Final Thoughts

Large businesses have different needs than smaller ones, especially when it comes to project management. The three solutions listed above provide enough scalability, advanced features, and API access to make them invaluable to a large or enterprise level organization.

Looking for something for a smaller team? Check out the Top 3 Project Management Apps For Small Businesses. Have you used and liked any of the solutions mentioned above? Let us know in the comments!

Wesley Kriz is a writer from the misty peaks of the Pacific Northwest, or as he prefers to call it, the Best Coast. He is willing to debate on almost any topic, but he is admittedly very stubborn, so beware. When not writing for Merchant Maverick, Wesley is likely thinking about Star Wars, or reading Lord of the Rings.

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Business Credit Card Rewards: Everything You Need To Know

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One of the biggest perks offered by business credit cards, other than convenience, is rewards. Gamed correctly, business credit card rewards can be a way to save money on your biggest expenses.

Not sure which rewards are right for your business? Wondering what kinds of expenses to use your card on? Not even sure what’s out there? Read on!

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What Are Business Credit Card Rewards?

Simply put, they’re incentives to use your card to make purchases. When you make a purchase on your card, you’ll be awarded points or cash for each dollar you’ve spent. The number and type of points awarded vary by card. In many cases, where you’re spending it matters too.

How Many Types Of Rewards Are There?

A lot. In fact, many business credit card rewards cater to a specific type of spending. Overall, you can break them down into two broad categories.

  • Cash: This is the simplest, and oldest, kind of reward program offered by business credit cards. Cash rewards accumulate as you make purchases on your credit card. You may, for example, earn 2 percent back on every purchase you make. Depending on your carrier, you’ll have the option to redeem the rewards automatically at specific times of year, when you reach reward thresholds, or when you request them. Cash rewards can be redeemed as checks, statement credit and, in some cases, as gift certificates.
  • Rewards: Other business credit cards don’t return cash, instead awarding points or frequent flyer miles to cardholders. These cards tend to cater to specific types of business. For example, businesses whose staff frequently travel may choose a card that awards flyer miles. A business that spends a lot on telecommunications, on the other hand, may choose a card that rewards expenditures on those expenses. Other reward programs are more general, presenting you with a diverse (but limited) array of rewards to spend your points on.

What Are Reward Tiers?

Not all business credit cards have reward tiers. Cash cards almost never have them, for example, but many reward cards do.

Reward-based cards use tiers to influence your spending habits. For example, the Chase Ink Business Preferred Credit card breaks its reward point system into two tiers. For each $1 you spend on travel, shipping purchases, telecommunications, and social media advertising, you’ll earn three reward points. Any other purchases you make will be compensated with one point per $1.

Most cards that use tiers will have two or three of them. The lowest tier almost always represents miscellaneous purchases.

How To Choose The Right Reward

Business credit cards, ideally, reward a specific kind of spending behavior. With that in mind, it’s best to consider which rewards best sync up with your expenses.

This means you’ll probably want to itemize your monthly business expenses to see where you’re spending your money. You’ll also want to get the cash value of the reward points offered by any rewards cards you are considering (expect a value somewhere around a cent or two).

To make a comparison, pretend you’ve put all of your monthly expenses on the credit card and calculate the cash value of the points (or cash back) you would get for making those purchases. So if you have $800 of expenses that qualify top tier points (3) and $1,000 of miscellaneous purchases, you’d be earning $34 worth of rewards each month or $408 per year.

If your expenses aren’t concentrated in any specific area, consider cash rewards. You may not get as big a multiplier on specific purchases, but you’ll often recoup a better value on your miscellaneous purchases. Not only that, but you can spend your cash return on whatever you want. Consider cash as “breadth” to rewards’ “depth.”

What Else Should You Factor Into Your Reward Calculations?

You didn’t think it would be quite that easy, did you? Business credit card terms feature a large number of asterisks and footnotes. Here are some things you should also consider when calculating a card’s reward potential:

  • Sign-up Bonus: Many business credit cards will offer an initial sign-up bonus. This is a one-time offer and usually requires you to spend a minimum amount of money in order to qualify.
  • Annual Fee: Some business credit cards charge an annual fee to keep the card active. You’ll want to deduct this amount from your yearly reward value. Note that many cards will waive the first year’s fee.
  • Reward Limits: While it might be fun to think of ways to earn an endless torrent of reward points, your carrier is one step ahead of you. Some carriers will limit the number of top tier points you can earn. Others may stop rewarding points or cash for the year after you hit a spending threshold of, say, $150,000.

Final Thoughts

Remember that your business credit card should match your existing spending habits. Don’t fall into the trap of thinking you should have a specific card just because it’s popular or even well-reviewed.

Need help getting started? Check out our 2018 business credit card comparisons.

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he’s not pushing keys or swiping screens, he’s probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.

Chris Motola

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7 Ways To Make Your Business Website Better

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As a reviewer of small business software and services — and a human who lives in the modern era — I’ve seen my share of business websites. Many of them are so basic that they serve only to confirm that the business in question, be it a bowling alley or an accountancy firm, is not merely a front for backroom bookie Big Sal and his associates (Fingers, Lefty, and Slippery Joe). What is dodgier than a business without a URL, after all?

(Read this article if you’re wondering whether your small business even needs a website. Spoiler alert: it does.)

Few websites are anything other than forgettable, and the ones that stand out usually owe their memorability to monumentally funny errors rather than to craftsman-level design.

Your website can be — and should be — more than just an online throwback to the yellow pages, a mere repository for basic information about hours and addresses and contact emails. Your website was destined for greatness. And I’m going to help you take it there. Here are several steps you can take to make sure your website stands out for all the right reasons:

Table of Contents

Join The 21st Century (Be Mobile Responsive)

When I say, “join the 21st century,” I am not being snarky in the manner of a 90s sitcom character. (If I were, I would have said: Welcome to the Oughts, holmes!)

I am trying to stress the importance of having a modern, mobile-responsive site. There’s a word for businesses with websites that don’t work well on smartphones. And that word is defunct.

Consumers are addicted to their mobile devices. And according to this article by Marketing Land, mobile devices now drive an estimated 56% of web traffic. That’s right — chances are that more than half of your customers will find your website on their mobile browser. If your site isn’t mobile responsive, I guarantee they will exit your page as quickly as they enter.

When viewed on a smartphone, non-responsive sites appear either too large or too small, requiring the reader to manually adjust the screen. Responsive sites, on the other hand, automatically adjust to accommodate each device, be it an iPhone, a Kindle, or a Galaxy Note8. Mobile sites are often simpler and/or allow the visitor to scroll down for more information, rather than navigating from one page to another.

Effective mobile sites are sleek, minimalistic repositories of information. They should be reminiscent of your full site and good ambassadors for your brand. They should not make people throw their phones in anger.

Happily, most do-it-yourself website builders allow for mobile responsive design; if yours doesn’t, it’s time to look for a new platform. And it goes without saying that if you’re paying a developer to design your site, you should insist that they make it responsive. If you want more information about this topic or tips about how to make it work for you, read our articles What Is Responsive Design? and Creating Websites For The Smartphone Generation.

Update, Update, Update

To stay competitive, your site has to look current. People are only becoming more attuned to (and judgemental about) the aesthetics of their technology. Older designs simply won’t cut it. You must update, and update frequently, to stay alive.

To be clear, we’re not just talking about upgrading from something like this…

If your site looks like that, you either went out of business in 1996, or you are using the design ironically. If it’s the former, and you’re now trying to get back into the game, good for you. Burn the site and start over. Burn it. If it’s the latter, you are invariably a hipster and I don’t want to talk to you or your handlebar mustache.

This is the horrible truth: your pages don’t have to be neon and underlined to look hopelessly dated.  Sites built as recently as 2012 now appear sad and outre. First impressions matter, and the average consumer will ditch your site without blinking an eye if it looks sketchy or old.

To stay in the game, you must update the design of your site every few years. Yes, it’s a pain. Yes, it will cost you time, money, or both. But what you gain in street cred will be worth every dime.

Updating actually isn’t so bad if you’re using a modern website building platform, like Wix (read our review) or Squarespace (read our review). New, intuitive site editors make it easy to switch layouts, change templates and forms, and alter color schemes — without paying an hourly rate to a spendy developer.

Provide Accurate & Complete Information

I know I spent a good part of the introduction talking about how business websites need to be more than just storehouses of basic information. That is 100% true, and I stand by every word. But…and this is a big but…it is vitally important to put basic information about your business on your website, front and center, or everything else in this article is pointless. Highlight your operating hours, address, phone number, and digital contact information, and put that information in more than one place. If your business occupies a physical space, your address and phone number should be above the fold. In other words, website visitors should not have to scroll down or navigate to another page to see this information.

You also need to give potential customers and new visitors at least a hint of what your company is all about on your home page. Don’t write a novel at this point. As you’ll see in the screenshot of Merchant Maverick’s home page below, a simple summary phrase — Unbiased Reviews That Save You Time And Money — is enough to convey the purpose of our site.

An “About Us” page is a great place to go more in-depth about exactly what your business does, and why you do it. It can also be a good vehicle to introduce yourself or your staff. Include mini-bios and pictures if you can. People are social animals. We’re evolutionarily wired for relationships, and that’s not going to change anytime soon. The exchange of goods and services is occurring less and less in the meatspace, but we still like to know who we’re dealing with.

Avoid Grammar Mistakes

You don’t have dig deep to realize that American public schools are sadly failing when it comes to even basic writing competency. Just log in to Twitter for 10 seconds and yOull sea that Im rite. (There’s a little editor humor for you.)

You can get away with shocking grammar in Tweets, texts, and even over email (alas). But your website is not the place to be slipshod and careless. Save that devil-may-care attitude for Facebook or Christmas cards, where only some of your acquaintance will be judging you. If your website is riddled with typos and syntax goofs, you will lose customers, period. Error-laden copy connotes one of two things to your client base: you are illiterate or you are lazy. Ponder this riddle: What’s more off-putting to a consumer — an uneducated merchant or an indifferent one? The answer, of course, is moot. Neither one is going to survive.

This may all seem terrifying if grammar isn’t exactly your thing. But don’t worry! There’s no need to hastily enroll in a community college course. Simply running your site through spellcheck should catch most spelling errors, though you’d be surprised how many merchants neglect to do so. For higher level syntax and grammar issues, try using a service like Grammarly. It’s not perfect for higher level writing, but it catches almost 100% of basic errors (there/they’re/their, etc.), and it’s free. You can also enlist help from friends and family. The more eyes on your website copy before you publish, the better.

Write Engaging Copy About Your Products/Services

It’s not enough for your content to be grammatically perfect. It must also be useful and interesting. And there’s the rub.

How does one write captivating copy? Especially if one is trying to sell items as unsexy as, say, lawnmower parts or plumbing services? The key is to know your audience. Your stuff doesn’t have to be Dostoevsky-good. It doesn’t even have to be Reader’s Digest-good. Excellent website copy is defined by only three characteristics:

  • Detail
  • Utility
  • Appeal

Let’s take them one by one.

Detail

Presumably, you understand your business and your products or services well. Take the time to describe them, providing as much or more of the minutia as is reasonably warranted. Color; size; shape; weight; feel; smell; taste. Go further into the aesthetic sensibility of your items if you want. The more your customer knows about the product or service, the more likely they are to be satisfied with their purchase.

Utility

The overall helpfulness of your copy will depend in part on how wisely you’ve used detail in your descriptions. But you must go even a step further. It’s not enough to state that a scarf is hand-knit, blue, and made of angora wool. It’s not even enough to say that it is 60-inches-long and machine-washable. For optimal impact, you’ve got to paint a word picture for your potential customers. Give suggestions about various ways to wear the scarf. Talk about occasions or events the scarf is appropriate for. If a customer can imagine your product as a useful part of their daily life, you’re far more likely to make the sale.

Appeal

This one’s not so straightforward. The line between interesting copy and content that is mind-meltingly dull is thinner than you’d expect. When in doubt, go back to the advice above: know your audience. If you’re hawking lawnmower parts, it’s best not to be cutesy or make attempts at humor. You’re likely to simply irritate people. For utilitarian products and services, appealing equals factual and descriptive. But if bespoke spa treatments or patchwork quilts are your daily bread, be as whimsical as you want. Go nuts. Employ first-person language. Break out the charm. And if you don’t feel up to the task, hire someone who is. There are plenty of freelancers out there who write website copy for a living. Sites like Upwork are teeming with writers who would fist-fight each other for the privilege of generating your web content. (I know because I used to be one of them.)

Use Original Images

On the internet, as in life, it often pays to be unique. And not in an after-school-special, every-snowflake-is-beautiful kind of way. Search engines like original content. They give preference to it, in fact.

That said, unless your name is Dorothea Lange or Ansel Adams, you’re much better off using BigStock or Getty Images for your graphic content than simply uploading pictures from your digital camera or smartphone. Unique isn’t always equivalent to good. My iPhone pictures, for example, are invariably blurry and too dark, invoking what I’m sure are merely pity-likes on Instagram. Yours may be better (and likely are), but I can say with near certainty that they aren’t good enough to be featured on your website.

Website-quality photographs and images should be:

  • High-resolution
  • Well-lit
  • Sharply focused
  • Artistically blocked, posed or designed
  • Minimally cluttered

Images like this don’t grow on trees. They come from professional photographers and graphic designers who use professional equipment. In other words, you’ll have to pay for them. Craigslist is a good place to find relatively cheap freelancers in your area, or you can solicit help from sites like Upwork and Guru.

Maintain A Blog

Blogs aren’t just for bloggers. Used wisely, a blog can be an excellent marketing tool for your retail, restaurant, or service business.

For starters (to reiterate my point in the section above), search engines give preference to original content. They gobble it up, in the manner of hungry hippos. To be clear, Google is an equal opportunity tool in that, if you have a URL, you’ll show up in an appropriate keyword search…eventually. But if you want to rank a little higher than the two-millionth results page, you’ll need to put it a bit more effort. Creating unique, high-quality content for your site increases your visibility to potential customers online. The key phrase here is high-quality, by the way. Search engines employ highly trained digital bloodhounds that can sniff out BS filler-content a mile away. You can try to cover redundant or pointless copy with metaphorical coffee grounds, but Google algorithms just keep getting smarter.

If you equate blogs solely with hot-button social issues like politics, the Mommy Wars, religion, and the like, it may be difficult to see how having one could benefit — or even apply to — your business. There are only so many edgy articles you can write about lawnmower parts.

Blogs don’t have to be hilarious rants or incisive social commentaries. In fact, if you want them to work well for your site, you should avoid controversy and/or high-art altogether. Instead, think about what kinds of things your customers are interested in, and provide content that caters to those interests. Do you sell custom clothing? Write a few how-to posts about accessorizing or blog about fashion trends. Run a pet shop? Talk about what pet owners can do to keep their dogs healthy. Rank cat toys from worst to most purrr-fect. Cat owners in your area who search for toy ideas may just stumble on your article and become loyal customers. Blogs exist to provide helpful information for your current clients, but they serve to draw in new customers as well.

Here are some articles types that work well for business blogs:

  • Top 10 Lists
  • How-To Articles
  • Dos & Don’ts
  • Product Comparisons
  • Guides
  • Best Of/Worst Of Lists
  • Industry News
  • Trends & Fads
  • Interviews

If you don’t feel up to creating the content yourself, hire someone who is.

Final Thoughts

In our increasingly digital society, your website is the most visible face of your business. It behooves you to make that face as clean and attractive as possible. The good news is that it doesn’t take much to create a professional, effective site.

Consider the tips above and take action where you can. With just a little TLC (and a little cash), your website can go from bland and forgettable to sleek and profitable.

Further Reading

We’ve talked about seven ways that you can create a better website for your business. Here are some other resources to help you get started.

Starting From Scratch?

Check out our large selection of do-it-yourself website builder reviews or compare top website building software vendors. If your website needs to incorporate an online store, you’ll want to peruse our eCommerce software reviews and compare some of the top shopping carts.

Read these articles if you need help deciding on a platform:

Looking To Improve Your Current Site?

If you already have a site, but need some tips on how to take it to the next level, these articles should help:

Want Tips On eCommerce?

We’ve written a comprehensive ebook on starting an online store. It’s free and well worth a read. If you’re operating an online store already or are thinking about adding one to your website, check out these articles:

Need Help With Social Media For Your Business Website?

Social media is a huge part of good business marketing, and it’s helpful to integrate your social media channels with your website. Check out these articles for more information:

Julie Titterington

Julie Titterington is a writer, editor, and native Oregonian who lives in the beautiful Willamette Valley with her husband and two small children. When she’s not writing or testing software, she spends her time reading early 20th century mystery novels, staring blankly at her iPhone, and attempting to keep her kids fed, clothed, and relatively uninjured.

Julie Titterington

Julie Titterington

“”

13 New Year’s Resolutions For Your Business

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Why Small Businesses Need New Year's Resolutions

The beginning of a new year is a good time to think about what has passed and what is to come, but this time shouldn’t be limited to personal reflection alone.

As a small business owner, give yourself an opportunity to reflect on your business and its finances. What worked last year? What didn’t work and why? Where do you want to be a year, two years, five years from now? What will it take to get there?

Once you’ve spent some time reflecting, start creating new goals to strive for. There’s no better time to reevaluate your business strategy or implement new financial processes than at the start of the new year. Build on what you learned in 2017 and make 2018 even better by creating financial and business resolutions.

Table of Contents

Business Resolutions To Consider

Here are some possible financial resolution ideas to help get you thinking about how to make this year a success for your business…

Create A Budget & Stick To It

This could be the year to create, implement, and stick to a reasonable budget. Most accounting software programs make it easy to create yearly budgets, and some even allow you to use last year’s data as inspiration.

Increase Sales

Who doesn’t want to increase sales? Begin by considering practical ways to make this happen, like creating specific motivations for your sales staff or expanding your clientele. Use your existing accounting software to drill into your sales records and analyze the trends in your business. What sells well? What type of customers buy your products? Leverage this data to make informed decisions going forward.

Go On An Expense Diet

It might be time to cut back on the expenses. Use your existing accounting software and purchases records to pinpoint unnecessary spending. Find ways to automate processes so you can save time on projects and avoid paying excess wages. When it comes to the overall profitability of your business, this is one diet that isn’t so hard to stick with.

Reinvest Money In Your Business

Did your business make a decent profit in 2017? This year, make it a point to reinvest in your company. Increase your company’s assets, or buy those new computers everyone has been needing to boost productivity. Incentivize your employees to stay by providing more benefits or increasing wages. The more you invest, the more return you’ll see.

Try A New Marketing Strategy

Marketing is always changing and adapting. The New Year is a great time to evaluate your current marketing strategy to see what’s paid off and what hasn’t. Continue practicing the strategies that work, dump the ones that don’t, and don’t be afraid to experiment with some new strategies during 2018.

Pay All Bills On Time

A New Year’s Resolution doesn’t have to be grand and impressive. Your resolution could be as simple as paying your bills on time. If you struggled to get all of your bills paid on time in 2017, make it a priority to stay on top of that this year. Use your accounting software to set reminders and automate your billing if needed.

Stay On Top Of Invoicing

It’s easy to get backed up on invoicing. But when invoices are your company’s bread and butter, it’s important to follow through. Fortunately, almost all accounting software allows you to set up invoicing automations and automatic late-payment reminders. QuickBooks Online even has an invoice scheduling feature when you can schedule invoices to be sent at a later date.

Keep Better Tax Records

If tax time is looming large for you right now, a good New Year’s Resolution would be to keep better tax records for next year. Use your accounting software to keep financial records and check out what tax support your accounting software offers.

Switch Accounting Software

There’s no better time to switch accounting software than at the beginning of a New Year. If your software isn’t cutting it, maybe this year should be about finding a program that actually works for your business. Check out our accounting software comparison chart and read our comprehensive accounting software reviews to see which software is right for you. If you need extra help, read our Complete Guide to Choosing Online Accounting Software.

Update Existing Accounting Software

Even if you don’t want to switch to a new accounting software program, it might be time for an upgrade. This could definitely be the case if you use an old locally-installed program. Read 5 Signs It’s Time to Update Your Accounting Software and start your new year right with the best-performing accounting software.

Add A New Software Integration

Integrations are a great way of adding extra features to your accounting software. Integrations can cover everything from project management to time tracking, email marketing, analytics, scheduling, and much more.

Reconcile Your Bank Accounts Every Month

Were you overwhelmed last year when closing your books? Make things easier on yourself by striving to reconcile your bank accounts each month. Not only will this help you to be less stressed, it will help you to be more proactive with your business’s finances.

Automate Your Business Processes

Perhaps, when looking back on last year, you realized how many day-to-day business processes could be streamlined. This year, choose to automate your business as much as you can. Use your accounting software to automate invoicing and billing. Or take advantage of software integrations like MailChimp to automate your email marketing.

Make Resolutions A Reality

We all know how resolutions go. You are oh-so committed at the beginning of the year, but come March, the diets have been forsaken, the gym memberships are wasted, and nothing is accomplished like you thought it would be. But this doesn’t have to be the case.

There are several tricks you can employ to make your financial resolutions last.

First of all, break the resolution up into smaller, manageable tasks. Resolutions often involve worthy but intangible ideas. Take ‘increasing sales,’ for example. This is a great idea, but how do you achieve it? Break it into achievable components. You could start by running a sales rep competition for the most sales, breaking out a new social media marketing strategy, or implementing a loyalty program to encourage buyers to come back.

Second of all, don’t go at it alone. Bring your whole team in on your business resolutions. Let them know what your goals are for the year so you can all work together to achieve them — and hold each other accountable. Your team may even have a few ideas of their own.

Now that you have a few potential financial resolutions for your business, run with them or come up with new ideas all your own. Whatever you do, don’t let this precious time of reflection and new beginnings go to waste. Seize the opportunity to regroup and create new business goals for yourself and your team. 2018 is yours for the taking!

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

10 Tips For Building A Winning Patreon Campaign

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patreon success

It used to be that if you wanted to try crowdfunding as a means of monetizing your physical and/or creative output, you had to set up a campaign on a site like Kickstarter (see our review) or Indiegogo (see our review). That’s all fine and good — after all, these sites have raised billions in funding for creative business ventures of all kinds. But what if you want to crowdfund on a continuing basis and have your fans support you with monthly (or per creation) payments? Platforms like Kickstarter aren’t set up to facilitate that — not until Drip becomes open to all, at least.

Enter Patreon (see our review). Patreon enables you to draw an ongoing income from The Crowd by soliciting donations from patrons on either a per-month or per-creation basis. It’s an ideal crowdfunding model for podcasters, YouTubers, musicians, journalists, artists, and anyone else who creates content on a regular basis and would like to be compensated for it.

Just remember: Crowdfunding isn’t Field Of Dreams, and you’re not Kevin Costner. If you build it, they won’t necessarily come. You have to go in with the mindset that building up your Patreon is a job and your patrons are customers who will require content of value in return for their investment. Rewards crowdfunding isn’t charity — it’s business, albeit with a strong human element.

Here’s what you need to do to ensure you have the best possible chance at Patreon success.

(If you are, in fact, Kevin Costner, I apologize.)

Table of Contents

1. Have An Existing Fan Base

Some people may see popular Patreon creators who pull in several thousand dollars a month and come away thinking that Patreon built their fan base. This line of thinking gets it backward. Patreon is just a platform for your work — it’s not going to generate interest in what you do if the interest isn’t there in the first place!

A successful Patreon campaign requires that you have a base of potential patrons — not necessarily a huge base, but one that exists — who are already inclined to support you financially in exchange for access to your content. In reality, the path to being a winning Patreon creator starts long before you sign up with Patreon. Typically, people don’t browse randomly through Patreon creator pages looking for unknown creators to support. They seek out the campaigns of creators they already know and appreciate.

Before you start with Patreon, acquire a following of people who are willing to drop at least a dollar or two per month on your content. Otherwise, you’ll just be wasting your time.

2. Post A Video. Be Concise!

Building a personal connection with your followers is key in inducing them to open their wallets for you. There’s no more direct and efficient way to bolster this connection than with a killer video.

Don’t use your video to appeal to the consciences of your fans and plead for support on moral/charitable grounds. Regardless of the merits of such a case, it just doesn’t work. Approach your introductory video as if you were making an elevator pitch to investors because essentially, that is what you’re doing.

Appear personally in your video. Be passionate and sincere. Make sure to explain how the rewards system works and what patrons will receive at different tiers of support — some of your followers likely don’t know how Patreon works. Also, don’t post a video longer than three minutes (or so). People’s attention spans aren’t getting any longer.

gamer chair GIF

Nobody’s going to expect to see a video with Hollywood-level production values. Just be direct, sincere, and explain exactly what patrons will get in exchange for their support.

3. Examine Other Patreon Campaigns

If you’re trying to raise money by applying for a bank loan, you don’t get to study the loan applications of other applicants to see what works and what doesn’t. Crowdfunding platforms, however, are much more transparent. With Patreon, you can check out every active campaign on the site, along with the number of patrons each has acquired. And while creators don’t have to make their monthly (or per-creation) earnings public, about half of them do.

This is tremendously valuable information! Before you launch, do your homework and study the Patreon campaigns of other creators in your field. Take note of what characteristics successful campaigns have in common, along with the commonalities between campaigns that generate less interest.

This campaign data is too valuable to go unexamined. Take advantage of it!

4. Set Goals

With Patreon, you don’t have to set funding goals, but I highly recommend it. When you set a goal, you’re telling your patrons that you’ll be able to complete a certain project or make some campaign-related purchase once you’ve hit a certain level of funding. It’s both a way to demonstrate that you aspire to grow your operations and a way to inspire more patronage by letting people know what they stand to gain should your goals be met.

You can set as many goals as you like, but stick with a few at a time so as to not inundate people with information. Once you reach a goal, consider setting a new one so you’ll always have a few goals laid out in front of you. These goals can serve as inspiration for both you and your patrons.

5. Create Several Reward Tiers

In general, it’s a good idea to offer some kind of reward to patrons at the $1-$2 subscription level to appeal to the broadest possible swath of the populace. Many people divide their support among numerous Patreon creators at $1-$2 per month/creation, and you’ll want to appeal to this type of subscriber. However, you also want to set higher reward tiers for the bigger spenders, because a certain percentage of your supporters — and it can be a small percentage — will likely jump at the chance.

Patreon has posted data indicating that as your number of reward levels increases, so too does the chance that you’ll process at least $100 in your first month.

The key is to offer your potential patrons several options for supporting you in exchange for rewards so as to appeal to both the big spenders and the small spenders. Offer a lil’ something for everybody.

6. Promote Your Patreon On Social Media

If you have a social media presence and you’re not using it to promote your Patreon, you’re doing it wrong. People who know you and are familiar with what you do are more likely to support you. This goes back to my first point regarding tapping your existing followers for support.

You might be a bit squeamish about annoying your social media followers with requests for crowdfunding support. Do it anyway! Otherwise, you’re effectively leaving money on the table. Plus, if your campaign is unique or unusual enough, it might just go viral, thus getting you all the more attention — and more attention leads to more patron moolah!

7. Be Mindful Of Shipping Costs When Offering Rewards

It’s great to offer cool rewards, but if you’re not careful about who you’re offering physical rewards to, you could end up blowing your budget on shipping costs. This is particularly true if you have lots of overseas backers.

hovering stop motion GIF by Reuben Armstrong

Make sure that the rewards you offer at lower levels of support are either digital in nature or are the sort of thing that can be sent in a simple envelope. If you’re sending packages overseas to people who support you at $5/month, you may well find yourself in deep doo-doo.

8. Create Continuously

This one may be a bit obvious, but it’s true — particularly if your Patreon campaign offers per-month subscriptions. If your content releases are few and far between, patrons are going to realize they’re not getting much bang for their buck.

If you’re focused on offering major works a few times a year, platforms like Kickstarter and Indiegogo are probably better suited to you. Patreon’s crowdfunding model requires that you continuously release bits of content on a regular basis. If you’re building up to publishing a novel or something along those lines, you can always launch a Kickstarter/Indiegogo campaign and run it alongside your Patreon campaign.

9. Keep Creating Things For Non-Patrons

If you’re earning Patreon money for your work, that’s great. Just don’t make all your content exclusive to patrons. You want to continue to grow your casual audience and spread awareness of your work in order to expand the pool of people inclined to become a patron of yours in the future, and you can’t do that if you put everything behind the paywall.

Freebies make for good patron-bait. Give people just enough to leave them wanting more.

10. Send Patrons Personalized Messages (Particularly When Starting Out)

It always helps your cause to make your patrons feel loved and wanted, and while it may not be possible to send personalized thank-you messages to your every patron once you’ve hit it big, it’s definitely worth doing when you’re starting out. Patrons may feel like they’re taking a chance on you in your early days, so why not go the extra mile to thank them for having faith in you?

Show patrons some extra TLC when you’re starting out, and they’ll be more likely to stick with you. It’s just common sense.

Final Thoughts

It would be nice if good content sold itself. Unfortunately, with Patreon, just as in meatspace, this just isn’t how things work. You’ve got to be methodical and strategic when devising your Patreon campaign if you want to draw significant funding. Most people don’t have the disposable income to support every creator they like just out of the goodness of their hearts. You have to make your patrons feel emotionally invested in your success while simultaneously offering them tangible benefits in exchange for their patronage.

Remember, your followers don’t owe you anything. They’re struggling too! However, if you can enrich their lives with engaging content while making them feel as though they have a stake in your success, your Patreon campaign can be a winning proposition for everybody.

Jason Vissers

Jason Vissers is a writer, cereal chef and Netflix aficionado from San Diego. A native Californian who enjoys the beach, Jason nonetheless prefers to do his surfing on the World Wide Web, the raddest wave of them all. Jason can’t eat raisins.

Jason Vissers

“”

The Debate Over Patreon’s New Fee Policy: Who Benefits, And Who Doesn’t?

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patreon fees

When Patreon (see our review) announced a change in their fee structure, they touted it as a way to ensure that creators were paid a greater portion of what is pledged to them. However, many in the global creative community immediately perceived it as a threat to the viability — and thus the livelihood — of smaller creators on the site. What are the motives behind this change, and what will be its effect?

Table of Contents

The Change: Payment Processing Fees Will Now Be Assessed To Patrons

The simple way to summarize the change is to say that the payment processing fees charged in the transfer of funds from patron to creator will now be charged to the patron (rather than to the creator, as was the case in the past). But this broad explanation glosses over the specifics of how patrons will be charged, and it’s these specifics which lie at the heart of the issue.

Prior to December 18, 2017 — the day the new fee regime takes effect — Patreon’s policy was to charge the content creator for the cost of payment processing, deducting the amount from the earnings, which were bundled together and paid out once per month. This amount would vary, both month-to-month and creator-to-creator, because it depended on the number and amount of the individual pledges you received from your patrons, not the sum total of your patrons’ contributions.

As of the 18th, this all changes. Creators won’t be charged a fee for payment processing, and will instead pay only the 5% platform fee Patreon has always charged. Patrons will now be charged a 2.9% + $0.35 fee on each individual pledge they make to a Patreon campaign.

To those not involved in crowdfunding, the significance of this change may not be immediately apparent, and, in fact, it was initially presented by Patreon as an unalloyed good. According to the company’s much-criticised first statement, the change was made because it “allows Patreon creators to take home exactly 95% of every pledge, with no additional fees.”

However, here’s the thing. To charge a 2.9% + $0.35 fee to a patron’s every individual pledge adds a significant burden to patrons, most especially those who contribute a small amount — often $1 — to several different creators.

Seriously, though, it’s a big hit to small contributions! You might see the 2.9%, or even the $0.35, and think “well, that doesn’t sound like a big deal.” But the truly significant part is that this fee is charged to your every individual pledge and not assessed to your total monthly donation. This means every $1 pledge you make to a creator — whether monthly or per creation — will cost you $1.38. That’s a 38% fee you’re now paying on your donation, which sounds a lot worse than “2.9% + $0.35.” So if you contribute to, say, 20 different Patreons at $1/month each, you’ll now be paying $27.60 instead of $20.

This issue is especially acute if you run a per-creation Patreon. According to their FAQ explaining the changes, Patreon states the following:

As a per-post creator, your patrons will see the 2.9% + $0.35 service fee added to all paid posts. For example, if you are a per post creator making two paid posts per month, your patrons will be charged 2.9% + $0.35 for each paid post.

This means your $1-per-post patron will be paying $2.76 over the month for $2 worth of content, and not the $2.41 that would be assessed if the patron’s per-creation charges were bundled by month and then had the fee assessed. This disparity gets more pronounced the more prolific the per-post creator.

For the patron, it’s the aggregation of the per-pledge fees that is so insidious. This is particularly the case if you divide your giving into small amounts sent to many different creators, and less so if you give larger amounts to fewer creators.

The Criticism

Backlash was swift and unforgiving, ricocheting remorselessly down the weary corridors of social media. Many creators recognized this change as a massive new disincentive for patrons to spread their wealth, in the form of small pledges, among many different campaigners, with the new payment regime incentivizing patrons to concentrate their giving to fewer creators. The primary beneficiary of this change, according to many, is Patreon itself, not the majority of creators (and certainly not patrons). Crystallizing this view, a recent VentureBeat article quotes indie developer George Buckenham as describing the change like so:

This especially disincentivizes people pledging single dollars per month to multiple creators, which I assume they factored in and are happy with, in favour of people backing fewer projects for larger amounts of money.

The effects of the change are already being felt. Many Patreon creators tweeted screenshots of the canceled pledges they had already experienced, often accompanied by patrons giving the new fee structure as their reason for cutting back. Artist Blue Delliquanti noted in just such a tweet that they had already lost the equivalent of the cost of their dental insurance.

Artist/writer Josh Fruhlinger responded to the change by offering his $2-level patrons the chance to resubscribe at $1.60 per month for a unique reward to induce them to stay while paying roughly the same $2 monthly rate. Again, Patreon made this change ostensibly to benefit creators, yet now we see creators effectively cutting their own take just to keep their patrons from fleeing.

Yet another oft-heard complaint was that this change would be especially hard on non-US creators and patrons, considering the extra costs per transaction already incurred with the currency exchange, VAT, etc.

The Response

After the first wave of reaction, Patreon issued a further explanation of their new fee system through their payments product manager. The statement is an emphatic denial that the move is profit-motivated — “This was never (and still isn’t) about making more money for Patreon as a company.” Instead, they link the change to a change in the way patrons are going to be billed in the future. The explanation is complex, and I had to read through it a few times before I really understood it, but it boils down to the fact that Patreon wants to offer all creators the ability to get paid up-front when patrons subscribe to their content. This option has often been requested by creators who have to deal with the possibility of patrons signing up for their content and then canceling before the first payment is made.

However, when they let certain creators use a “monthly-with-charge-up-front” charging method, patrons were miffed. Because a patron’s monthly subscriptions are bundled and paid on the first of the month, a patron who signs up to support a creator with charge-up-front enabled on November 29th is charged a full month’s fee immediately, and then again on December 1st for the next month’s content. To prevent patrons from being effectively double-charged like this, Patreon wants to change the payment system to one in which each patron’s monthly subscription is paid on the monthly anniversary of the date on which they signed up with the creator in question.

But if they do this without changing the way payment processing fees are charged, according to Patreon, the cost of these fees will shoot up for creators and take a bigger cut of their monthly takes, because their patron’s payments will be spaced out over the month and not bundled and paid on the first of the month as before. They therefore justify the new fee system as a way to prevent this scenario from happening. They also added the fact that this new 2.9% + $0.35 was the lowest of the fee amounts they had experimented with during testing. “Be grateful we’re not making it even worse!” they seem to be saying.

As you can imagine, this response was not universally accepted.

Reaction To The Response

Many in the creative community, like author Natalie Luhrs, did not accept that soaking small donations with such a steep fee increase was the only way to make charge-up-front charging work. Several people pointed to another aspect of Patreon’s new billing practices which wasn’t addressed by the company in their “here’s why we did this” response but is mentioned in the FAQ page they put up to detail the changes. As things stand now, creators who are patrons of other creators can pay said creators out of their Patreon balance to avoid subjecting the funds in their balances to a second round of fees. However, according to Patreon,

We will likely be changing the way creator to creator payments happen in the future so that you will no longer be able to use your Patreon balance. One reason is that it causes many edge cases that add complexity to our payments system as work to roll out charge upfront over the course of 2018.

Of course, in smoothing out these “edge cases,” Patreon will just happen to collect more in fees as a result.

The Motivation And The Effect

Naturally, opinions differ on Patreon’s true motivation for enacting these fee changes. Natalie Luhrs pointed to this article, from June 2017, in which a Patreon employee explicitly states that “financially successful Creators” are more valuable to the company than creators who earn less money (“We’d rather have our GMV [gross merchandise volume] be made up of fewer, but truly life-changed creators rather than a lot of creators making a few dollars.” is a rather telling quote.). Luhrs claims this is evidence that Patreon is intentionally trying to prioritize big earners over small-time earners on the platform. If this is the case, there is no small irony in the fact that Patreon’s highest-earning project — and therefore its most “financially successful” — is a socialist podcast that has come out swinging against the new fee policy.

Others point to different possible motivations. Developer Jason Yu theorized that the real reason behind the change was not Patreon’s desire to effectively gentrify the ranks of its creators but to minimize costly instances of patrons getting confused and disputing charges that they made because they didn’t realize they were being aggregated by Patreon — the example given was a patron who makes 20 $1 monthly contributions and disputes a $20 charge from Patreon because they don’t recognize it. (Jason nonetheless concludes that “Unfortunately for Patreon, they may find that this change only shifts payment fraud to other channels while angering their creators and patrons in the process.”)

The fact is that we don’t have access to Patreon’s internal deliberations, so it may not be possible to pinpoint Patreon’s exact motivations for making this move. However, we don’t need to know the motivations behind the move to objectively assess its effects. It’s clear that the fee changes, as proposed, will make the act of contributing small amounts of money to many different Patreon campaigns much more expensive in percentage terms. These new fees, at 2.9% + $0.35 per individual pledge, plainly incentivize patrons to concentrate their Patreon spending on fewer creators in order to cut down on the number of times they’ll be forced to pass these new virtual toll booths. This can only have the effect of shifting patron spending up the ladder, benefitting larger creators at the expense of the smaller ones. Chalk up a rare win for the beleaguered 1%!

Final Thoughts

Don’t hold me to this, but I suspect Patreon will survive the current controversy. The most popular creators will see a net increase in the amount of revenue they take in, as they’ll be able to count on getting 95% of what is pledged to them. Patreon will continue to grow, and they will point to this growth to retrospectively justify this month’s change in their fee policy. But the numbers won’t tell the whole story. Creators will be left having to hope that their increased cut will be enough to cover the losses incurred from other patrons dropping or reducing their support. On this count, the big, established creators are obviously better positioned than the small-time creators.

Wasn’t the original intent of rewards crowdfunding to give a leg up to these very same small-time creators? To help them get the recognition they deserve in a world increasingly dominated by those who can leverage their existing advantages for their enduring benefit? Patreon might see increased aggregate growth from this move, but at what cost to those who Patreon might not define as “financially successful Creators” who have been “truly life-changed” but who rely on the platform to earn a few extra bucks to help make ends meet?

We know that when questions of this nature are ignored, the result is a society ever more aggressively stratified by wealth and power, so perhaps it’s high time these issues were given the consideration they urgently require.

Jason Vissers

Jason Vissers is a writer, cereal chef and Netflix aficionado from San Diego. A native Californian who enjoys the beach, Jason nonetheless prefers to do his surfing on the World Wide Web, the raddest wave of them all. Jason can’t eat raisins.

Jason Vissers

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