How To Start A Lawn Care Business

Can you picture making a profit by keeping the lawns of homes and businesses in your area looking their best? You’re not alone. For many aspiring entrepreneurs, starting a lawn care business sounds like a practical and achievable way to make money and be their own boss — a dream come true, in other words. If you’re reading this, you’re ready to take the next step toward making that dream a reality.

Starting a lawn care business seems easy. Just grab up some lawn equipment, find a couple of guys willing to do physical labor, and get started, right? Not exactly.

Like any other small business, building a successful lawn care business takes careful planning and hard work. You have to be willing to put in the time, effort, and money required to start and grow your business. A lawn care business may have low overhead and lower initial risk than other types of businesses, but it isn’t a cake walk. However, over time, you’ll begin to see the fruits of your labor through the beautiful lawns in your city or town and the profits sitting in your bank account.

In this guide, we’ll break down the steps for starting your own lawn care business. We’ll start off with the importance of your business plan and what it should include. We’ll go over what you need to get started — and it’s more than just lawn equipment. We’ll talk about the costs you’ll encounter and how to get the financing to cover those costs. We’ll also discuss ways to bring in customers … and profits.

Let’s get started!

Create A Business Plan

Every business is different, but all businesses need one thing to be successful: a business plan. Your future lawn care business is no exception. Even if your business concept seems simple, having a solid business plan in place is a necessity.

Think of your business plan as a roadmap of your business. You wouldn’t go on a long trip without a map or GPS, or put together a complicated piece of furniture without instructions, right? View your business in the same light.

Your business plan outlines your goals for the future. In other words, how will you get from where you are now — a startup business — to your goal? Every entrepreneur has a different goal. Maybe yours is to make $1 million in revenue within five years. Maybe it’s to expand throughout your state. Maybe you want to build a franchise that will go nationwide. No matter what your goals are, they need to be outlined in a solid business plan.

All business plans are different, but there are a few key sections that should be included in all plans. Those include:

  • Executive Summary: A short summary of your business plan and the value proposition of your business
  • Business Description: What does your business do? Include your mission statement and when your business was formed.
  • Organization: Who are your team members and what do they do within the organization?
  • Market Analysis: Include information about the market and your competition
  • Marketing Strategies: How do you plan to market your business to draw in customers and bring in profits?
  • Financial Projections: Use revenue growth and market trends to project the financial outlook of your business

Not only is your business plan critical to the growth of your company, but it’s also an absolute necessity if you plan to seek funding from outside sources — such as investors or banks — in the future.

Determine What Equipment You Need

Selecting equipment

To operate a lawn care business, you need to have the right tools and equipment for the job. While you may start off small and add to your inventory as your business grows, there are a few critical pieces of equipment you need to get started. For most lawn care businesses, major equipment includes:

  • Riding Lawnmower
  • Push Lawnmower
  • Edger
  • Hedge Trimmer
  • Leaf Blower
  • Truck
  • Equipment Trailer

For your business, you’ll also need equipment that’s less expensive but just as critical to operations. This includes:

  • Lawn Tools
  • Hand Tools
  • Lawn Bags
  • Eye/Ear Protection
  • Gloves
  • Gas Cans
  • Oil
  • Garden Hoses

You should expect to spend approximately $30,000 to $40,000 for the equipment you need to start your business. As your business grows, of course, you’ll need additional capital for the purchase of more equipment. For example, you may have just one truck, trailer, and mower for now, but if you have additional crews taking on jobs all over the area, you’ll need more equipment.

You may even opt to offer additional services — installing sod, laying mulch, or planting flowers — all of which require additional equipment and supplies. For now, however, focus on the equipment listed above. Those items will be most critical to getting your business off the ground.

Calculate Startup Costs

With an idea of the type of equipment you need to launch your business, you can now begin calculating startup costs. This will include the cost of your equipment, plus other necessary expenses to keep your business operating smoothly.

Your equipment will make up the bulk of your costs, and you should budget approximately $30,000 to $40,000 for these purchases. You may be able to get started with a smaller investment by purchasing used equipment. However, purchasing used does come with its risks. Older trucks can break down and previously-owned lawn equipment may immediately require servicing or repairs. While you can save money in the short term by buying used equipment, you may rack up additional expenses over the long term, so consider your purchases carefully.

When purchasing your equipment, shop around. Look online and visit local retailers to get estimates of costs. Determine what equipment you really need now and what you could add as your business grows. You may even consider starting with basic equipment (do you actually need that fully-loaded riding mower right this minute?) and upgrading your equipment when your business starts bringing in revenue.

Beyond the equipment we’ve already discussed, you’ll need additional supplies for your business. This may include chemical weed killers, pesticides, fertilizer, and other supplies. You may purchase these supplies upfront, or you may purchase them when needed. If you plan to keep inventory, you may incur additional costs if you rent storage for your supplies and equipment.

Another big startup cost to consider is the cost of insurance. You will need to have auto insurance on your truck. You will also be required to carry liability insurance. If you hire employees now, additional costs may include workman’s comp insurance and payroll taxes. Other startup costs include fees for permits and licenses. We’ll discuss obtaining licenses and permits a little more in the next section.

If you’re starting small as a one-person operation, your primary startup costs will be your equipment, supplies, insurance, and marketing costs. Just remember to take your time to do your research, plan, and budget to keep startup costs under control.

Register Your Business

Before you begin operating, you’ll need to register your business. There are several steps required to register a new business:

Choose & Register Your Business Name

While you may choose to operate your business under your own name, most small business owners choose a trade name. This name will need to be registered in the state where you will operate.

When choosing your name, you want to select one that is a reflection of your brand. You will also need to make sure that you select a name that is not registered by someone else in your state. You can find your state’s registration database with a quick online search.

Choose Your Legal Structure

One of the first steps in setting up your business is determining your legal structure. Your legal structure determines how much you pay in taxes and your personal liability for your business. Legal structures include:

  • Sole Proprietorship: This gives you full control over your business. You do not have to register this type of entity, so you skip over all the paperwork. However, this structure does not separate your personal assets and liabilities from those of your business. This means that you can be held personally liable for all debts and obligations of your business.
  • Partnership: This structure is the simplest structure for businesses that have two or more owners. A limited partnership (LP) gives one partner unlimited liability, while other owners have limited liability and limited control over the company. A limited liability partnership (LLP) gives limited liability to all owners, protecting each against the debts of the business and the actions of other partners.
  • Limited Liability Company: A limited liability company (LLC) protects you from personal liability from business debts and obligations. For example, your house, vehicle, or savings accounts will be untouchable if your business faces a lawsuit or files for bankruptcy.
  • Corporation: Corporations pay higher taxes and are more expensive to form. However, corporations can also raise money through the sale of stock. This structure is best for businesses that need to raise high amounts of capital or want to go public in the future.

Most lawn care business owners will register as a sole proprietorship or LLC, but consider the number of owners you have, protecting yourself from personal liability, and the future goals of your business before you make your decision.

Register With The IRS & State Revenue Agency

If you plan to have employees now or in the future, you will need to register for an Employer Identification Number. You’ll also request estimated tax vouchers from both the IRS and your state revenue office to file with your quarterly tax payments.

Obtain Licenses & Permits

The licenses and permits that you need for your business are based upon the laws of your municipality and what your business will do. For example, simply mowing lawns only requires a standard business license in most areas. However, if you plan to spray chemical herbicides, an additional license may be required. You can find out more about license and permit requirements by contacting your state’s Department of Commerce.

Seek Funding

We’ve already discussed the potential expenses you’ll encounter when opening your own lawn care business. Now, the big question is: how do you pay for it all? Like most aspiring entrepreneurs, your personal bank account likely isn’t bursting at the seams with more money than you know what to do with.

If you’re scratching your head trying to figure out finances, you’re certainly not alone. Most small business owners don’t have the funds needed to start and operate a new business. This is where small business funding plays a role.
There are more lenders than ever that are ready to give you the money you need to get your business off the ground. The trick is knowing what type of funding is best for your business and exactly where to find it.

Personal Savings

If you’ve socked away money in personal savings through the years, this money could be used to fund your new business venture. The best thing about using your own money is that you aren’t indebted to anyone. You don’t have to worry about loan payments, fees, and high interest rates. On the downside, if your business fails, it takes your savings with it.

Friends & Family

If you have a friend, family member, or colleague with money to invest, consider pitching your idea to them. Present them with your business plan and give a presentation just as you would give to a banker or other lender.

There are a few ways you can go about getting capital from someone you know. The first is a loan. Agree to rates, terms, and the borrowing amount and get it all in writing. Then, you’ll repay the borrowed funds plus interest over a set period of time, just as you would any other loan.

Another option is equity financing. You’d receive capital for your business and in exchange, your investor would own part of your company. You wouldn’t pay back the money immediately like you would a loan, but the investor would be able to take a share of your profits at a later time. Learn more about debt financing vs. equity financing.

No matter which way you go, keep everything professional and make sure everything is in writing. One thing that can sour a good relationship fast is a business deal gone bad.

Personal Loans

As a new business owner, walking into your bank to get a business loan is pretty tough … if not impossible. Banks look at your business and personal credit score, annual revenues, and your time in business. These lenders want to work with small businesses that are established and have the lowest risk. If you’re new to the game, many lenders won’t give you a second look.

This doesn’t mean that you’re only stuck with high-interest, short-term loan options. If you want a long-term loan with low rates, consider a personal loan for business. With these loans, you can qualify based on your personal income and credit score – no business information required.

You can apply for a personal loan for business through your bank, credit union, or an online lender. The most creditworthy borrowers will qualify for the best rates and terms and highest borrowing limits. A personal loan for business is a great option for larger purchases that you’d like to pay off over a longer period of time, like expensive equipment.

Recommended Option: Upstart

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Through Upstart, you can receive a personal loan of $1,000 up to $50,000 to use for your startup costs. APRs range from 8.09% to 35.99%. Your loan will be repaid over a period of 3 to 5 years.

Upstart is different from other lenders in that they look at more than just your credit score. While the lender does consider your credit score, education, years of credit, and job history are also factors used to determine if you qualify for a personal loan.

To qualify for an Upstart loan, you must:

  • Have a personal credit score of at least 620
  • Live in a state serviced by the lender
  • Have a regular source of income
  • Have a bank account 

Equipment Financing

Equipment financing is a type of funding used to purchase equipment. Instead of paying the full cost of your equipment up front, you’ll make a smaller down payment. A lender will cover the rest of the cost, which you’ll pay back over time along with fees and interest.

There are two different types of equipment financing: equipment loans and equipment leases. If you take out an equipment loan, you’ll typically pay 10% to 20% of the total purchase price as a down payment. Borrowers with high credit scores may qualify for 0% down financing. Once the down payment is paid and the loan is in place, you’ll be able to immediately take possession of your equipment. You’ll pay for the total purchase price of the equipment plus interest over a set period of time — typically around 5 years. Once you’ve made all payments as agreed, the equipment is yours to keep, trade in, or sell.

An equipment lease is more like renting. You’ll pay a down payment and take immediate possession of the equipment. You’ll make payments to your lender over a shorter period of time, usually 2 years. Once your lease period ends, you’ll return the equipment and sign another lease for newer equipment. Some lenders may allow you to pay off your balance if you want to keep the equipment you’ve been using.

Learn more about equipment loans and leases and which is right for you.

One of the best things about equipment financing is that you don’t have to put up collateral to secure your loan. Instead, the equipment itself serves as the collateral and can be repossessed if you default on your loan or lease.

With equipment financing, you can purchase any type of equipment you need for your business, including lawnmowers, edgers, trimmers, or even a commercial vehicle.

Recommended Option: Lendio

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Lendio is a loan aggregator that connects you with multiple lenders with just one application. Through Lendio, you can apply for equipment financing from $5,000 to $5 million with repayment terms of 1 to 5 years. Interest rates start at 7.5%.

To qualify for equipment financing, you must meet the following requirements:

  • Annual revenue of at least $50,000
  • Personal credit score of 650 or higher
  • Time in business of at least 12 months

If your credit score falls below the 650 minimum, you may be able to qualify with proof of solid cash flow and revenue for the last 3 to 6 months.

Even if you don’t meet these requirements, you could still qualify with certain lenders. Simply fill out Lendio’s free application or contact a personal funding manager. If you don’t qualify for equipment financing or have other financial needs, you can also apply for Small Business Administration loans, short-term loans, startup loans, and Lendio’s other financial products.

Lines Of Credit

If you want a flexible form of financing, a line of credit might be right up your alley. You’ll be able to initiate draws from your line of credit, and the lender sends the funds immediately to your bank account. You can make one or more draws from your line of credit up to and including your set credit limit.

Since a line of credit is revolving, your funds will become available to use again as you pay down your balance. Interest and/or fees are charged on the borrowed portion of funds. If you don’t use your line of credit, you won’t pay interest to the lender. Many lenders also won’t charge any fees if you haven’t used your funds.

A line of credit is a good option when you need immediate access to cash, such as to purchase supplies or to pay for an unexpected expense, like repairs to your vehicle or equipment.

Recommended Option: Fundbox

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You can qualify for up to $100,000 when you apply for a Fundbox line of credit. Fundbox fees start at 4.66% of the borrowing amount. You only pay when you use your funds, and you can save by repaying early. Payments are made weekly over a period of 12 or 24 weeks. You may receive a line of credit based on the performance of your business or for your unpaid invoices.

To qualify for a Fundbox line of credit, you must meet the following minimum requirements:

  • Be a U.S.-based business
  • Own a business checking account
  • Have at least $50,000 in annual revenue
  • Have a bank account with transactions for at least 3 months OR at least 2 months of activity in supported accounting software

Qualifying through Fundbox takes just minutes. If approved, you’ll be able to initiate draws on your line of credit immediately for deposit in your account as quickly as the next business day.

Rollovers As Business Startups (ROBS)

Do you have a retirement account? If so, you may qualify for a unique type of funding known as Rollovers as Business Startups (ROBS). You probably already know that early withdrawal from your retirement account results in penalties. But there is a way to access these funds without being penalized, and yes, it’s completely legal.

A ROBS plan allows you to roll over your qualifying retirement funds into capital for your new business. Here’s how it works:

  • A new C-corporation is created
  • A new retirement plan is created for the C-corp
  • Funds are rolled over from your existing retirement plan to the new retirement plan
  • These funds are used to purchase stock in the C-corp, giving you the capital you need to start or grow your business

Even though it’s just four steps, there are some legal issues to be aware of. This is why entrepreneurs that leverage their retirement funds in this way turn to a ROBS provider. A ROBS provider will handle everything for you, from setting up the new C-corp to maintaining compliance. In exchange, you pay a setup fee and a monthly maintenance fee.

Funds from your ROBS plan can be used for any business purpose. One of the best things about a ROBS plan is that you won’t be making payments with interest to a lender. You also don’t have to worry about traditional borrower requirements like personal credit score or annual revenues. As long as you have a qualifying retirement plan, you can set up a ROBS plan. The main drawback, however, is that if your business fails, you lose your retirement funds, so be aware of this risk before setting up your plan.

Recommended Option: Benetrends

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Benetrends is the creator of the innovative Rainmaker Plan, the original ROBS plan. Benetrends can get the funding you need for your business in as little as 10 days. You will have access to your retirement funds with no penalties with Benetrends’ easy four-step process.

There are no credit score, time in business, or revenue requirements. Most retirement plans with at least $50,000 qualify.

A setup fee of $4,995 is required to start your ROBS plan. After paying this initial cost, you must pay a service fee of $130 per month. This fee covers compliance, audit protection, and other services.

Purchase Financing

When you start your lawn care business, you’ll likely develop relationships with vendors. You can pay these vendors out of pocket when you receive your invoice, or you can break your purchase down into smaller, more manageable payments with purchase financing.

With purchase financing, a lender will pay your vendor up front. You’ll repay the lender the borrowed amount plus fees and/or interest through smaller payments made over a longer period of time. This is an excellent way to purchase supplies and other items critical for the success of your business when you’re facing cash flow issues or just need a little extra time to pay.

Recommended Option: Behalf

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Behalf offers purchase financing, allowing you to pay any merchant with terms up to 6 months. With Behalf, you can borrow between $300 and $50,000. Monthly fees start at just 1%, and there are no origination fees, membership fees, prepayment fees, or maintenance fees.

There are no minimum time in business, revenue, or personal credit score requirements. However, a hard pull of your credit is performed by the lender and will be used to determine if you’re eligible to receive funding, as well as your monthly fee.

Business Credit Cards

A business credit card is a great way to cover expenses or make purchases without waiting for approval from a lender. Once you’re approved for a credit card, you’ll be able to spend up to and including your credit limit anywhere credit cards are accepted.

Once you’ve made a purchase using your credit card, you’ll be required to make a monthly payment until you repay your balance, plus interest charged by the credit card issuer. This is a type of revolving credit, so as you repay, funds will be available to use again. Once you’re approved for a credit card, you don’t have to wait for approval to make a purchase. You can make one or multiple purchases up to and including the credit limit set by the lender.

You can cover an emergency expense or purchase supplies using a business credit card. You can also use credit cards for recurring expenses, such as gas for your truck and machines. With a rewards card, you can even get cash back or perks just for using your card.

If you don’t qualify for a business credit card, consider applying for a personal credit card to use for business expenses.

Recommended Option: Spark Cash For Business

Capital One Spark Cash For Business


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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

The Spark Cash card from Capital One offers unlimited 2% cash back that you can redeem anytime. New cardholders can earn a $500 cash bonus just for spending $4,500 within the first 3 months of opening their accounts. This business credit card has a 19.24% variable APR. There is no annual fee for one year, and the fee is $95 after the first year. Employee cards are available at no additional cost.

To qualify for this credit card, you must meet these requirements:

  • Excellent personal credit score
  • No bankruptcies
  • No defaults on loans
  • No payments over 60 days late on a credit card, loan, or medical bill for the last year
  • A loan or credit card for at least 3 years with a credit limit above $5,000

Recommended Option: Chase Ink Preferred

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


18.24% – 23.24%, Variable

Another business credit card to consider is the Chase Ink Business Preferred card. With this card, you’ll be able to rack up points just by making purchases for your business. All travel, shipping, advertising, internet, cable, and phone purchases yield three points for every dollar spent for the first $150,000 spent annually. You’ll receive one point for every dollar spent on all other business purchases with no limitations.

You’ll also be eligible to receive a bonus offer of 80,000 bonus points if you spend $5,000 within 3 months of opening your account. Points can be redeemed toward cash, gift cards, or other products and services.

Chase Ink Business Preferred has a variable interest rate of 18.24% to 23.24%. The card has an annual fee of $95. Other benefits are also provided for cardholders, including cell phone protection and free employee cards.

To qualify for this card, you must have good to excellent credit.

Bolster Your Web Presence

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The internet has made life easier than ever for small business owners. After all, you can do your accounting online, shop for supplies and equipment, and communicate with customers. Perhaps most importantly, you can market your business online. Bolstering your web presence is a quick and easy way to reach your target market, helping you bring in new customers and boost your profit potential.

Set Up Social Media Profiles

Social media has morphed into something much bigger than just chatting with family and friends. These days, people are using social media to find and connect with new brands and businesses. Shouldn’t your new business be included?

One of the best things about social media is that it’s free to set up your profiles. Add your business to Facebook, Twitter, Google+, Instagram, LinkedIn, Yelp, and/or Pinterest. With these social media profiles, you can share information about your business such as operating hours and services provided, post photos of completed jobs, promote specials, or share news about your business. On sites like Facebook, satisfied customers can even post reviews and ratings.

Want to learn how to get the most out of your social media pages? Take a look at our Guide to Social Media Marketing.

Build Your Website

Most people turn to the internet when they’re looking for a service provider, which is why it’s so important to have a website. No experience with web design? Don’t worry — there are a variety of web builders that do the hard work for you. Check out some of our top picks.

Your website doesn’t have to be complicated. Make sure that your design fits your brand and provides the most relevant information that customers need, including a list of services provided, your service area, and your contact information. You can even take it a few steps further by adding photos of jobs you’ve successfully completed, price lists, special promotions, and news and updates.

One last thing to note is that when you choose a domain name, make sure that it reflects your brand and includes your business name. However, you also want to make sure that it’s short and easy to remember. Avoid using symbols and numbers to make it easier for current and future customers to find you online.

Check out more tips and tricks for creating and maintaining your web presence.

Choose Business Software

Small Business Online Accounting Software

Every business — including your new lawn care business — needs business software to keep operations running smoothly. You can use business software to keep track of appointments, store customer data, process payments, create invoices, and keep up with your financials. Let’s explore a few types that would be useful for your lawn care business.

Accounting Software

Managing your finances is one of the most important aspects of running a business. Accounting software makes it easier than ever to track your finances. With this type of software, you’ll be able to keep up-to-date on the money that you receive, what is owed to you, and what you owe. In addition, using accounting software also makes it easier for you to run important financial statements and file your taxes.

Today’s accounting software comes with more features than ever, including cloud-based storage, online invoicing, automatic payment reminders, and mobile apps for tracking on the go. Unsure of which software is best for you? Check out some of our recommendations. If you’re new to accounting or need a refresher, make sure to download our eBook, The Beginner’s Guide to Accounting.

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A great choice for freelancers needing some extra help managing their business

Payment Processing Apps

Very few businesses today are “cash only.” This is because credit cards, debit cards, and even mobile devices make it easier than ever for consumers to pay for their purchases. To make payments more convenient for your customers, consider using a payment processing app.

Payment processing software transmits data between you, your bank, and your customer’s bank, allowing you to accept credit cards, debit cards, and other forms of payment. Many payment processors also include the hardware needed to accept these methods of payments. This hardware may be included in your subscription cost or for an additional fee.

Worried about bulky hardware? Don’t be. There are devices that easily affix to a mobile phone or tablet, so you can take payments anywhere — from your own office to your customer’s front yard.

Best Overall Mobile POS


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Highlights

  • No contract or monthly fee
  • Instant account setup
  • Retail upgrade available
  • Restaurant upgrade available
  • For iOS and Android mobile devices
  • 2.75% per in-person card swipe

Retail POS: Free trial ($60/mo value)

 

Restaurant POS: Free trial ($60/mo value)

 

Square POS: Always free

Field Service Management Software

Another type of software to consider purchasing for your business is field service management software. This software allows you to keep up with everything from your customers to your employees. There are even programs that are specific to lawn care companies.

With this type of software, you can keep up-to-date records on your customers, from their contact information to their history of appointments. With this software, you can easily schedule new appointments and dispatch employees. Other features may include automatic invoicing, route optimization, easy estimates, and GPS tracking.

Advertise Your Business

business loans for HVAC

In order to make your business successful and profitable, you have to have customers. And you have to reach customers by spreading the word about your business.

While bolstering your web presence is a good first step, don’t stop there. Consider purchasing paid ad space on social media platforms or search engines to reach a broader audience. Yelp for Business is an excellent way to advertise yourself while gaining street cred with potential clients.

You can also utilize free online sites like Craigslist to advertise your business. Just remember to follow the rules before posting and avoid spamming the website.

Moving beyond the web, never underestimate the power of “old school” marketing techniques like flyers and door hangers. Post flyers in areas that get a lot of foot traffic, such as retail shopping centers, and put door hangers around your neighborhood and surrounding areas. You can design and print these yourself, or you can pay an additional fee to a professional printer. Either way you go, this is a very affordable way to market your lawn care business. Before you use this method of advertising, contact your city government office to learn about any restrictions and always make sure to get the permission of the property owner before distributing flyers on private property.

You can also use your work truck to advertise your business. Make sure that your business name, telephone number, and/or URL are prominently displayed and easy to read. Online printers can create custom vinyl decals featuring your logo, name, and contact information at a very affordable price.

Finally, word-of-mouth advertising is one of the most effective methods of advertising in this industry. If your customer likes your service, they’ll tell their friends, family members, neighbors, and colleagues about your service when recommendations are needed. They may give you a glowing review on your website or social media page, which could lure in additional customers. Always make sure to provide the best service to your customers so they’ll refer you to new customers in the future.

Final Thoughts

Your new lawn care business won’t be up and running overnight, but taking the time to go through each step ensures a better chance for success. Every business is different, and you may need to tweak some of these steps to better fit the vision for your lawn care business. Maybe taking the steps in a different order makes more sense for your business, or maybe there’s a step that isn’t relevant to your future goals.

No matter how you picture your future, you’re now armed with the knowledge of what it takes to start your own lawn care business. Now, it’s up to you to determine what steps you’ll take next to become a successful entrepreneur.

The post How To Start A Lawn Care Business appeared first on Merchant Maverick.

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How To Set Up A Free Square Account

Thinking about using Square to process payments for your business? Whether you are a solopreneur or a busy boss running multiple locations, you can quickly set up an account with Square with little to no fuss. Square offers several time-saving benefits for the small business owner looking to start processing payments, including no credit checks, a free magstripe reader to get you started, and a free Square POS app which enables you to start taking credit card payments right away. Not only that, but the Square dashboard offers analytics reporting, inventory management, alerts, and (with optional add-on software) even the ability to plan email marketing campaigns!

With all of these conveniences and freebies, you can expect slightly higher transaction fees than you’d get with a traditional merchant account. However, as a third-party processor, Square offers a very transparent pricing plan that starts at 2.75% per swipe dip or tap, and 3.5% + 15 cents for keyed-in transactions. You won’t be surprised with hidden fees or contracts, and you can enjoy the same processing rate for all major credit cards. Square also offers payment dispute assistance, chargeback protection, and secure, PCI compliant software — all included.

If your interest in Square is piqued, but you need a little more information before getting started, then you’ve landed on the right post! Below, we’ll take you step-by-step through the process of signing up for a new Square account. As you will see, setting up your Square account is relatively straightforward. And the best part? It’s completely free and requires no commitment on your part whatsoever.

What Do You Need To Get Started?

Before we get started, here is the main information you’ll need to set up your Square account:

  • Email address
  • Last four digits of your Social Security number (to confirm your name)
  • Home address
  • Shipping address
  • Legal name
  • Phone number
  • Bank account number to set up your direct deposit schedule

You don’t need:

  • Bank statements
  • Proof of revenue
  • Your full social security number
  • Tax documents
  • A credit check

We are going to get pretty detailed in this tutorial, but rest assured, the application itself takes less than ten minutes. Follow along with the guide below to discover how to set up and make the most of your new Square account!

How To Create A Free Square Account

First, visit Square’s sign-up page and hit the “Sign Up With Square” button.

Sign up with Square

 

The first step asks for your email address and prompts you to create a password and choose your country. You also must agree to Square’s terms, privacy policy and e-sign consent policy. We strongly suggest that as with any contract, you take the time to click on, read, and understand the details before agreeing to them.

 

Square set up account

 

The next screen is straightforward and asks if you are an individual or represent a larger business, charity, or religious organization. Enter in your business name or another title that you would like to appear on your receipts. I’m typing in “Blue Heron Content” as my business name.

Create an individual square account for business

 

Now we are getting closer to the meat — Square wants to know where you plan on processing payments. In this example, I don’t want to limit myself, so I am choosing all of the possibilities!

 

Square processes payments mobile online and square invoices

It’s important to mention that even if you don’t plan to use some of these options right away, you can still access them later at any time.

Next, Square asks what else they can help you manage. I am also going to select all of the options again to get a better idea of what Square may suggest right off the bat. I don’t personally need employee tracking for my business, but let’s see what it can do!

Now it’s time to make decisions. Because I selected that I was interested in restaurant-related products, I am offered a free 30-day trial of Square for Restaurants, one of Square’s premium iPad POS apps. (Check out our full review of Square for Restaurants for a more detailed look at pricing and features.) If you are a restaurant owner, check out some of the perks Square lists below. For this particular tutorial, though, we are going to stick with the free POS system.

Square Point of Sale and Square for Restaurants

 

Now that I have selected Square Point of Sale as my preferred POS app, I’ve made it to the “Let’s talk about you” page. This is the place to plug in the rest of your information. Note that Square is not going to perform a credit check on you or your business, they just need the last four digits of your social security number or ITIN, your legal name, street address, and phone number. They use this information to verify your identity.

I’ve finished filling in this form, so I am going to hit “continue” and see what’s next on our journey.

 

Square setup form

 

Choose A Magstripe Reader

Great news! By the time you arrive at the next screen below (3-5 seconds, give or take), Square will have successfully verified your identity. Now it’s time to select a credit card reader to accept in-person payments. For my part, while the Contactless + Chip Reader looks very enticing at $49, I am going to accept the free reader for now.

Square Reader

 

Now there’s another choice to make. Square would like to know if I would like the 3.5mm magstripe reader that is compatible with the traditional headphone jack, or the Lightning connector version for iOS devices. I’m choosing the reader that plugs into a conventional audio jack. You’ll obviously choose the option that works best for your business setup.

Compatibility Note: Square’s magstripe and chip card readers and the Square Point of Sale (POS app) are compatible with most Apple iOS and Android devices running the latest software updates. After this tutorial, check out our Square POS Review for more about system requirements, integrations, and a lot more details about Square POS.

Free Square Reader

After selecting the type of magstripe reader that fits your needs, Square will give you the options to find a retailer close to you and pick up the reader or have it mailed. Personally, I’m opting for Square to send me the reader in the mail. After entering my shipping details, I am one step closer to getting my own Square reader. Oh, and shipping is free, too! Just note that it could take up to 10 days for yours to arrive. 

Order A Square Reader

After entering my information and clicking continue, the setup process is officially complete! That was very easy. Square has already sent me an email letting me know when to expect my reader and another to confirm my email address.

It’s time to head to the new dashboard to set up the backend. 

How To Set Up Your Square Dashboard

Right away, you can see that the dashboard has a clean layout and is pretty straightforward. Since this is the first time I am visiting this new dashboard, Square is offering up these green bubbles as a setup guide. Let’s explore the dashboard and start setting up inventory, customizing the layout, and checking out the reporting features.

Square Dashboard setup

 

Compatibility Note: You’ll be able to access the full Square dashboard from any web browser, but the Square Dashboard app is only compatible with iPhones at this time. You can still take payments on any compatible iOS and Android device with the Square POS app, however.

Add Items & Build Your Inventory

From your home screen, you will see the teal Items button (pictured in the screenshot above). The place to add inventory is under Items>Item Library. To the right on the screenshot below, note the blue button that says “Create an Item”:

Adding an Item in Square Inventory

Here is what the “Create an Item” screen looks like in the Square Dashboard before adding a product:

Create an Item Screen in Square Dashboard

I went ahead and uploaded a product image and filled out my first item below. I can add the amount of stock I have, a price, and set up low-stock alerts for myself here, too! Square will even let me color-code items if I prefer to group categories by colors. 

It’s also possible to create variant items if you sell the same product in different colors and/or sizes. Plus, for cafes and restaurants, there’s a “modifier” option. Say, for example, that you want to offer coconut, soy, and almond milk alternatives for customers in your coffee shop. You can do that, and even set an upcharge fee for these items using the modifier feature. There’s also an option to specify at which locations an item is available if you have more than one shop. 

Add an Item in Square Inventory

Create & Manage Locations

You can create multiple locations from within your Square Dashboard by going to “Accounts and Settings” and then to “Business” and selecting “Locations.” Square will even let you specify a mix of physical locations with a set address and mobile locations without one.

Square’s location management features can help you manage inventory and gather data from multiple stores — and it is totally free:

  • Linked locations and deposit options
  • Per-location item libraries
  • Device management for security
  • Reporting tools to compare/contrast sales or other data

Square also offers advanced tracking and reporting tools for individual employees across your locations. More on those features and cost in the Employee Management section.

Manage Sales Tax Settings

You will find Square’s sales tax settings nestled under the Items menu in your dashboard.

When you create a tax at your Square Dashboard, the tax will automatically sync to every device in your account, and you can specify which taxes apply to which locations. You can even build the tax into the price of the item if you prefer, rather than adding the tax to the price afterward. Square also lets you modify tax settings from within the mobile POS app as well, which is useful when you need to make changes on the fly.

In addition to multiple tax rates, you can create conditional tax rules, which are preset conditions in which a tax won’t be applied — whether you need that to apply to one item or the entire order. This is especially helpful for restaurants that handle online orders.

Now, let’s head back to the home screen and customize our dashboard layout, and then check out the reporting features!

Customize Your Dashboard Layout

Customizing the layout of your Square Dashboard is super easy. First, you can get rid of anything you know you won’t need right off the bat by scrolling through and unchecking anything in the drop-down menu (pictured on the right-hand side of the screenshot below). Don’t worry about making the wrong decision, because you can reset the whole thing or click to re-check one box.

Square Dashboard Customize

The other way to easily adjust your view is by dragging and dropping the tiles to configure them exactly how you want them. For my store, I switched tiles to move the feedback tile up from the last row. This drag-and-drop feature makes it easy to get the information you prioritize first, and then scroll to other options whenever needed.

Moving Square Tiles in Dashboard

As you can see, it’s simple to move things around, and if you change your mind, just as easy to change it back.

Review Square’s Reporting Features

The extensive, user-friendly and (mostly) free reporting features are what make Square a fantastic, no-fuss choice for any small business. As you can see in the screenshot below, there is a long list of possible reports. Every business has unique needs, and Square does a good job of supporting a wide range of small businesses with various options and features.

Square reports

All of the sales reports, such as Sales Summary, Sales Trends, Items Sales, and Modifier Sales, are free. Custom Reports is another handy and entirely free reporting tool that can help you combine and compare your reporting data. Custom Reports allows you to aggregate reports with multiple filtering options. This feature makes it easy work to create a report that breaks the data down for a single location, or you can pick and choose certain pieces of data and compare them across different locations. For instance, you could create one report that compares Gross Sales and Returns for a particular device and/or location. 

To find out even more about what Square’s dashboard can offer you in terms of reporting features, check out our post Why We Like Square’s Online Dashboard and Analytics App.

If you are looking for even more robust reporting and tracking across multiple locations for your employees, it may be worth it to you to learn more about the Employee Management tools, featured below.

Manage Your Employees 

Within the Dashboard, you’ll find the Employee section, which is the foundation for Square’s Employee Management feature set. Adding a new employee into your dashboard is easy — and adding in separate email logins for Square POS is entirely free. However, if you want advanced reporting on timekeeping, individual employee sales, and sales vs. labor costs, you need to subscribe to Employee Management, which will cost you $5 per employee. 

Square Employee Reporting Tool

Here, I have chosen to select the free “Mobile Staff” option to show you that you can invite employees using the email address that they will then use to log into the Square app. You can also enable or disable permissions for accepting payments in Offline Mode and set or remove Issue Refunds permissions.

It’s important to note that employees assigned to mobile staff can only access their own sales data in the Square POS app. 

Square Employee Permissions Mobile Staff Free

If you want something a bit more substantial in terms of employee reporting, Square offers that, too.  To track individual employee sales through the day, keep better performance accountability across multiple locations, and closely monitor administrative permissions, the $5/mo per employee cost for the advanced Employee Management feature seems like a pretty fair deal. You also get timekeeping, so your employees can clock into their shifts through the Square POS app. 

If you want to get started with Employee Management, there are a few ways to do it: Head to Employee Sales or Labor vs. Sales under Reports and start adding employees. It’s free to try for 30 days!

Employee Management Sales Reporting

 

How To Set Up Square Deposits & Funding

When it’s time to get all of that revenue into your bank account, Square has several options for getting your money, all found under Deposits.

Square Instant Deposit and Deposit Schedule Tutorial

Square will automatically deposit your funds on the next business day. You can also change your ‘close of day’ to adjust for your time zone or business hours if you would like. The close of day determines when Square cuts off payment deposits for the next business day. If you need your money even faster, Square offers Instant Deposits that transfer your current Sales Balance immediately — whether it’s a business day or a weekend. This faster service will cost you 1% of the transfer amount. You can even use Scheduled Deposits to get your money deposited at each day’s close of business. 

Find out all the details about the instant deposit feature, and more about how Square’s deposit options work in general, by checking out our post, How Does Square’s Instant Deposit Work?

To set up your deposit schedule or choose an instant transfer, you’ll need to link your debit card (in addition to your bank account). However, you have yet another option for disbursement. You can request your very own Square Card, a personalized business debit card that holds your Square balance.

Square Card Small Business

You can use your card anywhere MasterCard is accepted. If you’d like to order one, you’ll find “Square Card” tucked right under the Deposits tab. To be clear, you can request a Square Card and also choose to have funds deposited into your bank account.

Explore More Square Software Options

Square offers a myriad of specialized software options to make business more productive. Here are some of your options:

  • Customer Engagement: Square’s customer engagement tools include a customer database, feedback management, and CRM software. The database and feedback tools are free, but the CRM starts at $15 month. The image above is a sample CRM campaign I could send to my lapsed customer list. Email campaigns are easy to customize and segment for those reachable-by-email customers.
  • Loyalty Program: This tool starts at $25/month. Read our Square Loyalty Program Review for an in-depth analysis.
  • Advanced Employee Management: As outlined in a previous section, pay $5/month per employee for advanced reporting and employee management tools.
  • Payroll: Square Employee and Contractor payroll starts at $29/month plus $5/employee. Contractor-Only Payroll is just $5/month per contractor.
  • eCommerce: Square offers free space and setup for an online store, and you can integrate with major shopping carts. Read our Square Online Store and eCommerce Review.
  • Invoicing: Invoices are always free to send, pay 2.9% + 30 cents per invoice when your customer pays with credit or debit online. For more on the pros and cons, pricing, and an in-depth look at invoicing with Square, check out our Square Invoices Review.

Choose Another Square Point of Sale App

While the free Square POS app will likely fit the bill for many small businesses, Square has developed more specialized tools for retail, restaurants, and appointment-based businesses.

Square For Retail:

This POS system works with an iPad and has a redesigned interface and usability geared for retail businesses that have substantial inventory. Instead of scrolling to an item in your inventory, an item is easily searchable by name. The barcode scanning and printing features make keeping up with inventory a bit easier, too. Check out our Square Retail Review for more on price, pros and cons, and all a lot more details.

Square for Restaurants:

If you are familiar with Square’s POS system, you may be surprised to see how different Square for Restaurants really is. And it has to be. Sit-down restaurants usually require more specialized tools to cover their everyday business needs, and this POS delivers — from table mapping, menu creation, table management, and reporting tools — there are a lot of specialized features here. Check out our full Square for Restaurants review to find out if this is the right choice for your restaurant.

Square Appointments:

If your business relies on creating and maintaining appointments for just yourself or an entire team, Square Appointments might be just what you need. Note that this POS option is an iOS exclusive. It’s free for individual users, and pricing starts at $50 a month beyond that. Check out our in-depth Square Appointments Review, including functionality, customization, and features.

Choose Hardware Options

Square has expanded to offer so much more than the free magstripe credit card reader. As I mentioned earlier, Square offers a Contactless + Chip reader that lets you accept chip card and contactless payments for $49, which is a smart move to improve payment security.  

If you need something more robust in terms of hardware, however, you can probably find what you need. Square offers countertop POS systems with customer-friendly displays, and if you want to toe the line between countertop vs. mobile, Square also offers a fully portable credit card terminal with a built-in receipt printer.

Square’s countertop POS devices include:

  • Square Stand: This hardware option is a tablet stand with a built-in card reader (along with contactless and chip reader) with an affordable price tag, minimal cords, and a swivel stand.
  • Square Terminal: A more portable option, Square Terminal accepts magstripe, chip card, and contactless transactions. It’s sleek design, built-in receipt printer, and generous display size make it a nice, versatile option.
  • Square Register: Need something more robust? The Square Register offers a 13.25-inch display to run your Square Point of Sale, and on the opposite side, you have a 7-inch customer display ready for magstripe, chip card, and contactless transactions.

For an in-depth look at each of the POS options or to take a gander at all the Square POS kits and bundles, head over to A Guide To Square Credit Card Readers And POS Bundles.

Where To Go Next With Square?

When you consider that Square is a secure, PCI compliant option with a transparent pricing plan and offers lots of bells and whistles, it truly is an excellent solution for any small business. I like that it’s so easy to set up an account with Square, and that they don’t ask for much in terms of personal information. When it is time to get set up or find reports, the dashboard is intuitive and easy to navigate. I also love that Square offers affordable hardware and software when it comes time to scale the business.

Not quite ready to make a decision? Check out our Square Review or head over to Square and set up your own account to see for yourself.

Already have an account? Square support provides great resources to help answer your questions as you navigate your options.

Have questions, comments? Leave us your thoughts below! (Just make sure you check our comment guidelines, first!)

The post How To Set Up A Free Square Account appeared first on Merchant Maverick.

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Shopify VS Etsy

Shopify VS Etsy

Tie

Pricing

Tie

Tie

Hosting

Tie

✓

Specific Size Of Business

Tie

Hardware & Software Requirements

Tie

Ease Of Use

✓

✓

Features

✓

Web Design

✓

Integrations & Add-Ons

✓

Payment Processing

✓

Customer Service & Technical Support

Tie

User Reviews

Tie

Tie

Security

Tie

Winner

Final Verdict

Review

Visit Site

Compare

If you’ve arrived at our comparison of Shopify and Etsy, I’m guessing you’re an online seller (or an aspiring one) of the “artsy” or “craftsy” variety. Perhaps even “artsy-craftsy.” Whichever identifier you prefer, you’ll be pleased to know that both Shopify and Etsy can help you sell all sorts of unique, handcrafted, and/or vintage items.

I’ll admit that in some respects, it’s a little unfair to compare Shopify and Etsy head-to-head. Shopify is a shopping cart platform/website builder you can use to create and manage your own, standalone ecommerce store. The Shopify brand itself operates almost completely in the background from your shoppers’ point of view. (If you build your store correctly, no one will know that it’s really powered by Shopify.)

By contrast, Etsy is an online marketplace that allows you to set up shop directly alongside other ecommerce vendors, all with a similar artsy and/or craftsy vibe. All the while, Etsy’s involvement in the whole operation is directly front and center for your shoppers.

You could also argue that a direct comparison between Shopify and Etsy is quite fair and appropriate. People often wonder 1) which of the two software platforms provides the best starting place to sell online, 2) under what circumstances it makes sense to use one or the other (or both), and 3) at what point a seller might need to transition from Etsy to Shopify.

Plus, the introduction of Pattern by Etsy a few years ago made the comparison between Shopify and Etsy even more apropos. For a monthly fee, Pattern makes it possible for Etsy sellers to maintain a standalone, inventory-synced site of their own. Sites built with Pattern can even offer additional products and services that don’t meet the handmade/vintage/craft supply restrictions of normal Etsy shops.

Pattern aside, a huge draw of Etsy in its original form is the built-in traffic and existing customer base from which you can directly benefit as a seller. (You don’t get that with a standalone Pattern site.) The downside, of course, is that you must share your customers with similar stores.

So, with Pattern thrown in, can Etsy compete directly with Shopify? Does the magic combination of Etsy and Pattern render Shopify completely unnecessary for some Etsy-type sellers? You can already tell from our chart at the top of this article that we are still fans of Shopify, but we think all sellers should understand precisely how these two services stack up on all the important dimensions. Ultimately, the right fit is up to you.

Shopify’s eCommerce Options

Mobile POS Online Social Media
Mobile App + Free Card Reader Point of Sale Online Store Social Media Selling
Get Started Get Started Get Started Get Started
Low-cost POS for iOS and Android with free hardware All-purpose POS integrated with all sales channels Build a store or integrate with your current website Sell on Facebook and other platforms
Starts at $9/month Starts at $29/month Starts at $29/month Starts at $9/month
Free Trial Free Trial Free Trial Free Trial

Pricing

Winner: Tie

Despite some overlap, there’s no getting around the fact that Shopify and Etsy have very different pricing structures. The differences are significant enough that we can’t call a clear winner for cost.

Here’s a very generalized way to compare the two:

  • Sellers who are just getting started, are very concerned about cash-flow, and simply can’t afford a monthly subscription fee will find an initially cheaper option in Etsy.
  • Once you have a moderate and fairly predictable stream of transactions and need a full website for your store, Shopify starts to become more cost-effective.

That’s the condensed version of our pricing comparison. For the full breakdown, strap in and keep reading!

When comparing these two platforms, you should first wrap your mind around the main categories of fees involved. It will also help to keep the following overarching difference in mind: Shopify’s main charge is a monthly fee for using the service, while the main component of Etsy’s cost is a fixed 5% transaction fee charged on every sale that occurs on the platform.

Here are the different categories of costs you should keep in mind when comparing Shopify and Etsy:

  • Monthly Fee: Subscription fee for using the platform.
  • Listing Fee: Cost of listing a product (or group of products that make up one listing) in your shop.
  • Transaction Fee: Percentage commission per sale charged by Etsy or Shopify itself.
  • Payment Processing Fee: Not the same as a transaction fee! This is a per-sale fee (usually a percentage and a dollar amount) charged by your credit card processor/payment gateway. While this entity is usually a third-party company, it turns out both Etsy and Shopify have an in-house, pre-integrated option that most sellers use (Etsy Payments and Shopify Payments, respectively).
  • Standalone Website: Cost of having your own, hosted website with a customizable theme template.

Let’s take a close look at the numbers, shall we? All prices will be shown in USD.

Shopify Pricing

Shopify plans have a monthly fee, no listing fee, and a variable transaction fee that only comes into play if you do not use Shopify Payments as your credit card processor. Starting at the $29/month level, you get your own store website. This involves choosing a free Shopify template or purchasing a premium template from the Shopify theme store. As you look through Shopify’s five pricing plans, remember that you can completely avoid Shopify’s extra transaction fee if you use Shopify Payments as your credit card processor.

Shopify Lite Plan 

  • Monthly Fee: $9/mo.
  • Transaction Fee:
    • If Using Shopify Payments: None
    • If Using External Gateway: 2.0%
  • Payment Processing Fee (Online)
    • Shopify Payments: 2.9% + $0.30
    • External Gateway: Varies
  • Standalone Website: Unavailable. Sell on an existing website, Facebook, or in-person only.

Basic Shopify Plan

  • Monthly Fee: $29/mo.
  • Transaction Fee:
    • If Using Shopify Payments: None
    • If Using External Gateway: 2.0%
  • Payment Processing Fee (Online):
    • Shopify Payments: 2.9% + $0.30
    • External Gateway: Varies
  • Standalone Website: Included. Templates are $0-$180/ea.

Shopify Plan

  • Monthly Fee: $79/mo.
  • Transaction Fee:
    • If Using Shopify Payments: None
    • If Using External Gateway: 1.0%
  • Payment Processing Fee (Online):
    • Shopify Payments: 2.6% + $0.30
    • External Gateway: Varies
  • Standalone Website: Included. Templates are $0-$180/ea.

Advanced Shopify Plan

  • Monthly fee: $299/mo.
  • Transaction Fee:
    • If Using Shopify Payments: None
    • If Using External Gateway: 0.5%
  • Payment Processing Fee (Online):
    • Shopify Payments: 2.4% + $0.30
    • External Gateway: Varies
  • Standalone Website: Included. Templates are $0-$180/ea.

Shopify Plus: Custom pricing. Reserved for enterprise-level customers.

With each bump in subscription level, Shopify sellers have access to additional features, as well as more staff accounts for their stores. Check out our full Shopify review, or our quick guide to Shopify pricing, for a more complete breakdown of features by plan.

Basic Shopify Advanced

Monthly

$29.00/mo

$79.00/mo.

$299.00/mo.

Yearly

$26.10/mo.

$71.10/mo.

$269.10/mo.

2 Years

$23.20/mo.

$63.20/mo.

$239.20/mo.

3 Years

Same as above

Same as above

Same as above

Etsy Pricing

Etsy has two main plans — Standard and Plus — and a Premium plan that will launch sometime in 2019. Most Etsy sellers use the Standard plan with no monthly fee, whereas the Plus plan is $10/month. Other components of Etsy’s cost include a fixed listing fee, as well as 5% transaction fee on every sale. There is no avoiding this 5% fee, even when you use Etsy Payments as your credit card processor.

Also, keep in mind that your only web presence is your shop page within the Etsy marketplace. If you’d like your own store website separate from (but synced to) your Etsy shop, you can create and maintain a Pattern site for an additional $15/month.

Here are the plans:

Etsy Standard

  • Listing Fee: $0.20/ea.
    • Lasts 4 months
    • Charged when listing is first published or when renewed
  • Transaction Fee: 5.0%
    • Etsy’s commission per sale
    • Also charged on the shipping price
  • Payment Processing Fee w/Etsy Payments: 3% + $0.25
  • Standalone Website: None, or $15/month with Pattern. Pattern site templates are free.

Etsy Plus

  • Monthly Fee: $10/mo.
  • Other Costs Same As Above
  • Additional Features:
    • A monthly budget of credits for listings and Promoted listings ads
    • Access to a discount on a custom web address for your Etsy shop
    • Restock requests for shoppers interested in your items that have sold out
    • Advanced shop customization options
    • Access to discounts on custom packaging and promotional material like boxes, business cards, and signage

Etsy Premium

  • Launching 2019
  • Will include premium customer support and advanced management tools for businesses with employees

One final note about pricing before we sum up this section: if you want a standalone site built on Pattern, you’ll also need to purchase and/or connect a domain name. The annual cost varies, but should be comparable to purchasing a domain for a Shopify store. Of course, if you stick to just selling on Etsy and not on Pattern, you don’t need your own domain URL.

Again, this is one of those comparisons you’ll have to decide the winner of for yourself. You can see that once you have a steady flow of significantly-sized transactions, avoiding that 5% Etsy fee on every sale and ponying up $29/month for Shopify instead (and using Shopify Payments to have the Shopify transaction fee waived) starts to make more sense.

Hosting

Winner: Tie

Shopify and Etsy stores are both fully-hosted solutions based in the cloud. You don’t need to download or install anything to use either. If you create an Etsy-connected website using Pattern, your site’s hosting is covered by your $15/month Pattern subscription. Similarly, Shopify store hosting is covered by the monthly fee.

Specific Size Of Business

Winner: Shopify

Shopify deserves the win in this category for accommodating a much wider range of business sizes. For just $9/month, you can start selling on Facebook with no additional transaction fees (beyond payment processing itself) if you use Shopify Payments. From there, Shopify scales all the way up to enterprise-level merchants. Etsy, on the other hand, is better geared toward small to mid-sized operations and doesn’t scale nearly as well. That said, for those who just want to test the ecommerce waters and dabble in selling a few handmade or vintage products, Etsy is ideal.

Hardware & Software Requirements

Winner: Tie

No special hardware or software is required to open and manage a shop on either platform. You do have the option to add hardware (like card readers) if you wish to sell in-person.

Ease Of Use

Winner: Etsy

Shopify usually earns our top rating for ease of use in the ecommerce software category, and with good reason. In this case, however, I’m awarding Etsy the narrow win. As a marketplace with a uniform structure across all web shops on the platform, the whole Etsy setup process is much less open-ended, so it’s easier to start selling right away. Once you fully dive into the admin dashboard and start manipulating individual features, however, I think the two platforms are equally easy to use.

Let’s peek inside the setup process and backend structure of each system, so you can see what I mean.

Shopify Setup

Shopify offers a two-week free trial of the platform — all you need is an email address. You’re free to test the software to your heart’s content, short of making actual sales.

Shopify Dashboard

Once you’ve started a trial account, you’ll gain immediate access to your store’s admin panel. The Shopify dashboard is quite streamlined, with daily operation menus contained in the left sidebar. There are even a few tips to get started setting up your store in the center area:

Shopify — Add A Product

Listing your first product is typically one of the first tasks inside Shopify, but it doesn’t have to be. Adding a product involves completing a simple interface:

In addition to configuring products and setting up the rest of the backend of your store, you can work on customizing your online storefront at the same time. We’ll have more on this process in the Web Design section.

While Shopify is easy to use, you are ultimately responsible for locating and configuring all the settings (shipping, tax, billing, etc.) to get your store going.

Etsy Setup

The cookie-cutter look of Etsy shops is no accident — it’s achieved through a simple, highly-controlled system behind the scenes. In fact, Etsy guides your hand to such a strong extent that by the time you’re taken through the basic setup process, you already have a store that’s up and running.

Unfortunately, there is no free trial of Etsy. Instead, you must enter a product, your bank account routing number, your credit card info, and other personal/business details before you can even enter the admin dashboard. Coming from the land of ecommerce software where no-credit-card-required free trials abound, I find this system annoying. However, I can’t deny that it is also very effective.

From my personal Etsy account, I’ve used to make Etsy purchases in the past, I simply clicked “Sell on Etsy.” I was then taken through a very detailed setup wizard, all the way from setting my country, to listing my first product, to inputting my billing and payment methods. As you can see from the dots across the top of the wizard interface, it’s a five-step process:

Etsy Dashboard

When you finally make it to the main admin panel (called Store Manager), you’ll find it’s actually fairly similar to Shopify. In my own testing, I could find all the menus and features I was looking for in the left sidebar:

Etsy — Add A Product

The most detailed piece of the store setup wizard is step three: adding products (a.k.a, listings). As I mentioned, you’re forced to list at least one item before you can even complete the Etsy signup process and see your main dashboard. Below is the third screen from the setup wizard. Yep, it’s long. Click it to enlarge, if you dare.

This may seem like a lot of work, and it kind of is. Mercifully, Etsy makes it all extremely straightforward. You just need a touch of patience. As part of this process, you’re actually also setting up a shipping profile that can then be reapplied to other products. And, once you choose the type of product you’re selling, Etsy is very good about predicting the type of attributes and variations you might need for that product. I walked away from the processing thinking, “Wow, Etsy knows its sellers and their products really well.”

Side note: Once you finally make it to your dashboard, you can load additional products with a similar interface:

As soon as I was (finally) done with the initial setup wizard, my shop was online and ready to sell. I received so much guidance steering me directly to the goal that I almost felt like I was tricked into suddenly having an active store. In a good way, I guess!

I’ve focused on getting a store up and running in this section as an illustrative example — there are lots of other components of each platform to consider. As you’ll see in our Feature section below, though, Etsy has fewer features than Shopify overall. This makes it easier to quickly get a handle on the entire software platform’s capabilities and scores Etsy another point for user-friendliness. Still, the ease of going from zero to ready-to-sell is what really puts Etsy on top.

Features

Winner: Shopify

Let’s acknowledge right away that comparing the features of Etsy and Shopify is hardly an apples-to-apples endeavor. One is an online marketplace including multiple sellers, while the other is a platform on which to build a website that you ultimately own. Etsy has a specific target market of crafters, vintage resellers, and the like, while Shopify’s merchant pool is much wider. The feature sets of each platform work really well for sellers within their specific contexts. Once we add Etsy’s Pattern to the mix, the comparison gets a little closer, but it’s still slightly unfair to both systems.

I do think the best “features” of Etsy have already been highlighted — it’s very easy to get started selling, and you’ve already got a built-in traffic base. Beyond these important advantages, there’s not a lot you can do on the back or front end of your Etsy and/or Pattern shop that you can’t do with Shopify. And, if the core Shopify platform doesn’t have a specific tool you’re looking for, I can almost guarantee you’ll find a solution in the immense app store (more on that later).

All in all, I’m giving Shopify the win because I think it’s a more advanced system for ecommerce. Shopify adds several features that Etsy and Pattern are missing, like checkout on your own domain (customers are redirected back to Etsy if they purchase through your Pattern site), manual order creation, a built-in POS system, and bulk product import/export/editing. In addition, many of the features the two platforms share in common are more robust or flexible with Shopify (I’m thinking of their respective discount engines, abandoned cart recovery systems, SEO tools, etc.).

Despite their core differences, Shopify and Etsy/Pattern still have a lot of great things in common. Thus, I’d like to end this section with a list of some features both platforms share:

  • Sell unlimited products
  • Sell physical or digital products
  • Free SSL certificate (with Pattern)
  • Built-in blog (with Pattern)
  • Social media sharing
  • Automatically calculate shipping & tax
  • Purchase/print shipping labels
  • Shipping discounts
  • Inventory & order management
  • Create discounts & coupons
  • Abandoned cart recovery
  • Guest checkout
  • Analytics & reports
  • SEO tools
  • Mobile store management app

Web Design

Winner: Shopify

Shopify easily wins this category, even after you throw Etsy’s Pattern software into the mix. Shopify’s frontend template options have Pattern’s beat on all counts — the sheer number of options, the variety of styles, and the overall quality of designs. Not to mention that once you’ve chosen a theme, Shopify gives you much more flexibility to perform further customizations. Allow me to illustrate!

Shopify Design

Shopify offers 70 templates, most with 2-4 style variations. Ten themes are free and supported by Shopify developers, while the remaining third-party themes are offered at $140-$180 as one-time purchases.

I think most of the free themes from Shopify outshine Pattern themes, but we’ll get to Pattern in a moment. For now, you should know that Shopify has tools to adjust fonts and colors (via the Theme Editor), and to drag-and-drop page elements up and down your layout (via the “Sections” tool) — all without touching any code. You can also make further adjustments with code if you have those skills, but this is not necessary for the average user.

Here’s a quick screen-grab of Shopify’s visual, non-coding editor:

For more information on how these tools work, check out our full Shopify Review.

Etsy Design

Your Etsy shop comes with just one design template that’s the same as everyone else’s on the marketplace. You already saw the default store layout that popped up when I initially created my store. In the backend admin panel, you can customize your homepage by adding a banner image, your logo, a featured area to highlight products, an About section, and a few other basic elements. Each piece is fixed in place, though — no drag-and-drop tool to be found. Anywhere there is a little “+”, you can add a specific element:

With the $10/month plan, you have a bit more flexibility in your design. For example, you can insert a rotating image carousel in lieu of a fixed banner image across the top. And yet, there’s still no dragging nor dropping allowed.

If you decide to create a standalone website with the Pattern feature (remember, that’s another $15/month), you can choose from 10 possible templates. Pattern will recommend an option for your shop depending on your current Etsy store, but you can easily swap it out later:

Once you’ve chosen a theme, you have the option to customize your colors, fonts, text, and images — but again, all with pre-defined placement: Here’s the interface after I added a logo and header:

You can also add a few select pages to your site, like an About or Contact page. You just have to be okay with your layout being completely fixed for each page. Even if you wanted to try tweaking the template code, it’s just not an option.

Sorry, Etsy. Shopify has some of the best designs and editing tools of all shopping cart platforms on the market, so I’m not surprised that Etsy is completely overshadowed in this area. Pattern is only ideal for the most basic of websites. Fortunately, it does offer a 30-day free trial of a live site (once you’re already signed up for Etsy) if you’d like to test the site builder for yourself.

Integrations & Add-Ons

Winner: Shopify

Etsy and Shopify each offer a collection of free and paid add-ons to integrate with your shop. The big difference is in the quantity. Etsy’s selection of a couple dozen apps just can’t compete with Shopify’s approximately 2500 offerings. If you’re worried about the quality of these Shopify add-ons, you have access to thousands of user reviews in the app store. You’re likely to find anything and everything you need to expand your store beyond the core Shopify platform.

A large selection is certainly great, but with the important caveat that the vastness of it all could end up becoming too overwhelming, costly, and unnecessary for small sellers. I was happy to see that Etsy at least offers a few well-known accounting and tax integrations (e.g., Quickbooks, Wave, TaxJar, TaxCloud) and email marketing apps (e.g. AWeber, or MailChimp if you use Pattern). You’ll need to decide if you will ultimately need the store expansion capability that Shopify provides, or can settle for Etsy’s offerings. If you set up a Pattern store, you’ll definitely want to add a good SEO integration.

Payment Processing

Winner: Shopify

Payment processing is a complicated and nuanced topic, so we’ll just cover some basic comparisons. Your mileage on this verdict in favor of Shopify will vary depending on your location, currencies, risk level, etc.

We’ve already mentioned that Shopify and Etsy both have their own self-branded payment gateways. Do note that Shopify Payments is actually built on Stripe’s infrastructure, while Etsy Payments is largely powered by Adyen, another big payment gateway company.

At any rate, most sellers on either platform end up using these pre-integrated options. Why? Well, even though you have over 100 processor options with Shopify, recall that you’re penalized with a separate transaction fee (usually 2%) if you don’t pick Shopify Payments. Meanwhile, Etsy Payments (formerly Etsy Direct Checkout) is essentially your only credit card processor option with Etsy. The only reason you wouldn’t use Etsy Payments is if it’s not yet available in your location. If you’re not operating from one of the approximately three dozen approved countries, you can only accept PayPal or manual payment methods (like check or money order) that you arrange separately with your buyers.

Etsy Payments allows you to accept credit and debit cards, Etsy gifts cards and credit, PayPal (pre-integrated), a few bank transfer services, Apple Pay, and Google Pay. Shopify Payments offers similar options but adds Amazon Pay and Shopify Pay to the mix. Meanwhile, Etsy Payments does allow you to accept a few more currencies than Shopify Payments (Danish or Norwegian krone, anyone?).

Below is a quick look at the processing fees for Shopify Payments versus Etsy Payments (shown in USD). As you’ll see, Shopify Payments it the better processing deal, especially as you climb the subscription ladder. Of course, you need to factor this into the larger picture of costs we discussed earlier.

Shopify Payments:

  • $9 Lite Plan
    • 2.9% + $0.30 Online (including manual entry)
    • 2.7% In-Person
  • $29 Basic Plan
    • 2.9% + $0.30 Online
    • 2.7%  In-Person
  • $79 Shopify Plan
    • 2.6% + $0.30 Online
    • 2.5% In-Person
  • $299 Advanced Plan
    • 2.4% + $0.30 Online
    • 2.4% In-Person

Etsy Payments:

  • 3% + $0.25 Online
  • In-Person (with Square integration only):
    • 2.75% Swiped/dipped/NFC
    • 3.5% + $0.15 for manually-entered online transactions
    • + $0.20 for any Square product not synced with your Etsy store

An “in-house” payment processor can really streamline this aspect of your business, so it’s nice that both platforms offer one. Neither is a 100% perfect processor for everyone, as you’ll see when we discuss user reviews later. Nevertheless, Shopify Payments comes out ahead because it offers better rates, more payment methods for shoppers, and a native system for in-person transactions. Plus, if Shopify Payments doesn’t work for you, you’ve got plenty of other gateways from which to choose. Not so with Etsy.

Customer Service & Technical Support

Winner: Shopify

This particular contest was closer than I expected. Both platforms offer 24/7 email and phone support, but Shopify adds a third contact channel via 24/7 live chat. That’s really the main reason for Shopify’s win here. I know a lot of online sellers prefer this option over email and phone, since it works like a nice blend of the two. Etsy does offer a callback option when waiting on hold, which is very handy. On the flip side, I’d like to see Etsy’s contact number and ticket system more easily accessed from the help center page — it’s much too buried for my taste at the moment.

While both platforms also offer great self-help resources such as blogs, forums, knowledgebase articles, and videos, the information for Etsy sellers is mixed in with support resources for Etsy shoppers. This can feel a bit cluttered and confusing at times.

I will say that Etsy does go beyond the support of a typical ecommerce platform in a unique and specific way. As a marketplace that gathers lots of merchants together in one place, sellers are automatically part of a built-in community. There’s even an opportunity to join Etsy Teams — groups of sellers in the same location, selling the same types of products, or with other unifying aspects to their stores. Some teams even meet up in real life or organize special events together. While Shopify users can tap into the strong community of developers and merchants offering mutual support in forums, the overall camaraderie can’t compete with Etsy’s community vibe.

You also may have more access to seller protections as part of a marketplace, but this can heavily depend on the specific situation. Etsy aims to look out for its shoppers as well!

User Reviews

Winner: Tie

Because Etsy is a marketplace full of buyers as well as sellers, buyer complaints abound. When something goes wrong with a sale, it’s more accessible and more public for a shopper to point a finger at Etsy than the actual seller, even when the seller was primarily at fault. Shopify mostly operates behind the scenes from a shopper’s point of view, so it’s easier to isolate feedback about the platform that’s specifically from store owners.

For these reasons, Etsy’s reputation on review sites can be skewed quite negatively, so I can’t make a truly fair comparison with Shopify. Nevertheless, I’ve teased out some seller-specific feedback, just so you can get an idea of the common threads that appear.

First, the good. Not surprisingly, Etsy sellers like how easy it is to set up shop. They enjoy access to an existing customer base and the effective site search tools that make it easy for shoppers to find their products. Some users have mentioned their positive experiences with Etsy’s customer service, and the help they’ve received resolving disputes with customers (or even other sellers).

Of course, some Etsy sellers mention bad experiences with customer service, saying the marketplace isn’t taking enough responsibility for regulating seller behavior. I found several complaints that Etsy gets away with being a “neutral” party, shifting blame to its users on either end of transactions. At the very least, people are confused about Etsy’s role.

Other Etsy shop owners contend that the marketplace is too saturated with similar sellers, and that competition is simply too tough to sustain their shops. Still others have issues with payments or chargebacks or claim their shops were suddenly closed without warning. I’ve also seen plenty of sellers lament the increase in Etsy transaction fee from 3.5% to 5% in mid-2018 — that wasn’t so popular.

On the Shopify side, the top accolade is typically its ease of use. Sellers also like the opportunity to add functionality and scale their stores using add-ons from the app store. Shopify’s web design is highly praised, especially among those who appreciate the ability to easily customize their sites without code.

Like with Etsy  — and many other large software companies — Shopify’s customer support receives mixed reviews. Other common Shopify complaints include the added cost of integrations and the extra transaction fees if you can’t use Shopify Payments. Sellers do sometimes have problems with the payment system itself as well — their funds were held, or their Shopify Payments accounts were terminated due to various factors.

If that all sounds a bit scary, understand that a lot of the problems that pop up for Etsy and Shopify are common across the ecommerce world. The good news is that the research you’re doing now will help protect you against some of the more avoidable issues!

Security

Winner: Tie

Etsy and Shopify are both PCI complaint systems, offering site-wide SSL certificates for data encryption. If that all sounded like nonsense and jargon, don’t worry. You should know, however, that part of the reason Pattern websites meet security requirements set out by the data regulatory folks is that your shoppers are directed back over to Etsy checkout pages to complete their transactions. This kind of ruins the illusion that your site was actually your own site, but it does at least help with security. With Shopify, your customers can check out directly on your site with the same level of security in place.

Final Verdict

Winner: Shopify

 

Shopify won this battle handily, coming out ahead in most of our individual comparison categories. And yet, I’ll be the first to admit that the one-sidedness of our comparison does not do the key selling points of Etsy justice. The main advantages to Etsy — the ability to get a shop up and running quickly on a shoestring budget, and built-in access to the traffic of an entire online marketplace — are absolutely huge for beginning sellers. If you’re not ready to go whole-hog into selling online and would prefer to test the waters first, Etsy is definitely the way to start. For first time sellers, it’s akin to setting up your craft booth at an established craft fair, versus plopping your stall on a street corner in the middle of nowhere.

This is all to say that Shopify only really wins if you’re ready to take responsibility for maintaining and drawing traffic to your own website. You’ll need to learn and implement an effective SEO and marketing strategy, for example. This is no small feat for the budding online seller and should not be taken lightly. If done well, however, any customers you obtain are your own, and this is the big reward that accompanies your efforts with Shopify. Your sales and growth will not be limited by super-direct competition with other sellers within a marketplace. You’ll completely sidestep this major downside to Etsy.

When we start talking about actual ecommerce features and web design, Shopify is a more powerful ecommerce tool. Specifically, we’ve seen that Etsy’s Pattern software can’t compete with the standalone storefront-building capabilities of Shopify. For most sellers who are ready to launch their own websites, I’d suggest skipping over Pattern and heading for Shopify. Yes, a Pattern subscription is cheaper than Shopify, but it seems like too much of an intermediate, half-way step that won’t get you fully where you want to go. Besides, there’s no reason you can’t keep your Etsy shop open in the meantime as you grow your Shopify-based store — and, you could ultimately connect an app to sync up your inventory between the two. Etsy could then become one marketing channel of many for your main online store’s top products. Something to consider!

I think if you’ve made it this far, you’re probably ready to at least test the capability of Shopify with a free 14-day trial. Of course, if you’re already an Etsy seller, you can also play around with Pattern’s tools for free before even connecting a domain and going live with your site. Since you’ve got nothing to lose with either platform in that respect, why not set up your own mini-showdown between Pattern and Shopify?

Let us know how it goes in the comments. Happy artsy, craftsy, or artsy-craftsy selling!

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Pros And Cons Of Debt VS Equity Financing

No matter what type of small business you operate or how long you’ve been in business, there comes a point when all business owners need extra capital. From paying startup costs before you open your doors to growing your business and boosting your profits with an expansion, you need capital.

Most small business owners don’t have pockets deep enough to cover all expenses themselves. Instead, these entrepreneurs seek financing from outside parties to fund their startup, pay for expansion, or even cover day-to-day operating costs when money is tight.

If you’re a small business owner who needs extra capital, there are two main types of financing to consider: debt financing and equity financing. Both types of financing provide funding for your small business, but which is right for you?

In this post, we’ll break down the differences between debt financing and equity financing. We’ll look at how each type of financing works, discuss the benefits and drawbacks, and talk about which is the best choice for your business. By understanding how debt and equity financing differ, you’ll be able to make the most informed financial decision for your business.

Let’s get started.

What Is Debt Financing?

Debt financing is pretty much what most people think about when they hear the word “financing.” With debt financing, a lender provides you with the capital you need for your business. Over time, you’ll repay the lender the money you’ve borrowed, plus interest.

How Debt Financing Works

How does debt financing work? It’s quite simple to understand, actually. As we mentioned above, debt financing occurs when a lender charges interest and/or fees to give you the capital you need. The money you borrow, plus these additional charges, are paid back over a set period of time, which could be weeks or even years.

But now let’s take a more detailed look at debt financing. You’ll apply to receive money from a lender. This could be your bank, credit union, a non-profit organization, an alternative lender, or other individual or company that provides your business with capital. You may receive a lump sum, or you may have a more flexible revolving form of credit, which we’ll cover in more detail a little later.

Your lender will consider a few factors to determine if you qualify for financing. These factors vary by lender but could include:

  • Personal Credit Report & Score
  • Business Credit Report & Score
  • Annual Revenue
  • Time In Business

Your lender may use a combination of these factors and/or additional factors to figure out whether you qualify for financing at all, and if so, determine your total borrowing amount and the rates and terms of the loan.

Over time, you will pay back the amount of money borrowed, in addition to any fees or interest charged as agreed upon between you and the lender. Once you have paid back the principal (your borrowing amount) plus the lender’s fees and interest, there are no additional steps to take. You can certainly apply for additional financing, but you are not obligated to do so.

One thing to be aware of is that some types of debt financing are secured with collateral. For most lenders, business assets are acceptable forms of collateral, although personal property and assets may also be used. If you default on your agreement — that is, you do not pay back the borrowed amount plus interest and/or fees within the agreed-upon time frame — the lender has the right to seize this collateral to pay off the debt.

However, even if you’ve put up collateral for a loan, the lender does not hold a stake in your business. This is what sets debt financing apart from equity financing, which we’ll cover a little later.

Types Of Debt Financing

There are multiple types of debt financing to consider if you opt to go this route. The type of financing you select will depend on your specific circumstances. Let’s take a look at a few of the most common types of debt financing.

Loans

Loans are what most people think of when discussing debt financing. A loan is a lump sum of money given to you that is repaid over a set period of time. A long-term loan is paid back over several years; this is the type of traditional funding you would receive from your bank or through a Small Business Administration program. These loans are best for larger business purchases, such as equipment or commercial real estate and are typically only available to those with good credit and established businesses.

Short-term loans offer quick cash to borrowers with less ideal credit and time in business qualifications and (as the name would suggest) are repaid over a shorter period of time. These products are best for smaller purchases, such as supplies and inventory, or to cover an emergency expense.

Lines Of Credit

Lines of credit offer a more flexible financing option. With a revolving line of credit, you’ll be able to make multiple draws against a credit limit set by your lender. As you repay your principal, interest, and fees, funds will become available to use again. You can withdraw up to and including the credit limit through one or multiple draws. Once you initiate a draw on your line of credit, the funds are sent to your bank account, where you can access them in as little as one business day. Lines of credit are particularly useful for emergency expenses or working capital.

Business Credit Cards

A business credit card works just like a personal credit card. Your lender sets a credit limit, and you can make purchases with the swipe of a card anywhere credit cards are accepted. You’ll repay any funds used, in addition to any interest charged by the lender. Interest is applied only to the borrowed portion of funds. Business credit cards can be used to purchase supplies or inventory, pay for unexpected expenses, or to set up recurring payments (utility bills, etc.).

Accounts Receivables Financing & Invoice Factoring

Accounts receivables financing — or invoice financing — uses your unpaid accounts receivables as collateral for a line of credit. Invoice factoring is also an option. This is when you receive a lump sum of money up front for your unpaid invoices. Once the invoices are paid, you receive the remaining amount owed to you, minus any fees charged by the lender. Both are good options to improve cash flow that has slowed due to unpaid invoices.

Debt Financing Pros & Cons

Debt financing certainly has its benefits, but there are drawbacks you must consider as well. Let’s take a closer look at the pros and cons of this type of financing:

Pros

  • You Retain Business Ownership: With debt financing, your ownership interest is not diluted. This means that you won’t have to share your profits over the long term.
  • Multiple Options Available: From flexible lines of credit to long-term loans that give you a lump sum of cash, you can find debt financing for any situation.
  • Planning Ahead: With debt refinancing, you know exactly when to pay, how long you’ll be paying, and the amount of each payment.
  • Tax Benefits: Interest for your financing can be used as a deduction on your income tax return.
  • Availability: Debt financing options are available to almost all businesses, regardless of factors such as size, industry, time in business, or business or personal credit history.

Cons

  • Interest & Fees: Even borrowers with the highest credit scores and most profitable business have to pay interest and/or fees for borrowing. Borrowers that are seen as “risky” by lenders face even higher costs.
  • Taking On Debt: True to its name, debt financing means you are taking on debt. This raises your DTI ratio, making your business look like a bigger risk to investors and lenders.
  • Risk Of Default: Even the well-intentioned borrower can fall upon hard times and miss a payment. Months of hardships can lead to default, which puts your collateral and credit score at risk.
  • Difficult Borrowing Requirements: Even though there are many debt financing options, you may not qualify for the product you need. For example, if you have a low credit score, short time in business, or low annual revenues, you may only qualify for smaller short-term loans or lines of credit. This could pose a problem if you’re looking to borrow a larger sum of money for a longer period of time.
  • Potential Restrictions: Some lenders impose restrictions on how funds are used. If you want more flexibility than what one lender is offering, you have to find another lender … or consider equity financing.

What Is Equity Financing?

With equity financing, you can also receive the capital you need for your business. However, instead of borrowing money that you repay with interest, an investor provides the capital in exchange for ownership interest in your business.

How Equity Financing Works

Equity financing is significantly different from debt financing. Instead of seeking a lender, you’ll look for an outside investor. That outside investor will provide you with capital in exchange for shares in your company. The investor then has an ownership stake in your company.

You will not have to make regularly scheduled payments to your investor as you would with a lender. Instead, the investor will take a share of your profits as your business becomes successful. The investor will also have some control within your company, including the power to make decisions.

Let’s look at an example of how equity financing works:

You invest $700,000 in your new business. An investor is willing to invest $300,000. You agree to a price of $1 per share. Your business now has $1 million in capital. You control 70% of the shares, but the investor has purchased 30% of your business.

Types Of Equity Financing

Does equity financing seem like a smart financial move for your business? Before you get started, there are several different types of equity financing to consider.

Venture Capitalists

Venture capitalists (VCs) are willing to invest millions of dollars in companies that have the potential for high returns. Therefore, most small businesses would not be of interest to VCs. However, promising tech and innovation startups could benefit from the equity financing offered by VCs. VCs use money that is pooled from sources, including investment companies, corporations, or pensions. It is rare for a VC to use their own money for investment.

Angel Investors

Angel investors, like VCs, are willing to invest money in promising businesses and startups. However, angel investors are a little different because these are accredited investors who use their own money for investments. An angel investor may be someone you don’t know, or it could even be a friend, family member, or colleague who has a high net worth and annual income.

Mezzanine Financing

Mezzanine financing combines traits of both debt and equity financing. Your business takes a loan and agrees to repayment terms. If you are profitable, you retain ownership of your business. If your business is not successful, the lender is able to convert the loan into equity interest, giving claim to future profits.

Crowdfunding

The internet has made it easier than ever for small businesses to raise capital. With crowdfunding, you can make your pitch to the public to raise capital for your business through an online platform. While some businesses promise rewards in exchange for investments, such as a new product for free or at a reduced price, others use equity to bring in investors. Learn more about the best equity crowdfunding sites.

Equity Financing Pros & Cons

Similar to debt financing, equity financing has benefits and drawbacks to consider. Take a look at these pros and cons to determine if equity financing would be the smartest financial move for your business.

Pros

  • Investors Take On Risk: With equity financing, the risk falls primarily on the investor. Investors only see their returns if your business is a success.
  • Good For New Businesses: If you’re a brand new business with no revenue, equity financing could be the best option for you. While you may qualify for debt financing, you’ll likely be stuck with low borrowing limits and less-than-desirable rates and terms.
  • No Interest Or Fees: With equity financing, you won’t have to worry about paying interest and/or fees on a loan or other financial product. This gives you more money to invest in your business.
  • Investors Bring More To The Table: The right investor brings more than just capital to the table. You can gain industry knowledge, meet new connections, and gain experience that you wouldn’t receive by working with a lender.

Cons

  • Giving Away Ownership: With this type of financing, you’re giving away ownership in your business. Not only does this reduce your share of profits, but it also gives outside parties the power to make decisions surrounding the operations of your business.
  • Finding Investors Is Difficult: Finding one or more people willing to invest in your business can be a difficult and time-consuming process. If you need money quickly or with little effort, equity financing is likely not the right option for you.

Debt VS Equity Financing

As you can see, there are very clear differences between debt and equity financing. With debt financing, you simply have to meet the criteria of a lender in order to receive money. Depending on the type of financing you seek, you could have the capital you need in as little as 24 hours. In exchange for this capital, you pay the lender back as agreed. You take on all the risk, so if your business fails, you may lose your assets or face legal action.

Additionally, with debt financing, you don’t have to worry about drawing up legal paperwork. Apply for your loan, submit the required information and documentation, and the lender will provide you with money if you qualify. You retain full ownership of your business.

On the flip side, equity financing could take some time. It is up to you to find the right investors willing to work with your business. Drawing up legal paperwork will be part of the process as well.

While you don’t have to pay your investor back over the short-term, the lender will recoup their money if your business is successful. Because they will own part of the company, they will be able to take their share of the profits and make important decisions about your business along the way.

The risk is on the lender. If your business is successful, the lender gets their capital plus a return. If your business is unsuccessful, you will not be indebted as you would with debt financing.

Which Type Of Financing Is Best For Your Business?

The type of financing you select depends upon the specific financial needs of your business. If you’re still on the fence, consider why you need capital, how you envision your business in the future, and these additional factors to determine whether to choose debt financing or equity financing:

Choose Equity Financing If…

  • You picture your business growing to a global or national scale
  • You have larger capital needs that wouldn’t be satisfied through debt financing
  • You’re willing to give up some control over your business in exchange for equity
  • You’re looking for more than just money, i.e. industry connections and experience
  • You’re willing to put in the work to pitch to investors
  • Your capital needs aren’t urgent

Choose Debt Financing If…

  • You have smaller capital needs
  • You need capital but don’t want to give up ownership interest in your business
  • You’re willing to take on risk, including losing assets if you fail to repay your lender
  • You need financing quickly

If debt financing seems like the right option for you, give Lendio a try.

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Lendio is a loan aggregator that has over 75 financing partners ready to serve small businesses just like yours. Through Lendio, you can reach these lenders and receive multiple offers with just one application.

No matter what your financial needs, Lendio has a financial product for you. Through Lendio, you can apply for Small Business Administration loans, short-term loans, equipment financing, commercial mortgages, startup loans, and more. Total borrowing limits, interest rates, and repayment terms vary by lender and financial product.

Final Thoughts

There are many ways to get capital for your business through debt financing or equity financing. However, it’s very important that you weigh out the pros and cons and consider the specific needs of your business before moving forward. While your capital needs may be urgent, it’s critical to look at the long-term picture to determine what type of financing will most benefit your business.

The post Pros And Cons Of Debt VS Equity Financing appeared first on Merchant Maverick.

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How To Choose An Equipment Leasing Company

Selecting equipment
One of the most common expenses a business can encounter is the need to purchase or upgrade equipment, but choosing an equipment leasing company can be a challenge. Choosing one that will give you a good deal that fits the specific needs of your company can be downright daunting.

Don’t know a TRAC lease from a leaseback? A tax lease from a synthetic lease? Not sure where to start looking? The equipment leasing industry’s websites are notoriously full of opaque, specialized terms … and that’s when specific terms are offered at all.

We’ll try to demystify the process below, and hopefully put you on the right track.

Financing Need Best Product Type Recommended Lender
Financing Platform Any Currency Capital
Equipment Purchasing Loan Lendio
Renting Operating Lease Crest Capital
Big Ticket Items Any TCF Equipment Financing
Purchasing w/Lease Capital Lease CIT Direct Capital

Find A Lessor Who Will Work With You

The easiest way to rule out a potential lessor (the company that finances the lease) is to see if they serve your industry. Most lessors, particularly those that work with resales, specialize in specific industries. Even the least transparent lessors tend to be upfront about the industries they’re able to finance, so it’s not a bad place to start. If possible, you’ll also want to see if they finance the specific type of item you’re looking for.

Next, you’ll want to take stock of your own profile as an applicant. How good is your credit? How long have you been in business? What’s your revenue? How much debt have you taken on?

Lessors don’t always advertise their minimum qualifications. Since your time is limited and valuable, if you have reasonable doubts about your ability to qualify with a particular lender, I would recommend prioritizing more transparent lenders. You don’t want to waste time filling out a long application only to be rejected. To save yourself some headache, take advantage of online screening/pre-qualifying tools the lessor might offer.

Choose The Right Leasing Arrangement

This is where it gets a little complicated.

Because you’re dealing with a tangible asset, when making a deal with a lessor, you’ll need to be prepared to work through an enormous number of lease variations covering different possible ownership arrangements.

The simplest leases function as loan replacements. That is to say, the lessor finances your equipment, which you are considered to have ownership of either immediately or by the end of the lease. You’ll make regular payments, typically monthly, for the length of your lease, at the end of which you’ll pay a small residual fee to close it out. These are called capital leases.

Why would you want a capital lease instead of a straightforward loan? While the interest rate is usually higher than it would be with a comparable loan, a capital lease covers the full cost of the equipment you’re buying and, very often, associated transportation and installation costs as well. These leases also tend to be easier to get than traditional loans.

But what if you don’t want to own the equipment long-term?

In that case, you may want to look for an operating lease. Operating leases are more like rentals with the option to buy. The lessor will retain official ownership of the asset, but you’ll have possession of it for the length of the lease. At the end of the term, you’ll have the option to return the equipment to the lessor or purchase it for a residual — typically fair market value (FMV).

There are a huge number of variations on both operating and capital leases, as well as tax advantages and disadvantages to both which you should discuss with an accountant. But generally:

  • If the equipment you’re considering will not become obsolete quickly and you’d like to own it, choose some form of capital lease.
  • If the equipment you’re considering depreciates quickly or becomes obsolete within a couple years, you probably want an operating lease.

Once you know what type of lease you want, you can narrow down your list of eligible lessors.

What About Equipment Loans?

Nothing wrong with them! If you’re looking at capital leases, you should also consider getting an equipment loan.

Equipment loans usually cover around 85 percent of the cost of the item, so be prepared to make a downpayment unless your lender specifies that they cover the full price.

One nice thing about equipment loans is that the purchase itself can serve as collateral (or security) for the loan, which means you’ll generally see lower interest rates than you would with an equivalent unsecured loan.

Check out our equipment financing resources if that sounds interesting.

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

Compare Rates & Fees

credit card processing fees image

While the ability to get financing is great, you don’t want to pay more than you have to for the pleasure. This is much easier when you’re dealing with transparent lenders who lay all their cards on the table.

What terms and fees should you be aware of when looking into an equipment lease?

  • Interest Rates: The biggest cost you’ll run into with financing should be the interest rate. Generally, lower is better, but make sure you know how often and in what way the interest rate is applied.
  • Origination Fee: Common with loans, but unusual with leases, this is a fee that’s applied upfront. In most cases, it is deducted from the amount of money you receive when you get your capital.
  • Administrative Fee: This can be rationalized in any number of ways by your equipment financer, but it is a fee charged for servicing your account. It may be charged once, or at specific intervals.
  • Downpayment: The percentage you’re expected to pay out of pocket towards the equipment you’re buying. Common with equipment loans. With leases, there generally isn’t a downpayment, but you may be expected to pony up the first and last month’s payment up front.
  • Monthly Payment: The amount of money you’re expected to pay each billing cycle, usually monthly. In the case of leases, the higher your payment, the lower your residual will be.
  • Residual: An amount leftover at the end of your lease that you pay if you decide you want own your equipment. The lower your residual, the higher your payments will be.

The Best Equipment Leasing Companies

Not ready to build a spreadsheet comparing every equipment leasing company on the market? No worries. We can get you started.

Note that you’ll also want to consider leasing from banks or credit unions with which you’ve already built a relationship, as many times they can offer you the best rates (assuming you make the credit cut). If you’re dealing with a major brand, you may also want to consider working with a captive lessor.

Lendio

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One of the most efficient ways to seek equipment financing is through an aggregator service like Lendio. With one application, you’ll effectively have access to Lendio’s 75+ affiliates.  One nice thing about this service is that it’s free on the borrower’s end, so you’ll only have to worry about fees charged by the company Lendio ultimately connects you with.

Be aware that, although Lendio can work with customers with credit as low as 550, for equipment financing you’ll usually need to have a credit rating over 650.

For those who successfully apply, Lendio’s partners will finance the full cost of your equipment.

Currency Capital

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Another aggregator option for equipment financing is Currency Capital.

While online lenders have taken great pains to streamline application processes for working capital loans, equipment financing tends to be more traditional. Currency set out to change that, developing an API they compare to Amazon’s 1-click shopping experience.

Getting setup with Currency is a bit more laborious than, say, working with Lendio, but if you’re thinking ahead to future purchases, it may be worth the investment.

Crest Capital

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Want to skip the middle men? Check out Crest Capital.

Crest deals in just about every kind of lease you could think of, whether you want to own your equipment or just operate it for a little while. Additionally, they’re able to work with a wide variety of industries including agriculture, manufacturing, automative, and medical, as well as office equipment and software.

You will need to have been in business for at least two years, however, and have a credit rating of 650 or better.

TCF Equipment Finance

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TCF Equipment Finance, as the name implies, is the equipment financing and resale wing of TCF Bank. As a bank, their lending practices are as conservative as their pockets are deep. That means TCF is a good solution for mature businesses with excellent credit.

TCF offers many variations on capital and operating leases and works with most industries.

CIT Direct Capital

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Another good option for those with solid credit ratings is CIT Direct Capital. Their equipment financing division doesn’t have quite as broad a variety of lease types of some of the other options here, but it’s easier to meet their qualifications than those of many banks.

Both capital and operating leases are offered.

Final Thoughts

Between the hundreds of equipment leasing companies out there and the often strict qualifications needed to get financing, it can be a challenge to find a lessor who meets your needs. Hopefully you now have a better sense of what to look for when choosing an equipment leasing company.

Having trouble meeting the high lending standards for equipment financing? Don’t panic! Many other types of financing can be used to purchase equipment. For smaller items you can pay off quickly, you may want to consider a business credit card. For larger items, check out installment loans.

The post How To Choose An Equipment Leasing Company appeared first on Merchant Maverick.

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Paypal’s Credit Cards VS PayPal’s Debit Cards

While PayPal may be best known for its online payment processing system, it also offers a range of credit and debit cards.

PayPal offers a rewards card and a couple of cards with cash back rewards, as well as a simple debit card and a prepaid card. Each offering in the PayPal stable provides a unique option, though only one of these is specifically aimed a business use. However, PayPal’s other options can certainly be used by businesses.

If you’re a business owner looking for a new credit or debit card, there’s a chance PayPal has what you’re looking for. But which one is right for your business? Find out below by reading our in-depth breakdown!

PayPal Cards Quick Comparison

Card Card Name Type Annual Fee Rewards

PayPal Extras Mastercard

Rewards $0
  • 3 points per $1 on gas and restaurant purchases
  • 2 points per $1 on PayPal and eBay purchases
  • 1 point per $1 on all other purchases

PayPal Cashback Mastercard

Cash Back $0
  • Unlimited 2% cash back on all purchases

PayPal Business Debit Mastercard

Debit $0
  • Unlimited 1% cash back on eligible purchases

PayPal Cash Card

Debit $0
  • None

PayPal Prepaid Mastercard

Prepaid $4.95 monthly fee
  • Occasional special offers and cash back rewards

PayPal Extras Mastercard: Credit Card For Earning Rewards Points

PayPal Extras Mastercard



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Annual Fee:


$0

 

Purchase APR:


21.99% – 28.99%, Variable

If you’re keen for a rewards-centric card, PayPal offers the Extras Mastercard. This card is aimed at those who frequently shop at PayPal-accepting merchants and on eBay and offers bonus rewards for gas station and restaurant purchases.

This personal credit credit features three reward tiers:

  • 3 points per dollar spent at gas stations and restaurants
  • 2 points per dollar spent on PayPal and eBay purchases
  • 1 point per dollar spent on everything else

When you get your points, you’ll be able to score some awards. Every 6,000 points, you can choose to redeem for a $50 credit to your PayPal balance. You can also redeem points for airfare, hotel stays, car rentals, vacation packages, gift cards, or merchandise.

As a bonus, this card carries no annual fees, although you will have to pay transaction fees when traveling abroad and the APR is higher than the industry standard.

Want all the details? Check out our full PayPal Extras Mastercard review.

PayPal Cashback Mastercard: Credit Card For Cash Back

PayPal Cashback Mastercard



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Annual Fee:


$0

 

Purchase APR:


21.99% – 28.99%, Variable

PayPal also boasts a card with a simple reward scheme in the form of the Cashback Mastercard. This card features a straight 2% cash back across all purchases. That’s it—there are no quarterly category rotations or awkward reward rates to worry about.

This is actually one of the few credit cards on the market to rock a 2% cash back rate. This flat rate can make it an appealing choice for businesses that shop across a wide array of categories.

You’ll be able to redeem your cash back at any time in the form of PayPal balance cash. This is especially handy if you shop anywhere that accepts PayPal; however, if you intend to use your rewards elsewhere, you will have to manually transfer the balance into your bank account.

Like with the Extras Mastercard, this card has no annual fee. It also lacks a foreign transaction fee — a bonus for businesses that require international travel. However, it does include a higher-than-average APR.

If you’re curious about all this card has to offer, visit our complete review of the PayPal Cashback Mastercard.

PayPal Business Debit Mastercard: Debit Card For Instant Access To Your Business PayPal Account

PayPal Business Debit Mastercard



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Annual Fee:


$0

 

Purchase APR:


N/A (this is a debit card)

Beyond regular credit cards, PayPal also offers debit cards. The first of these is designed specifically to work with your Business PayPal account.

Unlike a credit card, you don’t need a credit check to receive the debit card. You also don’t need to worry about potentially paying an APR because the card simply draws from your available PayPal balance. However, you won’t be able to build up credit when using this card.

As an added bonus, PayPal gives an unlimited 1% cash back every month on eligible purchases. Purchases eligible for cash back include (but aren’t limited to) those processed as credit transactions. PIN-based transactions won’t qualify.

When buying abroad, you will be subject to a 1% foreign transaction fee. When compared to some credit cards, this fee is relatively low. However, businesses with frequent overseas travel may want to look into travel-specific credit cards.

You’ll also be able to withdraw cash via ATMs worldwide, although there is a standard $1.50 withdrawal charge. PayPal lets users request additional cards — this is handy if you’re looking to give employees debit cards. In partnership with Mastercard, there’s a zero liability policy which will help you against fraud-related charges. On top of all this, there are no annual or monthly fees to bother with.

PayPal Cash Card: Debit Card For Instant Access To Your PayPal Account

PayPal Cash Card



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Annual Fee:


$0

 

Purchase APR:


N/A (this is a debit card)

If you don’t have a Business PayPal Account, PayPal offers a Cash Card for personal accounts.

Just like their business alternative, this is simply a debit card and is usable wherever Mastercard is accepted. You won’t need a credit pull while applying nor will you have to worry about paying interest. However, it won’t help you build credit.

Unlike their Business Debit Mastercard, PayPal’s Cash Card does not feature any sort of reward scheme. That means this card is just for paying and withdrawing cash—you won’t be saving money using it.

It’s not possible for extra cards to be requested on the same account. Because of this, you’ll need employees to have their own PayPal accounts or go a different route entirely.

Despite those negative points, you will have protection from fraudulent charges on this card thanks to PayPal and Mastercard’s zero liability program. You also won’t be subject to annual or monthly fees like you might with some credit cards. There is, however, a 2.5% foreign transaction fee and a $2.50 withdrawal fee for ATMs outside the MoneyPass ATM network.

PayPal Prepaid Mastercard: Prepaid Card For Controlled Spending

PayPal Prepaid Mastercard



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Monthly Fee:


$4.95

 

Purchase APR:


N/A (this is a prepaid card)

PayPal’s final offering comes in the form of their Prepaid Mastercard. This reloadable card is accepted anywhere a Debit Mastercard would be accepted. That includes in-store purchases and orders over the phone or Internet.

You’ll be able to request a card without needing a credit check. Because it’s prepaid, you also don’t have to worry about any sort of interest. However, just like with the PayPal debit cards, using this prepaid card won’t enable you to improve your credit score. There is also a $4.95 plan fee due monthly.

To reload this card, you can use your PayPal balance. You can also top up at over 130,000 NetSpend Reload Network locations across the country. Additionally, there’s a direct deposit option that enables users to have paychecks, government benefits, and tax refunds directly deposited to a card’s account.

Beyond the card’s standard features, PayPal provides occasional rewards for using the Prepaid Mastercard. These rewards come in the form of money-saving offers based on your shopping history. You can also open an optional tiered-rate Savings Account through The Bancorp Bank and earn up to 5% Annual Percentage Yield (APY) for balances up to $1,000.

As another reward bonus, the PayPal Prepaid Mastercard features a refer-a-friend program. This program will give you $5 for every friend you get to sign up for the card and load $10 onto it.

Alternatives To PayPal’s Credit Cards

Don’t like PayPal? There are a few other options available. Here are Merchant Maverick’s favorite alternatives to PayPal credit cards:

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


18.24% – 23.24%, Variable

Chase’s premier business rewards card is their Ink Business Preferred offering. This card is geared towards businesses focused on travel, but it has plenty of other perks, too.

You’ll collect three points per dollar spent (up to $150,000 combined) on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines each account anniversary year. Everything else nets one point per dollar.

Points can be redeemed for 25% more value when you book travel through Chase Ultimate Rewards. There are also 80,000 bonus points handed out once you spend $5,000 in your first 3 months. Do note, however, that this card carries a $95 annual fee.

For more details, check out our complete Chase Ink Business Preferred review.

Capital One Spark Cash For Business


capital one spark cash select
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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

For cash back, it’s hard not to like Capital One’s Spark Cash for Business. Like the PayPal Cashback Mastercard, this card doles out an unlimited 2% cash back on all purchases.

It also features a welcome offer—something not included with either of PayPal’s cards. With Spark Cash, you’ll collect a $500 cash bonus after you spend $4,500 on purchases within your first 3 months. And because it’s aimed at businesses, employee cards can be requested for free.

There is a $95 annual fee to consider, but Capital One waives it your first year. If you’re looking for a cash back card with no annual fee, Capital One also offers their Spark Cash Select with an unlimited 1.5% back.

Want the complete Spark Cash breakdown? Read the full deets with the Merchant Maverick review.

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

Chase also offers a cash back card with their Ink Business Cash. Unlike either the PayPal Cashback Mastercard or the Capital One Spark Cash for Business, this is a cash back card with a tiered reward scheme.

You can expect a whopping 5% back when you make purchases at office supply stores and on internet, cable and phone services (up to a combined $25,000). You’ll also nab 2% back when buying at gas stations and restaurants (also up to a combined $25,000). All other purchases collect 1% back.

The welcome offer grants you $500 bonus cash back after you break $3,000 on purchases in your first three months. You also won’t have to worry about interest for the first 12 months thanks to the card’s 0% introductory APR on purchases and balance transfers. Plus, there’s no annual fee to boot.

Get the full look at the Chase Ink Business Cash by reading our in-depth review.

Final Thoughts

For a business looking to get a new credit card, PayPal offers two good options. Their Extras Mastercard is a solid selection if your business frequently shops in one (or more) of the bonus categories. The Cashback Mastercard, on the other hand, is an excellent tool for businesses that don’t match up with the bonus categories of the Extras Mastercard.

If your business isn’t in the market for a credit card, but you still want to be able to swipe plastic with your PayPal account, the Business Debit Card is a great option. With easy access to PayPal funds, the ability to request additional cards, and 1% cash back, this debit card is a simple and obvious addition to any Business PayPal account.

The personal debit cards, meanwhile, might be best suited for employee personal accounts. They just don’t offer enough advantages compared to the Business Debit Mastercard. Instead, they might work best if an employee is looking for an alternative or something in addition to their bank account.

Regardless of whichever route you choose, PayPal has numerous card options for businesses looking to get more out of their PayPal account. Curious about using PayPal to accept payments? Check out our review of PayPal’s payment processing platform. If you’re considering a loan in the near future, learn more about PayPal’s Working Capital program.

The post Paypal’s Credit Cards VS PayPal’s Debit Cards appeared first on Merchant Maverick.

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Want To Open Your Own Bar? Top Tips To Get You Started

Have you ever looked around your local bar and thought, “I could run a place like this”? For many, it’s easy to get caught up in the excitement of potentially opening a bar, but for a select few, this is more than just a fleeting idea. These aspiring entrepreneurs want to make this dream a reality.

Opening your own bar or sports pub seems like a fun and exciting experience. After all, who doesn’t love gathering with friends and family to watch the big game with a cold drink in hand and appetizing snacks on the table? Behind-the-scenes, though, it’s a little different. While it may seem exciting to become a small business owner and call the shots, there’s also a lot of planning and work involved in starting a profitable business.

If opening a little corner pub sounds like a dream come true but you don’t know quite where to begin, you’re in the right place. In this article, we’ll share our top tips for starting the exhilarating and lucrative path to owning your own bar. We’ll go over what you need to legally open a bar, expenses to start and maintain your business, and the importance of a business plan. We’ll also help you decode one of the biggest pieces of the small business puzzle: getting financing for your new business.

If you’re ready to stop dreaming and start doing, keep reading!

Begin With Branding

bar nightclub pos systems

One of the first things you need to do before you take off running is to visualize a name, a theme, and an overarching concept for your bar. Do you picture yourself running a neighborhood pub where all of the locals gather? Or maybe you’d rather open a thriving nightclub where young club hoppers from around your city come to dance the night away?

Evaluate your different options, considering the type of patrons you’d like to attract as well as where you plan to open your bar. For example, if you want a younger crowd, a nightclub in a trendy part of town makes sense. If you want to attract an older, more sophisticated crowd, consider opening a wine bar, martini bar, or cigar bar in a thriving downtown area. You could also target sports fans by opening a sports bar or draw in foodies with a new gastropub.

Knowing what type of bar you want to open helps you plan out additional details. For example, if you’re opening a hot nightclub spinning the latest top 40 hits, country-western décor won’t fit your theme. If you want to draw in a sports crowd, loud music and fog machines probably won’t be on your list of supplies. Choosing the type of bar you want to open and nailing down your target audience first will help you accurately plan everything from the design and layout of your establishment to your name and logo.

Speaking of your bar’s name, it goes without saying that you’ll need one. Because it’s your bar, you’re free to name it anything you want. However, you want to make sure that you choose a name that reflects your concept. “John’s Neighborhood Bar” may incorporate your name, but it doesn’t stand out. When brainstorming ideas, think about the audience you want to bring in and pick a moniker that’s attention-grabbing — a name that lets customers know what to expect when walking through the doors of your bar.

Find A Location

One of the most important first steps in opening your own bar is choosing a location. There are a few options you have at this stage of the game:

  • Purchase an existing bar
  • Start from scratch
  • Buy a franchise

There are advantages and disadvantages for each option. If you purchase an existing bar, you inherit the existing clientele and may see immediate income. However, you could pay a steep premium if the bar is extremely successful at the time of sale. You may also rack up high costs if the bar doesn’t mesh with your vision and you have to pay for renovations.

If you start from scratch, you’ll be able to see your vision through from start to finish. However, it may take many months (or even a year or longer) to open your doors, and the costs can really rack up if you have to completely renovate a space or build a new bar from the ground up. With this option, careful planning, budgeting, and at least some knowledge of the bar and restaurant industry are needed for the highest chance of success.

Finally, you could purchase a franchise. This option could shield you from some of the mistakes you’d almost certainly encounter if you attempted to go it alone. However, you won’t be able to fully showcase your creativity with a franchise.

Finding a location takes planning and a dedicated eye on financials. Sure, putting your bar in a trendy and popular neighborhood could help your business become your city’s next hotspot, but real estate costs may be prohibitively high. Before you put down money on a location, make sure to do your market research and understand the costs.

Create A Business Plan

Every successful business starts with a solid business plan, and a bar is no exception. Not only will your business plan act as a blueprint for starting, operating, and growing your business, but it’s also a necessity if you plan to apply for business loans from a bank or other lender.

No two business plans are exactly alike, but there are some standard sections you should have in yours. This includes:

  • Executive Summary: Basic information about your business and why it will be a success
  • Company Details: Specific details about your business
  • Organizational Chart: Outline of your company structure
  • Marketing Strategy: How will you market your business?
  • Financial Projections: Show the financial outlook of your business

Your business plan should showcase the goals of your company and serve as a map for you to follow, keeping your business on the right path. Lenders will want to see a business plan that demonstrates thought, intelligence, research, and reasonable plans for success in the future.

Register Your Business

Before you open your bar and begin serving customers, you have to register your business. First things first: register the business’s name with your state. This can be completed via the county clerk’s office in the state where you’ll operate.

Next, you’ll need to determine your formal legal structure. Do you plan to be a limited liability company or a corporation? Your business structure will determine how much you pay in taxes, what paperwork needs to be filed with the government, and your personal liability. If you’re unsure of which structure is right for your new business, consult with an attorney, accountant, or business counselor.

Your business will also need to be registered with the state revenue office and the Internal Revenue Service. Because your business will have employees, you’ll be required to apply for an Employer Identification Number. You’ll also need a sales tax permit.

Finally, you’ll be required to obtain the proper licenses and permits to legally operate your business. Because your bar will serve alcohol, a liquor license is required. If your bar serves food, you’ll need a license from the health department. You can find out more about the requirements in your area by contacting your state Department of Commerce.

Obtain A Liquor License

In the previous section, we touched on acquiring the right permits and licenses. One of the most important things you need to open a bar — if not the most important thing — is a liquor license. This license makes it legal for you to sell alcohol in your business. This should be a top priority, as getting approval from your state’s Alcohol Beverage Control agency typically takes at least one month. In some cases, it may take up to six months to get approved.

The steps required to obtain your liquor license vary by state. In all states, though, you will be required to fill out an application. You may be required to submit additional documentation with your application, such as a certificate of incorporation, your proposed menu, and the certificate of title for your bar. You may also be required to pay a processing fee.

Once your application is reviewed and approved, you’ll have to pay for your license. Fees vary by state and range from a few hundred dollars to several thousand dollars. Your license will last for at least one year, and you must pay a fee when it’s time to renew.

Even though getting your liquor license is a hassle and can get very expensive depending on your state, this is a critical step that can’t be overlooked. To learn more about the process, fees, and type of license required for your business, contact your state ABC agency.

Seek Funding

Business licenses. A construction loan or lease. Renovations. You haven’t even stocked your bar, and the expenses are already piling up. Unless you’re already a successful entrepreneur with plenty of money in the bank, these expenses may seem completely overwhelming.

Very few small business owners have the resources to launch a business on their own. Instead, they turn to lenders for money to fund startup costs. Even after you launch your business, there will always be a need for more capital, whether an emergency has popped up, you need to expand, or a slow period has affected your day-to-day operations.

Even if your credit history is blemished, you’re a startup with no business history, or you face other challenges, there’s funding out there if you know where to look. Start with these options.

Personal Savings

Many new business owners have at least a little bit of money put away in their savings accounts. If you’ve been socking away pennies for a rainy day, now may be the opportunity to put these savings to use. By using your own money, you won’t be indebted to a lender (or at least not as much). You won’t have to worry about making scheduled payments, and there won’t be interest or fees to worry about. On the downside, if your business is unsuccessful, you lose part — or all — of your savings.

Loans From Friends & Family

If you have a friend or family member with extra money to invest, pitch them your business idea to see if they’re interested. But be careful! Even though you have a more personal relationship with this person, don’t just have a casual conversation asking to borrow funds. Instead, give them your business plan and present your pitch just as you would with a bank or other lender. Show them why you think your business will be a success, and give them a good reason to invest in you.

If you come to a loan agreement, get everything in writing, including the total borrowing amount, rates, and terms of the loan. Put your personal relationship aside and make sure you follow all terms of the loans just as a responsible borrower should.

Personal Loans For Business

Getting a startup loan from a bank or other lender can be tough. Sure, there are options, such as Small Business Administration loans, but these loans can be very difficult to receive — especially if you have a short time in business or low annual revenue. However, if you have a solid personal credit profile, more low-cost loan options are available to you.

Instead of going directly for a business loan, try applying for a personal loan for business. With a business loan, lenders consider your time in business, personal and business credit histories, and annual revenues. But with a personal loan, your personal credit score and income are used to determine if you qualify.

By going this route, you may be able to avoid many of the high fees and interest rates of alternative business loans. Depending on your credit history and the lender you select, your cost of borrowing could be much lower with a long-term, low-interest personal loan.

Recommended Option: Upstart

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You may qualify to receive a personal loan of between $1,000 and $50,000 through Upstart. These loans have competitive interest rates starting at 7.74% and going up to 35.99% based on your creditworthiness. Repayment terms of 36 or 60 months are available. The application process is quick, easy, and completely online.

To qualify for an Upstart personal loan, you must meet a few basic requirements, including having a valid email address, verifiable personal information, a source of income, and a U.S. checking account. You also have to meet the lender’s credit requirements, which include:

  • A credit score of 620 or above OR 580 or above for California residents
  • A solid debt-to-income ratio
  • No bankruptcies or public records
  • No delinquent accounts or accounts in collections
  • 6 or fewer inquiries on your credit report over the last 6 months

Lines Of Credit

A more traditional financing option is a flexible line of credit. The one drawback with a line of credit is that business performance is typically a qualifying factor. If you haven’t made any sales, you won’t qualify, so this isn’t a good financial option if you’re not in business yet.

As you build your business, though, a line of credit can be very useful. It can be used to purchase supplies, inventory, or cover that emergency that pops up when you least expect it. You can also use your line of credit to cover payroll or daily operational expenses.

When you receive a line of credit, a lender provides you with a credit limit. You can make as many draws as you need against the line of credit up to and including the credit limit. Once you initiate a draw, the lender will transfer the money directly to your bank account, giving you access to the money you need. Over time, you’ll make payments that are applied to the principal (the amount you’ve borrowed) and any fees and/or interest charged by the lender.

A line of credit is a revolving account, so as you repay the lender, money becomes available to draw again.

Recommended Option: Fundbox

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You may qualify to receive a line of credit of up to $100,000 through Fundbox. Fundbox lines of credit have no restrictions and can be used to cover any business expense. Once approved, you’ll be eligible to make draws immediately and receive funds as quickly as the next business day.

The Fundbox application process takes just minutes, and it’s easy to qualify. The lender focuses on the performance of your business — not your business or personal credit history — so even borrowers with credit challenges can qualify. You do, however, have to meet the following requirements:

  • Own a U.S.-based business
  • Have a business checking account
  • At least 3 months of transactions in your business bank account or at least 2 months of activity in a supported accounting software
  • At least $50,000 in annual revenue

Once you make a draw on your line of credit, automatic drafts are made weekly from your linked business checking account. If you do not use your funds, you do not pay. Repayment terms are 12 or 24 weeks and fees start at 4.66% of the total borrowing amount.

Business Credit Cards

Business credit cards work just like the personal credit cards in your wallet, only they’re used to pay business expenses. Business credit cards are great for emergency expenses or any time your cash flow is a little short. You can also make recurring payments, such as your utility bills, using a business credit card. This is especially beneficial if you have a rewards card that gives you cash back or other rewards simply for making qualified purchases.

When you apply for a credit card, your lender will set a credit limit if you’re approved. You may spend up to and including this credit limit with one or multiple transactions anywhere credit cards are accepted. Each month, you’ll make a payment that is applied to the principal, interest, and fees charged by the lender. As you pay down your balance, funds will become available to use again. If you don’t have a balance, you won’t pay any interest, although you may have to pay annual fees depending on the card you select.

Recommended Option: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

If you have an excellent credit score of at least 740, you may qualify for the Chase Ink Business Unlimited credit card. This is a rewards card that provides you with unlimited 1.5% cash back on all purchases made for your business. As a new cardholder, you will also be eligible to receive a $500 cash back bonus if you spend $3,000 within 3 months of opening your account.

The Chase Ink Business Unlimited card comes with a 0% introductory APR for purchases and balance transfers for the first 12 months. After the introductory period, the card has a variable APR of 15.49% to 21.49%. This card comes with no annual fee. You can also receive additional cards for employees at no extra cost.

Rollover For Business Startups (ROBS)

Do you have a retirement account? If so, you can legally leverage these funds to pay your startup costs without facing tax or early withdrawal penalties. With a Rollover for Business Startups (ROBS) plan, you can put your retirement account to work for your new business.

It’s possible to access your retirement account funds with no penalties in just a few easy steps. First, create a new C-corporation. Next, create a qualified retirement plan for the corporation. Then, the funds from your qualified retirement account are rolled over into the new retirement plan. Finally, the funds that were rolled over can be used to purchase stock in the corporation, giving you access to the capital you need to start or grow your business.

Throughout the process, you do have to remain compliant and follow legal guidelines. For most new business owners, the process can get confusing, which is why ROBS providers are available to help. A ROBS provider will set up your ROBS plan to ensure everything is by the book. To get started, you’ll need to pay a setup fee, then pay a monthly maintenance fee for maintaining your account.

The great thing about ROBS plans is that you are using your own money, so you won’t have to pay interest on a loan. You will, however, have to pay a monthly fee to maintain your account. You also risk losing your retirement funds if your business is unsuccessful.

Recommended Option: Benetrends

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Benetrends is a pioneer of ROBS, launching its Rainmaker Plan in the 1980s. This visionary-plan is the longest-running ROBS plan, and Benetrends offers many benefits that outshine its competitors.

With just four easy steps, Benetrends can get the capital you need from your qualified retirement plan. With the Rainmaker Plan, you can have your funding is as little as 10 days.

To qualify, you must have an eligible retirement plan with at least $50,000. Most retirement plans are eligible, with the exception of Roth IRAs, 457 plans for non-governmental agencies, and distribution of death benefits from an IRA other than to the spouse. There are no time in business, annual revenue, or personal credit score requirements.

To get started with Benetrends, you’ll be required to pay a setup fee of $4,995. After paying this fee, your C-corporation and ROBS plan will be set up. After your plan is set up, you’ll be required to pay a monthly maintenance fee of $130. This fee covers ongoing support and services including legal support, audit protection, and compliance.

Purchase Financing

Paying your vendors will be an ongoing expense for your business. You have multiple options available to pay your vendors. You can pay out-of-pocket, you can use a credit card or line of credit, or you can take advantage of purchase financing.

With this type of financing, your vendors are paid immediately, while you get more time to pay. A lender pays your vendors up front, then you repay the lender over a set period of time. The lender will add fees and/or interest to your loan balance for paying your expenses upfront.

By using purchase financing, you’re able to pay your vendors immediately to receive the supplies, inventory, or services you need for your bar. Then, you can spread out your payments over time to make these purchases more affordable for your business.

Recommended Option: Behalf

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Behalf offers purchase financing of up to $50,000 for qualified borrowers. Repayment terms of up to 180 days are available. Behalf charges fees of 1% to 3% of the borrowed amount per month for using this service. There are no additional fees. You can repay on a weekly or monthly schedule.

Behalf’s financing can be used to pay merchants for inventory or services. However, there are some restrictions. You can’t pay bills, cover payroll, or pay other existing debt through Behalf.

Behalf analyzes the performance of your business when making its approval decisions. There are no time in business or business revenue requirements. Behalf does not have a minimum personal credit score for approval, although your credit history will be considered during the application process.

Create Your Menu

Before you open your bar, you need to know what food and drinks you plan to serve and what equipment is needed to properly prepare each menu item.

When planning your menu, think about your theme and the type of customers you plan to attract while also keeping your budget in mind.

Decide what type of drinks you’ll serve. Most bars serve a variety of wines, beers, liquors, and mixed drinks, but what you serve may be different based on the theme of your bar. For example, in a sports bar, your drink menu may feature a wide selection of beers. If you open a nightclub, you want to have a variety of liquors and mixers on hand to create many different types of drinks. If you have a cigar bar, wines and craft beers may make up the bulk of your menu. Again, the type of bar you want, the theme, and your target audience can help you determine what you serve.

If your bar will serve food, think about the types of food you’ll serve. In a neighborhood bar, appetizers like fried cheese sticks or nachos may be enough to keep your customers happy. If you have a gastropub, meals made with high-quality ingredients should make up your menu. Remember, creating the perfect menu takes careful planning, so take the time to brainstorm your ideas.

It’s also wise to start off small and add new items as your business grows. If you have a huge menu that features every type of food and beverage you could think of, your bar will require more equipment. More equipment equals more expenses. Working with a smaller menu can also ensure that your bartenders and kitchen staff aren’t overwhelmed and can focus on creating high-quality food and drinks. As you draw in customers to your bar, you can tweak your menu based on what customers are ordering, what gets rave reviews, and what falls flat.

Once you’ve determined what your bar will be serving, you’ll need to talk with suppliers to get estimates of costs. As you approach opening day, you’ll place your order with your selected suppliers.

Still stuck on your menu? Check out our tips for creating a great menu.

Purchase Your Equipment

Once you’ve secured a location and have moved further into the process of building your bar, it’s time to think about the equipment and fixtures that you need. What your bar needs depends on the theme you’ve selected and what you’ll be serving, but some items you may consider include:

  • Bar & barstools
  • Benches
  • Tables & chairs
  • Industrial ovens & other kitchen equipment
  • Coolers, refrigerators & ice bins
  • Blenders & other bar equipment
  • Big-screen TVs
  • Sound system
  • Microphones & other audio equipment
  • Beer taps

After you’ve leased, purchased, or built your building, it’s important to create a detailed layout of your business. You want to ensure that you have enough room for everything required to run your bar, while also leaving enough space for seating, a dance floor, and other features that will be important to your customers. As you grow your business and need to add or update equipment, consider equipment financing to make these expenses more manageable.

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

Select Your POS System

ipad POS

Gone are the days when most businesses just needed a cash register or two for their customers. With the rising use of credit cards, debit cards, and mobile payments, businesses — especially bars — need a more advanced system for accepting payments.

A point of sale (POS) system is one of the most important pieces of equipment you’ll need for your new bar. A POS system combines software and hardware to create a centralized point for business operations. Through this system, you’ll be able to take orders and accept payments, but that’s not all.

Some of the most advanced POS systems come with features beneficial to bars. This includes built-in tipping systems, inventory management that allows you to track your stock levels, and an open ticket system for creating bar tabs.

Your POS system plays an important role in your business, so it’s important that you know what to look for before making your purchase. Check out our top picks for POS systems for bars and nightclubs.

Lightspeed Restaurant ShopKeep Toast

Lightspeed Restaurant

ShopKeep

Toast

TouchBistro

Breadcrumb POS by Upserve

ShopKeep alternatives for restaurants

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Review

Monthly fee

$69+

Get a quote

$79+

$69+

$99+

Cloud-based or Locally Installed

Cloud-based

Hybrid

Cloud-based

Locally installed

Cloud-based

Compatible credit card processors

Cayan or Mercury in US; iZettle in Europe

Shopkeep Payments & some others; contact your processor to see if they are supported

Toast only

TouchBistro Payments, Square, PayPal, Moneris, Cayan, Chase Paymentech & more

Upserve Payments only

Business size

Small to medium

Small to medium

Small to large

Small to medium

Small to large

Hire Employees

To make sure your bar is a success, you need to have the right employees working for you. If you haven’t done so already, you need to apply for an Employer Identification Number for tax purposes. Next, you need to determine how many employees you need and what their roles will be in your business.

You’ll need at least one bartender that prepares and serves drinks in your bar. You will need to add additional bartenders based on the number of bar areas you have in your business, as well as the number of customers you have to serve.

If your bar will serve any type of food, you will also need a kitchen staff. This includes at least one cook, but you may also need prep cooks, dishwashers, and other staff as your business grows.

You’ll also need servers to distribute food or pass out drinks to customers not seated at the bar. The number of servers you have is based on the size of your bar and how busy it gets.

While your servers may be able to handle cleaning tables at first, as your business grows, you may want to add a busser or two, who are responsible for cleaning off tables for new customers.

You may also require additional staff. For example, you may hire a doorman that checks IDs before customers enter the door. A security guard may also be a staff member you hire to handle tempers that flare from customers who’ve had one too many.

You also need at least one manager to oversee the staff. A manager’s role may include hiring employees, firing employees, training, making schedules, and making sure that all staff members are doing their jobs properly.

Before you start seeking job applicants, make sure to create an in-house organizational chart to know exactly who you need to hire. You also need to do your research to figure out what salaries you will offer, as well as any benefits.

Unsure of where to hire new employees? You have a few options. First, post a job ad on online job boards or classified ads to find potential employees. This is an inexpensive (or even free) way to find candidates.

You can also ask for referrals. If you know someone in the industry, ask if they have any new hires to recommend. Don’t know anyone in the industry? Ask other colleagues, family, and friends for recommendations.

Bolster Your Web Presence

After completing all of these steps, you’ll be that much closer to opening your bar. However, you want to make sure to spread the word about your business, and there’s no better way to do that than with the internet.

One of the easiest ways to get the word out about your business is through social media. Facebook, Instagram, and Twitter are just a few of the ways you can reach your target audience, and Yelp For Business is a must. Best of all, these accounts are free to use. As you grow, you may consider moving past the free advertising you get through your posts and pictures and invest in advertising on these social platforms.

You also need a good website. Keep your bar’s theme in mind when you design your site. Make sure that your website reflects the image you want to project. There are many small business website builders you can look into if you want to create your website yourself. These make it easy for you to create a professional website with no prior web design experience required.

Service Pricing Hosted or Licensed Templates & Themes Compatible Credit Card Processors Next Steps

$14 – $179/month Hosted Excellent Many

Go to Site

Free – $29.90/month Web-Hosted Excellent Many

Go to Site

Free – $25/month Web-Hosted Average Many

Go to Site

$0/month Hosted Good Square Payments

Go to Site

Make sure that you include your address and phone number on your website. Information about your bar including dress code and hours of operation are also extremely useful for customers. You can also include your menu, photos of your establishment and patrons, and news and updates on your website.

Also, remember that word-of-mouth is one of the best forms of advertising for a bar. If your customers love your drinks, food, service, and atmosphere, they’ll tell others. If they dislike your bar, they’ll also tell others … who will make sure to avoid your establishment. Whether your bar is brand new on the block or you’ve been in business for some time, keep customer satisfaction high so that customers online and off will have nothing but positive reviews for your business.

Final Thoughts

As you can see, creating a bar where everyone gathers to have a great time takes a lot of hard work. But just as Theodore Roosevelt said, “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty.” Running your own bar means planning, budgeting, and always being ready for growth. While your bar won’t make you an overnight millionaire, you can become a successful entrepreneur with this potentially-lucrative venture if you put in the work.

The post Want To Open Your Own Bar? Top Tips To Get You Started appeared first on Merchant Maverick.

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11+ GoDaddy Website Builder Examples for Inspiration

11+ GoDaddy Website Builder Examples for Inspiration

So you’re considering using GoDaddy as your website builder, and you’re looking for GoDaddy website builder examples for inspiration and confirmation that you’re making the right choice.

See GoDaddy’s Current Website Builder Pricing here…

GoDaddy is the big brand in the website services industry. From their Super Bowl ads to TV ads to online advertising, they are by far the most well-known choice for domains, hosting, website builders, and productivity products for small businesses.

And when it comes to their website builder (known as “GoCentral”), GoDaddy is known for its raw simplicity. The setup is extremely straightforward (fill-in-the-blank style), which makes it extremely appealing to DIY-ers with limited website building experience.

And while simple is great, there are some major tradeoffs, particularly in terms of functionality.

As we dive into examples of what GoDaddy websites look like in the wild, there is one thing to keep in mind when you’re evaluating a website platform: it’s not just about how the websites look. How they operate matters too. That’s the main consideration for all my website builder reviews & my guide to choosing the best website builder.

Think of it like buying a car. You have a make / model in mind, and you’re probably looking to see them drive by on the road to see how they actually look. However, you also care about how they operate. Does it accelerate well? Does it have the hauling capabilities you need? How is the gas mileage?

Looking at a website platform should be done in the same way. We collected the following GoDaddy GoCentral (their website builder brand name) examples not just to show you how they look, but how GoDaddy websites can function so you can be sure you have a website that fits both the style you want and the functionality you need.

Disclosure – I receive customer referral fees from companies mentioned on this website. All data & opinions are based on my professional judgement as a paying customer or consultant to a paying customer.

General Website Examples

Let’s start with a general round up of solid GoDaddy website builder examples. We’ve pulled these examples based on functionality, design, and usability. Again,GoDaddy works well for DIY-ers who want an easy-to-use website that they can throw up on their own without having to worry about the inner-workings. However, be aware that with this comes trade-offs (i.e. you give up control, functionality, customization, etc.)

Citizen Restaurant

If you’re looking for a straightforward website where you can post content (like menus), this GoDaddy website builder example is a great place to start for inspiration. The homepage is straightforward, with a simple call to action to sign up for the email list. The navigation is also clear, with the Dine and Drink tabs bringing visitors to pages where they can download a PDF version of the dining and drinks menus.

Augusta Blues Company

Augusta Blues Company

What stood out to us about this GoDaddy website was how it makes the most of its simplicity. By using a custom graphic on the homepage for the header image, Augusta Blues Company has added some custom flair to this straightforward template. We also found the navigation to be straightforward and easy to use, which is a key hallmark of a good website!

And for those who need to provide directions on their website, this GoDaddy website builder example showcases how you can integrate a map on the homepage. We particularly liked how August Blues Company paired the map with other contact information.

Augusta Blues Company Contact

Explore Similar GoDaddy Templates!

Wedding Website Example

Wedding websites are a great way to give guests information about the big day, show off your personality, and post updates / pictures / anything else you may want to share with those who are involved with your wedding. Given this website has a shorter lifespan than say, a business website, you’ll want something that’s easy to customize, edit, and manage. Here’s a great example of what you can do with a GoDaddy GoCentral wedding website:

Dave and Nuria

Dave & Nuria

If you’re looking for a simple, polished, easy-to-use wedding website, this example from Dave and Nuria is a great place to start for inspiration. It has all of the necessary information, from the itinerary for the weekend to how to plan your trip, and the RSVP is a simple contact form. It’s a great example of a plug and play website template that saves you time and money, which is especially useful for a site that doesn’t have a long lifespan!

Explore Similar GoDaddy Templates!

Photography Website Example

Photography websites are all about the portfolio of work. When looking for a GoDaddy website builder example to serve as inspiration for your photography, pay special attention to the layout options for your work. You want to be sure you’re showing off your photos in a creative way without sacrificing the user experience (AKA fast photo load speed, easy to navigate, high quality images, etc). Here are a few examples of GoDaddy photography websites we liked:

Anthony Friend 

Anthony Friend

What makes this GoDaddy website a great example for photographers is the layout of the portfolio page. The grid style makes it easy to get an overview of the photographer’s work without overloading the functionality or making it too difficult for visitors to get an idea of their style.

Richard Eads

Richard Eads Photography

Richard’s site provides another photography inspiration example, specifically in how the work is displayed. Notice how this GoDaddy website uses a carousel to feature photos, with a bar underneath that changes as the photos move. It’s a unique way to showcase Richard’s work in a way that’s interactive without being overwhelming.

Explore Similar GoDaddy Templates!

Ecommerce Website Example

Ecommerce websites are all about their products. A good ecommerce website should have high-quality product images, be easy to navigate, and keep the focus on what you have to offer your shoppers! You’ll also want to include strong product descriptions and an easy check out process. Here are a few of our favorite GoDaddy ecommerce website examples:

Popcorn Willy

Popcorn Willy

What stood out to us about this GoDaddy ecommerce website was the product page organization. The categories help visitors sort through what they’re looking for easily, and the ratings provide another layer of “trust factor” that’s key for ecommerce websites. If you’re looking for a simple way to list products, this website could be a great place to start for inspiration.

Better Living Market

Better Living Market

If you’re looking for a bit more “design flair”, check out Better Market Living. This ecommerce website uses a high-quality header image to spruce up the homepage, but still keeps navigation ultra-simple with the shop now button.

Something to note about GoDaddy website builder websites in general: while GoDaddy is known for its simplicity, that does mean limited design customization and functionality. For example, most websites have a similar, block layout. For e-commerce websites specific, the product pages don’t vary much beyond this layout.

Better Living Market Products

Again, you should choose your website builder not just on design, but on the functionality and levels of customization you need. If you’re looking for a more customized ecommerce shop, there could be better options for you.

Explore Similar GoDaddy Templates!

Artist Website Example

Need to showcase your art? An artist website is a great way to create a digital portfolio of your work. These websites should be easy to navigate, keep the focus on your artwork, and allow prospective clients / commissioners to contact you easily. Here’s an example of a great artist GoDaddy website:

Jules Art & Design

Jules Art and Design

Sometimes, less is more… and that’s exactly what makes Jule’s website so effective. The clean layout draws your eye right to her artwork, and the simple navigation at the top of the page makes it easy to find exactly what you need on her website. This is another example of a GoDaddy portfolio website that is a good fit for a DIY-er who just needs a place to showcase their work in an easily digestible format.

Explore Similar GoDaddy Templates!

Music Website Example

Similar to artist websites, music websites are all about the music. Which means if you’re creating a music website, you’ll need a player so visitors can listen to your work on your site. You’ll also want to give people the opportunity to connect with you by listing social media channels, tour dates, and places they can buy your albums! Here’s an example of a music website created with GoDaddy:

Telekinetic Yeti

Telekinetic Yeti

This GoDaddy music website keeps the focus solely on the music. In fact, the music page is a simple, embedded music player where visitors can listen to the band’s most recent album. While it could be more sophisticated, it doesn’t necessarily need to be. Again, it all comes down to your needs. If you wanted some advanced functionality on your music website (like full discography, Spotify integrations, Ticketmaster and Eventbrite integrations, etc.), GoDaddy may not be the best option for you.

Here’s how I’d recommend building a long-term music website with WordPress. Wix also provides a good drag & drop option.

Business Website Example

A strong business website showcases your services, gives customers the opportunity to contact you, and builds social proof. Visitors should be able to know exactly who you are and what you do when they land on their site, and should be able to easily navigate to what they’re looking for from your homepage. Here are a few examples of strong GoDaddy Website Builder business website examples:

Women Working in Technology

Women Working in Technology

Women Working in Technology has a fairly robust navigation, which goes to show just how much content you can have on your GoDaddy business website. However, the navigation keeps it organized with sub-menus, which means despite the large amount of content on the site, it’s easy to find your way around.

We also liked how Women Working in Technology used a video on their homepage to tell visitors what they’re all about.

WWIT-About

It provides a great way to make the site more interactive without having to build something completely custom!

Crescent Flight Ops

Crescent Flight Ops

Again, GoDaddy tends to skew towards block-style website templates, and while this business site by Crescent Flight Ops is a bit blocky, their color palette and use of different media types help with the flow. We included this website to show how if you wanted the simplicity, you could still make your theme look different by customizing the colors and actual content on the page.

Explore Similar GoDaddy Templates!

Personal Website Examples

Personal websites are exactly what they sound like… personal! Whether it’s a resume / portfolio website you use to get booked or a blog you use to create content, this type of site is all about getting your personal brand online and owning your space on the Internet. Personal website should be easy to edit, manage, and customize. Here’s an example of a GoDaddy personal website to use for inspiration:

Marc Whisnant

Marc Whisnant

It’s easy to get caught up in showcasing your personality and creativity on your personal website. And while adding in some flair is fine, you don’t want to sacrifice clarity in the name of creativity. Marc’s website includes the right balance of both. We loved how his work stands out in contrast to the black background, but isn’t overwhelming in its grid format.

We also liked how Marc included a downloadable version of his resume on the homepage. This is a great way to share your qualifications with those who may be looking to hire you.

marc resume

Explore Similar GoDaddy Templates! Or explore how I like to build personal websites.

Next Steps

At the end of the day, choosing your website platform goes far beyond design. Why? Because all web pages are made of HTML & CSS with a few scripts thrown in. This means that any website template can exist on any good web platform.

What YOU want to focus on is the design elements and functionality that are available on the platform you’re choosing.

If you feel like GoDaddy fits the design and functionality needs you have for your website, you can explore more GoDaddy templates here.

Not sure if GoDaddy is a right fit? Explore other website builder options here or see how GoDaddy stacks up against popular brands like Wix & Weebly.

The post 11+ GoDaddy Website Builder Examples for Inspiration appeared first on ShivarWeb.

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