$1 million is now available for US-based small businesses thanks to a grant program announced today by financial firm The Hartford and Main Street America, a nonprofit focused on revitalizing older and historic commercial districts.
The HartBeat of Main Street Grant Program, as the program has been dubbed, will sponsor grants ranging from $5,000 to $15,000 in size. Brick-and-mortar small businesses with fewer than 20 employees and located within commercial districts are eligible to apply.
Applications are open now through August 23, or after the program has received 500 applicants. Additional funding rounds may be announced later this summer.
The $1 million in funding has been donated by The Hartford.
“The incredible resilience and innovation our small business customers have shown as theyâve adapted to a new normal has been inspiring,” The Hartford’s head of small commercial and personal lines Stephanie Bush said in a statement. “We are committed to providing them with support as they continue to navigate these challenging times.”
The Hartford and Main Street America have also geared this grant program towards helping underserved communities — they’ve pledged that 50% of funds will go towards diverse-owned businesses. This includes ownership by minorities, women, veterans, disabled people, and those identifying as LGBTQ.
Related: Women-led Businesses More Impacted By COVID-19, Survey Says
The HartBeat Aims To Aid COVID-19 Recovery
Like many financial aid programs launched recently, the economic struggles stemming from COVID-19 inspired the HartBeat program.
“COVID-19 has had a devastating impact on small, locally-owned businesses and they need our support like never before,” said Patrice Frey, the president and CEO of Main Street America’s National Main Street Center. “We are thrilled to partner with The Hartford to alleviate some of the financial burden small businesses are experiencing and support the resilience and recovery of older and historic main streets and commercial districts.”
With its focus on COVID-19 recovery, the HartBeat does have a set of eligible grant expenses for awardees. These requirements include things such as physical improvements to meet COVID-19 safety regulations, equipment for public safety, fees associated with launching eCommerce sales, and business plan modifications. The grants may also be used for rent, payroll, and other operating expenses.
The program’s application notes that final awards will be given out based on “a case by case basis” as well as listing a set of criteria for eligible applicants. To be eligible for the HartBeat’s grants, applicants are required to:
Run their business within the same state that it does business
Own a US brick-and-mortar location within an older or historic main street, downtown, or commercial district
Have been in operation since at least January 1, 2019
Employ fewer than 20 employees
Be an owner of the business
Be over 18 years of age
Note that applicants don’t need to be customers of The Hartford to be eligible for funding, nor is an applicant’s relationship to The Hartford considered.
This is far from the first grant venture from Main Street America. In June, the nonprofit awarded $10,000 each to 10 different businesses as part of its Future of Shopping Small Grant Program, which was run jointly with American Express. Earlier in the year, Main Street America doled out $10,000 apiece to eight different small business programs focused on helping local businesses survive COVID-19.
Other Small Business Grants
Beyond the HartBeat program, small businesses have several other avenues to pursue for grant funding.
To get up to speed on the world of small business grants, check out Merchant Maverick’s primer on the topic. Some may also find our article covering COVID-19 relief grants helpful, too.
Women who own a small business may want to take a peek at Merchant Maverick’s guide to the best business grants for women. We’ve also written about grants for minority-owned businesses as well.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
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Doing your own payroll is like skinning a cat â it may seem daunting, but there are many ways to do it. You just have to choose the one that works best for you. Read on to explore the pros and cons of doing your own payroll.
The Pros & Cons Of Manual Payroll
Some small business owners choose to do their own payroll manually. It saves money but it is not necessarily the best option for everyone.
Pros Of DIY Payroll
It’s Cheaper: When you outsource payroll, you incur an extra cost. That cost will depend on the kind of business you are running and the number of people on your payroll, but when you are running a small business, every penny counts. If you just canât justify the expense of outsourcing Payroll, you can do it yourself using free resources available.
You Stay In Control: Small business owners often fear losing control of their business. A third-party payroll provider may not do things the way you want them done. Doing it yourself allows you to maintain total control of your business operations.
You Know What’s Going On: Doing it yourself provides a good opportunity to understand everything about your payroll process and payroll taxes.
Cons Of DIY Payroll
It Takes Dedication: Successful DIY payroll depends directly on the effort of an individual. If you canât take care of it for some reason that month, it wonât be taken care of.
There’s A Significant Time Commitment: Doing your own payroll means sacrificing your own time. Time is the only resource that is even scarcer than money in the small business landscape, and there is an automatic cost to doing payroll yourself.
Lots Of Room For Error: You might get it wrong or incur too much stress. If you are not a naturally detail-oriented person, doing your own payroll might cause more stress than its worth — and put you in a position of liability when you get things wrong.
At the end of the day, it is a question of whether you have more money than time or more time than money. What is the opportunity cost? Is there another option that can ultimately give you better results?
How to Do Your Own Payroll Manually
There are several things you must keep in mind if you’re going to take the manual payroll route. Nothing about payroll is simple or low-stakes, so it’s crucial to have your ducks in a row.
1) Prepare The Proper Tax Documents
The 1-9 form is a requisite for verifying the identity of your employees as well as their employment availability. Every new hire must fill out this form during the onboarding process.
Your employee fills in the first part and you fill in the second part. New employees must furnish you with a document of identity, which could be their Passport, Green Card, Birth Certificate, Social Security Card, or Alien Registration Card.
Employees should fill out their own W-4s to document withholding tax (tax that the employer withholds from their salaries and pays to the government directly).
2) Have Your EIN Number Handy
An EIN is your Federal Employer Identification Number. This number is provided to you by the IRS. If you are a new business or company, you’ll need to request one from the IRS.
3) Gather Employee Earnings Information
Depending on your type of business and how it is run, you will need lots of information about your employees and their earnings. All of the following contribute to the overall labor burden of each employee:
Gross Pay: First, you must calculate their Gross Pay, which is what they earn before any money is deducted. For salaried employees, Gross Pay is the yearly salary. For employees who earn an hourly wage, gross pay can be found by multiplying their hourly wage by the number of hours worked. Generally, contractors and freelancers tend to be on an hourly wage.
Net Pay: Net Pay is what your employees earn after all deductions, including taxes and copays.
Overtime: This is money that employees earn for going beyond regular working hours. For example, a typical full-time employee gets overtime when they work more than 40 hours.
Bonuses: Employees get bonuses based on certain performance goals. A bonus has nothing to do with working hours or salary. It is a one-time reward for good performance. Bonus money is taxable.
Tips: Some employees, typically in the service industry, earn money from tips. Tips are rewards for good service and they typically come from customers or clients. You need a Payroll system to track tips because they too are taxed.
Commissions: Some employees earn on commission: a percentage of money from each sale they make. The IRS taxes the income of commission-only employees like any other supplemental income.
Paid Time-Off: Paid time-off is not necessarily synonymous with vacation days; it is used any time an employee is still earning although they have taken time off for medical leave, family leave, personal days, or paid vacation time. Your payroll system should reflect any adjustments to a paycheck depending on the time-off policies. You should also consider offering other leave options besides sick leave and vacation leave. Have a plan for maternity leave, paternity leave, and family leave, for example. Your employees should know as much as possible about your time-off policies, including whether they will be earning a regular rate for their paid time-off or not. They should also know what happens to unutilized time-off when the year ends. Note that the laws on paid leave are not the same in every state. You have to look up what the rules say in your own state.
Benefits: Benefits are extra incentives above and beyond salaries and wages. These benefits may include workersâ compensation, life insurance, dental, medical insurance, Family Medical Leave Act laws, unemployment taxes, and time off to exercise civic responsibilities such as voting, serving in the military, or jury duty.
Retirement: Retirement plans are some of the incentives that promote employee retention, like a 401K.
4) Choose Your Payroll Schedule
Businesses pay their employees weekly, bi-weekly, semi-monthly, or monthly. Each payroll schedule has its own benefits and drawbacks and you have to choose the right one for you.
Your choice of payroll schedule might be influenced by the industry you are in or the state in which you are operating.
5) Track Time
For employees who earn an hourly age or a salary, you need to track the hours they have worked. A payroll system should have the capacity to track employee working time.
6) Calculate Gross Pay
Gross Pay is the total amount of money that each employee earns before deductions. This means before things like taxes are deducted from the Pay. A simple tool like Excel can be used to calculate gross pay by multiplying the hours worked, including overtime, by the pay rate/hour.
Once you have the employee’s gross pay, you can calculate the deductions on each employee’s pay as well as their allowances.
8) Calculate Net Pay
To calculate net pay, subtract all the deductions from the employee’s gross pay.
9) Pay Your Employees
Pay your employees via direct deposits, checks, or any other method that works for both you and your employees.
10) Keep Strong Payroll Records
Putting together your payroll records at the end of the year can be a nightmare if you have not been documenting them faithfully. Update records throughout the year on a regular basis to avoid this nightmare.
Learn more about end of year payroll.
11) Don’t Forget To File & Pay Payroll Taxes
Creating a payroll system requires the right tax documents from employees. Thankfully, todayâs digital way of doing business reduces the amount of paperwork required.
Here are some of the tax forms you’ll need:
W-2: The W-2 form details information about all wages for the year and the taxes withheld.
W-4: Your employees will fill a W-4 form detailing the amount of tax that they expect will be withheld from their salaries. These withholding allowances will help you run the Payroll correctly.
1099: The 1099 is for freelancers and contractors to track their income. No taxes are withheld.
Schedule C: This is a profit/loss report for Sole Proprietors and Independent Contractors to file with the IRS. It is a profit-loss or income statement for calculating self-employment tax.
I-9: The 1-9 form verifies the identity of your employees as well as their employment availability. Employees should fill it as soon as they start working for you. The 1-9 form is filled by both the employee and the employer. You need the employeesâ formal identification papers.
940: Declare your payroll annually in a 940. This form details how much all your employees have earned and how much went into unemployment taxes.
941: File a 941 form annually. It has information about what you have paid your employees during the year and how much you withheld for social security taxes, income taxes, and Medicare. File the form and remit the money you withheld to the IRS.
944: Small businesses that withhold less than $1,000 in payroll taxes in a year will need to file a 944 form with the IRS.
Learn more about payroll taxes.
The Pros & Cons Of Using Payroll Software
There is a middle ground between outsourcing payroll entirely and doing it yourself manually. This option entails using payroll software. Once you feed a payroll software app with all the relevant information, all you have to do is to hit the âpayâ button and the whole process is taken care of for you.
There are some obvious advantages and disadvantages to using payroll software.
Maintain Control: Since you are not hiring a consultant, you are still retaining control over the details of your payroll. You or your in-house employee will be creating and viewing the reports as well as paying the employees and taking care of taxes.
Cheaper: Paying for payroll software is much cheaper than hiring a consultant or a company to do your payroll.
Quicker: Payroll software will do the job faster than you or anyone else would have done it.
Increased Security: Your financial information is much more secure because you have control over it. You can access your information anytime you want it. The payroll software safely stores the information.
It Takes Longer: On the other hand, using a payroll solution will take longer â at least initially â when you are still learning how to use the software properly. A mistake on your part could cost you hours to fix. Of course, once you have mastered it, the process gets infinitely faster.
Potential For Error: When you are doing your taxes yourself, mistakes might cost you hefty penalties with the IRS. Outsourcing payroll means someone else takes that risk.
Monthly Costs: Although payroll software is cheaper in the long run, there are some upfront costs that can be relatively high depending on the range of services. You also have to budget for annual fees.
Time Investment: When you first begin with a payroll software program, you have to invest plenty of man-hours in learning how the software works.
How to Do Your Own Payroll Using Payroll Software
If you’re looking for a fairly seamless and automated payroll process, you should probably invest in a payroll app. Payroll software not only handles the administration of pay, but also the processes of onboarding employees, as well as filing payroll taxes both quarterly and annually.
When you use payroll software, you get a payroll guarantee, which means that any penalties caused by tax mistakes will be on the software provider, and not on you.
1) Choose the Right Payroll Software
Analyze the unique needs of your business before settling on a payroll software app. Each payroll program has its own range of features. A full-service payroll app takes care of payroll, filing taxes, or even HR functions like keeping track of employee benefits and tracking time.
Consider the size of your company when choosing the right payroll software for you. Some products are tailor-made for microenterprises while others are more suited to mid-sized companies.
Look into payroll software designed for your specific industry. A payroll app made for your industry will serve you better than one that isnât. Hospitality companies, for example, have their own unique needs that may be different from those of companies in a different niche, like education, or manufacturing.
Some payroll software products are designed to be customizable to your business requirements. Consider one of these as long as you have the ability to use them with relative ease.
Choose software that is compatible with your level of accounting knowledge. Some are specifically designed for non-accountants and they are therefore easier to learn. Others are more complex and present a steeper learning curve.
Purchase software that is compatible with the tools you already have. For example, you might want to use one that is compatible with QuickBooks or Square, if that is what you are already using.
Find something that fits within your budget. If the whole point of working with a payroll program is to save money, then you definitely want something that is priced reasonably for you.
2) Add Company & Employee Information
As an employer, you require accurate and current information on each employee to process payroll accurately. For each employee, you’ll need the name in full, spelled correctly, as well as their Social Security Number, their jurisdictions (both lived-in and worked-in), and their correct address.
For your company, you’ll need information about tax IDs, and any additional tax information required.
You’ll also need to enter any employment forms, like the EIN, W-4, and the 1-9, into the software.
3) Track Time
A full-service payroll system takes on payroll calculations, deductions, check printing, tax support and tax filing, time tracking, and paid time off.
If you are not dealing with full-service payroll software, you may have to do without time tracking, among other features. Simplified payroll services are cheaper and have fewer features.
Decent payroll software should take care of regular time tracking, as well as PTO tracking, together with other features like paying contractors and employees, paying vendors, garnishing wages, online processing, filing taxes, paying vendors, and W-2 preparation and distribution.
4) Process Payroll
Processing your payroll involves a series of actions. You must determine your employeesâ wages and salaries, choose a pay schedule, calculate their taxes, withhold payroll taxes from their paychecks, deliver paychecks to the employees with the correct net pay after withholding the right amounts of money, remit taxes to the government, and provide employees with their W-2 or 1099 paperwork.
You may have a combination of employees and contractors on your payroll:
Employees are individuals over whose workload, paycheck, and working relationship you have control.
Contractors are individuals who are working with you for a specific period of time, according to a contract you have agreed upon. Contract employees are supposed to withhold their own tax. It is not your responsibility to withhold it. Your work is done as soon as you have paid them.
5) Don’t Forget To File & Pay Payroll Taxes
All the money that you withhold from the earnings of your employees for the purpose of remitting tax to the government falls under the umbrella of payroll taxes.
You pay taxes to federal governments and the states. The money you withhold as payroll tax is a percentage of your employeeâs gross earnings. You have the responsibility to manage these taxes from employee salaries and wages. If you have contractors on 1099, they will manage their own payroll taxes.
Other Options for Processing Payroll
You may also consider outsourcing your payroll to an accountant or an accountancy firm to run it for you. Accountants have extensive experience and training and they will do a much better job in less time.
Accountants can help you to drastically reduce the amount of time you spend on the payroll, but you still have to provide the accountant with the right documentation â like your tracked time â so that they have what they need to do their job.
An accountant may be the best option for that entrepreneur who has no time at all to run their own payroll. All you have to do is give them your time cards and employee information. They handle the rest.
The problem with hiring an accountant is that it is the most expensive option. If you decide to go that route, try to find an accountant who has experience working with similar businesses to yours.
Choosing The Right Payroll Processing Option For Your Business
There are three ways to go when it comes to payroll. The first is to do it yourself manually. The second is to do it yourself but use a payroll software solution. The third way is to hire an accountant or an accountancy firm to do it for you.
Doing payroll manually demands the greatest time investment. It also exposes the entrepreneur to the risk of making costly errors. Go with manual payroll if you donât want to spend any money on payroll, you have some understanding of taxation and accounting (or you are naturally meticulous and good with numbers), and you have the time to spare. Manual DIY payroll works best when you have a smaller number of employees. The larger your team and the more complex your payroll needs, the harder it is to do.
Using payroll software still require some time investment from you, but it most likely wonât take as much time as the first method. If you donât have any accounting or taxation skills, you need to choose a simple app — one that is designed for amateurs. If you are not familiar with taxation and payroll in general, the learning curve will not be as steep since many of the processes are automated.
When you are dealing with a more complicated business payroll, you might want to consider option three: hiring an accountant. An accounting consultant will handle everything, including running payroll, monthly remittances, and paystub requests.
One of the best things about outsourcing is that the other party assumes responsibility for any errors. This means that you donât have to be afraid of making a mistake.
Whichever option you go with, make sure you feel comfortable. Payroll is an enormous responsibility. Choose wisely!
The post How To Do Your Own Payroll In 11 Easy Steps appeared first on Merchant Maverick.
Let’s imagine a scenario. Your business needs capital now. You’ve applied for a loan with your bank, but the lender tells you that it could be weeks before you get your funds. You like the low rates and favorable terms of the loan, but you don’t want to play the waiting game. Anything can happen in the time it takes for your loan to be disbursed, and you could find yourself in a cash crunch that jeopardizes business operations.
On the other hand, you could go to an alternative lender and receive funding with a much shorter turnaround â even as quickly as the next day. The downside, though, is that a high-interest rate, additional fees, and shorter repayment terms mean that your loan will be more expensive â which could also negatively impact your business.
Fortunately, you aren’t stuck with these two choices. There is a way to get the funding you need now while waiting for your long-term loan. That option is called a commercial bridge loan.
If you need a way to cover gaps in cash flow while waiting for your loan disbursement, keep reading because a bridge loan may be exactly what you’re looking for.
What Is A Commercial Bridge Loan & What Are They Used For?
A commercial bridge loan is a type of short-term loan that businesses use as they seek a more long-term funding option. This loan bridges the gap in cash flow between the time a business applies for funding to the time that funds are disbursed.
Commercial bridge loans are used for a number of purposes. Most commonly, these loans are used to secure commercial real estate quickly. If a business owner finds a great deal on an office building, securing a mortgage or other real estate loan is time-consuming, and they could miss out on this opportunity. With bridge funding, the business owner could secure short-term funding quickly, purchase the property, and have time to secure a low-cost, long-term loan.
Bridge loans can also be used to fund the cost of renovations, either for your own commercial real estate or for investment properties. Other large purchases, such as equipment, can also be purchased with bridge loans. Another way that bridge loans are used is when acquiring another business.
The most important thing to remember is that a bridge loan is a temporary funding solution. Loan terms are often quite short, and interest rates can be high, so you want to pay this type of loan off as soon as possible by securing low-interest, long-term financing elsewhere.
How Commercial Bridge Loans Work
A commercial bridge loan works similar to other business loans. The business owner applies with a lender, provides information and documentation required to close the loan, and receives funding quickly â sometimes in just a matter of days.
The lender will consider several factors before approving an application, which we’ll discuss in more detail in a later section. For now, though, one thing that the lender will look at is the loan-to-cost (LTC). The LTC is the maximum percentage of the total cost that the lender will give to a borrower. For most lenders, the LTC is 70% to 80%.
Let’s look at an example. You want to purchase a property that is priced at $100,000. The lender is willing to offer a bridge loan of 80% LTC. This means that the lender will provide you with a loan of $80,000, while you will be required to come up with the remaining $20,000.
The lender will set the rates and terms for your bridge loan (more on that later). Once your loan is approved, funds will be disbursed so that you can make your purchase. If you bought the property from the example above, you would make payments as agreed until you secure a mortgage or other long-term funding that covers the principal, interest, and any fees required by the lender.
Another thing to note is that the property being purchased with loan funds is typically the collateral that secures the loan. That means if you default on your agreement to repay the lender, the lender has the right to seize and sell the property to recoup its losses.
Typical Bridge Loan Terms
Bridge loans are temporary, short-term solutions to cash flow problems. Most bridge loans have repayment terms of one year or less. Some lenders may provide bridge loans with longer terms, but these generally will not exceed two years. Many bridge loans will need to be repaid in just a matter of months, giving you enough time to secure more permanent financing.
Typical Bridge Loan Rates
As with any type of business funding, terms vary by lender. However, you should go into bridge loans knowing that the rates are higher than your average loan. Expect to pay at least double the prime rate or roughly 8% to 11%. Since terms for bridge loans are so short, lenders use high rates to make money off their investments.
The interest isn’t all that you have to think about, either. Most bridge loans have numerous fees that must be paid. These include:
A prepayment fee may also be applied if you pay your loan off early, so make sure to ask your lender about this fee and any other applicable fees that may increase your cost of borrowing.
What You Need To Qualify For A Bridge Loan
The requirements for obtaining a bridge loan varies from lender to lender. However, these loans may not have requirements that are as strict as traditional bank loans, which is why so many businesses use them as short-term solutions until a more favorable loan can be obtained. In exchange, though, the cost of borrowing is much higher than other financial products. You must also be able to secure long-term financing before your loan is due, or you risk losing your collateral â typically, the property purchased with loan funds.
Most lenders will look for the following when determining whether to approve a loan application:
Affordability: Lenders will consider various factors, including your debt-to-income ratio (DTI) and your debt coverage service ratio (DCSR), to determine if your cash flow is sufficient to cover current obligations plus any costs associated with your new loan.
Equity: A bridge loan will only provide around 70% to 80% of the cost of your purchase. You will need to have the remaining 20% to 30% available to complete your purchase.
Property Being Purchased: Lenders will look at what you are using your loan funds for. If you’re purchasing commercial real estate, for example, the lender may consider factors, such as the location of the property, its condition, and existing liens.
Credit History: If you have a low credit score, this doesn’t necessarily disqualify you from receiving a bridge loan. However, lenders may look at your past credit history to determine if derogatory marks â bankruptcies, foreclosures, and liens, for example â make you a risky borrower.
Is A Commercial Bridge Loan Right For Your Business?
A commercial bridge loan isn’t the right choice for every business. How do you determine if your business will benefit from a bridge loan? There are a few things to consider.
First, think about why you need funds. If you want a long-term solution for cash flow issues, a commercial bridge loan isn’t a good fit. However, if you need funds for one of these reasons, consider speaking with a lender:
Close A Deal Quickly: When the real estate market is hot, you have to strike quickly, or you’ll get left out in the cold. Lining up a mortgage or long-term loan can take weeks or even longer, and by that time, you may have lost out to another buyer. If you want to purchase a commercial property fast, you can get the funds you need with a commercial bridge loan, which buys you enough time to secure another source of funding.
Work On Your Credit: Is your credit preventing you from getting a mortgage or a bank loan? If so, making a purchase using a bridge loan may be a wise choice. If you need to make a purchase now but also need to work on your credit (i.e., paying off debt or disputing erroneous items on your credit reports), bridge loans provide you with the capital you need until you’re able to clean up your credit and obtain another loan.
Acquire A Business: If you plan to purchase another business, time is of the essence. Instead of waiting on funding, a bridge loan can help you push the deal forward quickly.
Renovate Your Property: If you want to improve your business to draw in new customers, a bridge loan can help you get the ball rolling on renovations sooner rather than later.
Where To Find Lenders That Offer Bridge Loans
Does a bridge loan seem like a good fit for your business? If so, the next step is to find your lender. Where do you get started? Try these options.
Banks: Many traditional banks offer commercial bridge loans. Start by speaking with any institutions that you currently have working relationships with. Even if your bank offers bridge loans, make sure to check out other options in your area to find the best terms and lowest rates.
Credit Unions: Credit unions that offer commercial products and services may provide bridge loans. Start with your credit union, or search for ones in your area to find the institution that best fits your needs.
Hard Money Lenders: Hard money lenders are private investors that may offer short-term bridge loans. The good thing about hard money lenders is that they often put the value of the property over factors such as credit history. The downside is that they may have higher rates than other lenders. Make sure to compare your options and only work with reputable hard money lenders.
Alternative Lenders: Some online lenders specialize in bridge loans and other short-term funding. These loans typically have quick turnaround times, and you never even have to leave your office to get the money you need.
Learn About Other Types Of Financing For Small Businesses
If a bridge loan isn’t quite the right fit for your financial situation, take heart â there are numerous other options available to help you score the capital you need. Check out our great resources, starting with the 12 Different Types Of Small Business Loans You Should Know. From affordable SBA loans to flexible lines of credit, there’s something for everyone. Then, shop your options by checking out our small business loan reviews. Once you’ve narrowed down your choices, make sure that you fully understand the loans, terms, and costs of borrowing so that you can take your business to the next level without drowning in a sea of debt. Good luck!
The post Commercial Bridge Loans: What They Are, How They Work, & When You Need One appeared first on Merchant Maverick.
For Ashley Miller, owner of Portland-based Ruby’s Cleaning Company, business is in her blood.
A product of small business owners who built up a successful franchise operation, Miller always understood that opening a business was part of her future; she knew the hours and hard work involved, she knew the mental acuity and life-balance requirements, and she knew she had the drive and connections to make it happen.
“I watched my parents manage their small business for over 25 years, and that totally gave me the confidence to take this step. When I imagined it, however, I always thought we would open our own bar,” Miller said.
The pandemic had other plans.
A Clean Slate
Back in March 2020, both a few short months and a lifetime ago, Miller was juggling two jobs just to hold the fort with her partner Henry and their son. A Portland State University graduate with degrees in Applied Linguistics and Cross-Cultural Communications, Miller was a substitute elementary teacher by day and the head bartender at The Ram — a popular local restaurant and brewery chain — by night. She’d go from juggling second-graders to slinging drinks, and while she loved both jobs and their energies, Miller was already dreaming about a change when change was thrust upon her.
“The pandemic took everything. Restaurants, closed. Schools, closed. I was definitely scared. And so for me, it was a real catalyst for forced change,” Miller said. Not only were both her jobs on hold, Miller’s 8-year-old was now home distance learning.
“I realized that COVID was going to impact my employment indefinitely, and I needed a long-term plan. That plan had to include how I’m going to work and still care for my own child.”
Then the news hit that schools might not resume in the fall — and the Ram closed its Clackamas location amid the economic fallout of the pandemic. With her two employment options no longer viable, Miller got to work.
The idea to start a cleaning company happened over socially-distanced beers with a friend. “She said we should clean houses, and I ran with it,” Miller laughed.
From there, Ruby’s Cleaning Service was quickly born.
“I decided I would take this on; take on the risk and the responsibility of starting a business. It’s already stressful to build something new, and without knowing what the future looks like, I couldn’t risk making mistakes and having that impact someone else’s life right now. Right now the business is just me, and if I need extra bodies I will hire independent contractors. Having employees is a goal for the future.”
Moving-In To The Right Niche
Miller has many goals for the future but in the meantime, she is figuring out her business and throwing herself fully into its long-term success.
“I have watched my parents and friends in their small businesses, and I come into this with an understanding that being a small business owner is about having the control to do what you love and to walk away from it, too. Maybe you end up not liking the day-to-day, but I get to work that all out myself. I get to call it — how I spend my day, who I work with,” she said.
She also loves how starting the business has provided much-needed mental exercise. Her brain is working overtime as it balances the nuts of bolts of owning a business with the reality of being that business’s lone employee.
What Miller loved about the service industry was both its brisk pace and its potential for connection to others: tending bar at a popular brewery and teaching little kids required all her mental dexterity and physical stamina. Owning Ruby’s Cleaning Service is the same. “It’s totally fulfilling to put my mind and body to work,” Miller said.
Ruby’s specializes in deep cleaning for real-estate move-ins/outs (offering everything from a full deep clean of an entire property to a pre-photography “spiff clean” needed before a listing goes live. While she is working with a client, Miller has a million other business-related items on her plate, and she still has to remember to check her phone to capitalize on potential opportunities for new clients. Until she has a consistent schedule with regulars, every phone call is a potential lead.
“Already a few real estate agents have called me in a blind panic because they need to get a place sparkling clean before pictures. When you’re building your client list, you don’t say no. I am the ‘yes’ woman right now. Can you do that? Yes. Can you be here? Yes. Right now? Yes!” Miller said. “When I first started, my prices were in the gutter. Then I got in there and it was such physically demanding work that I realized, no, there’s a reason to charge my worth.”
She admits that starting a cleaning service in a pandemic might raise eyebrows as fewer people are inviting strangers into their homes. She thought about that, too.
Miller will offer residential cleaning services if someone is in a great need, but wants to focus her energy and attention on her own branding — she knows she wants to become a favorite and go-to for real estate agencies and property management teams. Getting on vendor lists is key, and after she has built a reputation, she wants her company’s name to be synonymous with big jobs: luxury homes with expanded square-footage, commercial buildings, and specialized move-in/move-outs.
Ashley Miller’s best piece of advice for people thinking about jumping into the small business world is to find their niche.
“Carve out your niche. This is the key,” she said. “If you’re opening a restaurant, what makes you different? What type of atmosphere is special to your business, your place? It’s key for marketing to know how to market yourself directly to people looking for your services, and having a specific understanding of what makes your business unique.” For Miller, that niche involves skipping over residential cleaning services. She charges $200 per 1000 square feet and brings her own cleaning supplies. (But she’s happy to upgrade to other cleaning brands for a price, and has learned to ask if clients have their own preferred supplies, which are two industry tips for small ways to affect the bottom line).
Learning The Ropes
Miller has also been speaking with industry veterans.
“I reached out to a woman who owns a successful commercial cleaning business. She was unbelievably helpful in mentioning ideas or issues that hadn’t even crossed my mind,” Miller said. Many established small business owners love to take newbies under their wings to share years of learning and hard work.
One thing Miller learned is to always solicit feedback from clients.Â “I don’t take it personally or take it to heart. It’s better to ask and know you are meeting client expectations than to guess or assume,” she said. Her ultimate goal is to do great work and get asked to come back, and people like to come back to businesses where they feel valued and heard.
Right now, in these early stages, Miller says it feels like she has all the gears turning and working, but they don’t know how to work together yet. “I’m waiting for when all the gears run seamlessly, together.” She’s spending ample time on the nuts and bolts — things that she hopes will become easier as time passes.
“My time is going to the specific aspects of my business that need the most attention right now. I’m researching about accountants and taxes; do I have enough insurance? What is being bonded and do I need that, too?” Miller said.
Miller was even encouraged to ditch an accountant who was charging above the industry standard to run QuickBooks; she resolved to simply learn QuickBooks herself. “I know I need help, but I’m learning. I’ll run into a lot of verbiage, and I’m juggling what I can do myself and what I need someone else to help with. But at the moment, every penny in my company is valuable.”
Always Check The Oven First
As a DIY-er, Miller is ready. If she can learn to manage it herself, she wants to. She knows that at the heart of small business owners is a sense of adventure and a strong motivation to succeed. With her client list growing, Miller is ready to do what it takes to build this business during a time when starting a business might seem risky. Two months in, however, Miller has reasons to be optimistic: She’s not a small business newbie and she already has repeat clients.
For now, Miller is here for the long-haul, learning what she needs to become the leader of her own business niche. The best things she’s learned so far about the cleaning business? You can know everything you need to know about a house by its oven.
“At first, I didn’t know how to budget my time. Now I’ve got it. I’ll go check out the oven first — you can tell a lot about a house by how gross their oven is,” Miller laughed. But no matter how gross it starts, Ashley Miller and Ruby’s Cleaning Service will leave it shiny and new.
Do you have a story idea, tip, or small business spotlight idea for the Merchant Maverick news team? Shoot us an email: [email protected].
The post Ruby’s Cleaning Service: A Pandemic Cinderella Story appeared first on Merchant Maverick.
COVID-19’s destructive wake has damaged small businesses of all kinds, but those led by women have been disproportionately affected, based on a new report.
This report, released earlier this month by Facebook, found via a survey that 71% of women-led businesses in the US are operational or engaging in any sort of revenue-generating activity compared to 83% of those run by men. The survey, which Facebook jointly ran with the Organisation for Economic Co-operation and Development and the World Bank, considered the responses of more than 30,000 small business owners, managers, and employees from over 50 countries.
One reason for the disparity could be the cultural focus on gender roles in domestic settings.
According to the survey, female business leaders were more than twice as likely to spend at least six hours a day on domestic tasks when compared to their male counterparts — 23% to 11%. Facebook also noted that women were 10 percentage points more likely than men to have their work affected by caring for children, homeschooling, and doing household chores.
North America has also been the hardest hit region for closures of businesses run by women.
In the US and Canada, women were 14 percentage points more likely to close their businesses than men due to COVID-19. That’s compared to an 11 percentage point gap in Latin America and six percentage-point gaps in both Asia and Europe.
Micro-business — defined in the report as businesses with no employees — have also been hit hard. Based on the survey’s numbers, 30% of micro-businesses have closed compared to 25% of businesses with one or more employees. Of those surveyed, 37% of female-led businesses were considered “micro” while only 24% of male-led business fell under that category.
You can read Facebook’s Global State of Small Business Report in its entirety via PDF.
Women-Owned Businesses Are Struggling Worldwide
The Facebook report arrived shortly before the International Monetary Fund (IMF) called on governments to support women during the financial fallout caused by COVID-19.
“It is crucial that policymakers adopt measures to limit the scarring effects of the pandemic on women,” IMF director Kristalina Georgieva wrote in a blog post on July 21. “This could entail a focus on extending income support to the vulnerable, preserving employment linkages, providing incentives to balance work and family care responsibilities, improving access to health care and family planning, and expanding support for small businesses and the self-employed.”
The IMF’s blog post also noted the domestic discrepancy — according to previous research done by the organization, women spend 2.7 hours more per day on unpaid household work than men.
Facebook’s findings further echo similar data.
According to a June report commissioned by the National Bureau of Economic Research, the number of self-employed female business owners dropped 25% between February and April of this year. That pales in comparison to the 20% decline male-owned firms saw.
“The disproportionate losses in April 2020 to the number of female business owners will only further increase gender inequality in business ownership and perhaps broader economic inequality,” wrote Robert W. Fairlie, the UC-Santa Cruz professor who led the report’s research. Fairlie also called the number of lost women-run businesses “unprecedented.”
More globally, an impact report published this month by Women in Cloud and sponsored by Microsoft found that women entrepreneurs in the tech sector estimated their businesses will lose an average of $500,000 in revenue over the next year. It also revealed that 100% of the 57 executives surveyed reported that their businesses had lost income due to COVID-19.
Where Women-led Businesses Can Look For COVID-19 Support
Luckily, a number of organizations have stepped up to provide businesses owned by women with financial support during these coronavirus-infested times.
For instance, the Red Backpack Fund (run by The Spanx by Sara Blakely Foundation) will be giving out $5,000 grants to 1,000 female-owned businesses. The next application round is set to begin August 3.
There’s also the Moms as Entrepreneur’s COVID-19 fund, which is giving out grants of $500-$1,000 to mom-owned businesses financially impacted by the pandemic.
Microgrants can additionally be found for Black women who own businesses, such as through the Doonie Fund or Barefoot Wine’s COVID-19 recovery program.
For more general advice, check out Merchant Maverick’s guide to the best business grants for women. We also have an article covering the best business loans for women.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
The post Women-led Businesses More Impacted By COVID-19, Survey Says appeared first on Merchant Maverick.
Everyone knows there’s no such thing as a free lunch. But is there a free solution for business owners looking to make money through a WordPress site?Â WooCommerce is a free shopping cart platform created specifically for WordPress. If you’re already using WordPress, or if you like the way WordPress looks and works, WooCommerce should be on your shortlist for eCommerce options.
However, although the software is free, there are numerous costs associated with running WooCommerce, some of which are unavoidable. Before you decide whether the plug-in is right for your needs, you must first understand exactly how much you’ll end up paying
How Much Does WooCommerce Cost?
Managed WordPress hosting for WooCommerce costs between $25 to $241 each month. WooCommerce pricing starts at $25 per month for the Startup plan and rises to $95 per month for the Growth plan. You can upgrade to the Scale plan for $241 per month. Those prices are based on annual payment.
Yes, WooCommerce is free software. But you’ll need more than the software to actually run a WooCommerce store. So how much can you expect to pay? Two costs are unavoidable whenever eCommerce is your goal: site hosting and domain fees. It should come as no surprise with a customizable platform like WooCommerce that you can find a plan that fits your budget.
WooCommerce costs depend on a range of options that you can choose to add or avoid. You can purchase a domain from your site host or from your preferred registrar; expect to pay at least $10 to $16 each year.
If you’d rather look outside WordPress for site hosting, you have a range of options, described below. All prices for hosting are based on a 12-month subscription and include a start-up discount. Prices will be higher if you choose to pay month-to-month, and you’ll pay more for your subscription after the first year ends.
Additional WooCommerce Fees
Outside of domain fees, the main cost you can’t avoid is site hosting. Again, you have a range of options, with a range of price tags. You can start by considering one of these WordPress-hosted plans for seamless integration with WooCommerce features.
Startup Plan: $25/Month & Up
For one site
25,000 visitors per month
10 GB storage
500 GB bandwidth/month
Automated SSL certificate and SSH gateway
Growth Plan: $95/Month & Up
10 sites included
100,000 visitors per month
20 GB storage
200 GB bandwidth per month
SSH gateway and imported SSL certificates
Scale Plan: $241/Month & Up
400,000 visits per month
50 GB storage
500 GB bandwidth per month
SSH gateway and imported SSL certificates
For more advanced users, WordPress offers two Premium plans as well, with options for up to 100 sites, up to one million visits per month, and up to 1,000 GB bandwidth per month. All WordPress hosted sites come with 24/7 support and a range of free available add-ons.
You’ll find that WooCommerce also integrates easily with a variety of partners offering service at different levels, based on your needs. Here are a few of the top hosts.
SiteGround: From $2.95/Month
Limited to a single site, though you can add more for an additional monthly cost
WordPress, WooCommerce, and the standard Storefront theme (or template) preinstalled
Includes SSL and PCI compliance
10 GB storage
10,000 visits per month
Bluehost: From $3.95/Month
Works best with single sites
Comes with WordPress, WooCommerce, and the standard Storefront theme (template)
Includes SSL certificate and Google verification
50 GB storage
Five email accounts
Dreamhost: From $16.95/Month
100,000 visits per month
30 GB storage
SSL certificate preinstalled
All prices above are based on a 12-month subscription. Prices will be higher if you choose to pay month-to-month, and you’ll pay more for your subscription after the year-end.
WooCommerce also asks you to choose between free and paid themes, or templates. You have multiple options for free and paid themes. Paid themes offer more ways to personalize your site and stand out from the competition, and paid sites are also better in terms of customer service. Expect to pay from $20 to $100 each year, depending on the theme you choose.
WooCommerce Integrations & Add-Ons
Once you pay for your domain and site hosting, the free WooCommerce plug-in is enough to get your store up and running. However, you’ll find many great apps you can integrate with your site. Although each integration will come with a cost, the price may be well worth it depending on your ultimate goals.
WooCommerce Payments, at $0, is designed by WooCommerce itself and allows you to process secure transactions via major credit and debit cards. You can easily view and manage your transaction from your WordPress dashboard. There are no monthly fees, and transaction fees start at 2.9% plus 30 cents per transaction.
PayPal’s Pro version will cost you $35 per month and a transaction fee of 2.9% plus 30 cents.
Stripe offers a WooCommerce extension with no monthly fee and the standard 2.9% plus 30 cents transaction fee. Stripe allows you to accept Apple Pay.
Amazon & eBay offer a plugin you can use to list and sell items on Amazon.com and on eBay. It’s free to download and use for 14 days. Plans include Flexi, which costs $29 per month, charges a 1.9% transaction fee, and allows unlimited orders; Starter, at $59 per month and no transaction fees for up to 250 orders per month; and Pro, which costs $99 per month, has no transaction fees, and allows up to 750 orders per month.
One area where WooCommerce shines is in the number of useful shipping extensions you can add to your site. Here is just a sampling:
Shippo allows you to sign up for free and easily imported orders, compare rates from a variety of carriers, print professional shipping labels, find tracking information, and sync info to WooCommerce. You’ll have access to discounted rates from carriers like USPS and DHL Express.
ShipStation‘s WooCommerce plugin, available for a free 30-day trial and starting at $9 per month, lets you make 50 shipments a month using branded labels and packing slips. Plans extending up to $159 per month add capacity all the way to 10,000 packages per month, with customized labels.
TradeGecko offers a free two-week trial, with subscriptions starting at $39 per month. TradeGecko includes inventory management tools and lets you create invoices and shipping documents. It also integrates with QuickBooks Online.
Accounting & Tracking
You have the option to add a plugin to help you sync orders and track payments through WooCommerce.
QuickBooks Sync for WooCommerce lets you automatically sync WooCommerce and QuickBooks. It’s compatible with QuickBooks Online, Desktop, and POS. The software is free but you’ll need a free or paid account with MyWorks. That’s free if you ship up to 20 orders per month, $39 per month for up to 1,000 orders per month, or $69 for unlimited orders.
Xero will cost you $79 per year to handle all your site’s accounting functions, including bank reconciliation and financial reporting â and even inventory tracking. You can set up automatic invoices for your eCommerce site, and Xero will sync with your WooCommerce store to keep everything straight.
Sales Analysis for WooCommerce, at $129 per year, has tools you can use to analyze your site’s performance and growth and to refine your sales strategy around best-selling products and profitable areas. Reports are easy to find on your WordPress Dashboard.
These are just a few of the many integrations that work with the WooCommerce platform. There are too many to list, but if you haven’t seen the right one here, or if you want to add marketing, subscriptions, or store management, check out the extension store on WooCommerce and you’re likely to find what you need for your site.
How To Save On WooCommerce
Choosing WooCommerce is a step in the direction of savings, since it’s hard to beat the free price tag. With so many options, though, it’s easy to see how you could add on…and add on…and add on â until your “free” eCommerce platform costs more than you intended it to. Fortunately, you don’t have to let that happen. Start with these money-saving tips.
Advertised fees for hosting and integrations almost always assume an annual subscription, not monthly. Choose the pay-by-month option for WordPress’s Startup hosting, for example, and you’ll pay $30 per month, or $360 per year. You can save almost 17%, or $5 per month, when you take the annual subscription. Yes, you’ll have to pay $300 upfront, but the savings add up over time, so if your budget allows, always choose the yearly price.
WooCommerce plugins and most outside integrations typically include a free trial period you definitely should take advantage of. Before you pay for a month or a year, test out the app and make sure it’s right for you. That’s especially important when you have a lot of options to choose from. You may discover that one of the more expensive options really is what you need, but you’re just as likely to avoid paying for some bells and whistles you’ll never use.
Choose Free For Now
WordPress and WooCommerce work together seamlessly and there are quite a few free (or very low cost) integrations available. There’s a built-in inventory management system, a shipping calculator for customers on the shopping cart page, built-in SEO tips, and more. It’s easy to start with a free option and upgrade later if you find it’s not meeting your needs.
Is WooCommerce Right For Me?
With a wide range of prices for hosting and integrations, WooCommerce is a good option for anyone who wants a personalized eCommerce site.
Choose WooCommerce If â¦
You already have a WordPress site or know how to use it
You want the ability to add on to your site and you learn and grow your sales
You’re new to eCommerce and will appreciate built-in support
You’re an experienced online seller and know how to add integrations to maximize your site
You want to sell physical and/or digital products
The Bottom Line: Calculating The Cost Of WooCommerce
WooCommerce doesn’t offer one-size-fits-all pricing, because your business needs are unique. With so many options, it’s easy to overload your site. Our advice? Set a budget for how much you want to spend upfront, then subtract the annual costs absolutely required to make your site hum. Use your remaining budget to have fun designing your eCommerce site with WooCommerce. Remember to create lines in your budget for these key items.
Integrations and add-ons
Don’t be afraid to take a chance with WooCommerce. With more than 3.3 million users â and counting â it’s a platform with broad appeal and versatility for all kinds of users. Build your site carefully, test-drive options for free whenever you can, and start with low-price choices and upgrade as needed. Your WooCommerce site won’t really be “free,” but when you start bringing in sales you’ll likely become convinced of its value.
The post The Complete Guide To WooCommerce Pricing appeared first on Merchant Maverick.
Over the last decade, business owners and entrepreneurs have increasingly turned to crowdfunders to raise funds. Having access to individual donors for business projects and creative endeavors has been a needed boon to businesses in the post-financial-crisis era.
Two of the names that often come up in the crowdfunding conversation are Indiegogo and GoFundMe. In this article, we’re going to examine these two crowdfunding platforms and compare their suitability for business fundraising.
Indiegogo VS GoFundMe
When evaluating Indiegogo vs. GoFundMe as crowdfunders, consider that while Indiegogo is for funding tech projects and creative works, GoFundMe’s crowdfunding is primarily for personal causes (such as medical emergencies). However, it can be used for business crowdfunding in certain circumstances.
Crowdfunding for tech products and creative works
Can launch a Patreon-style ongoing crowdfunding campaign (InDemand) after you reach your initial funding goal
Good customer support
Does not prescreen campaigns
5% platform fee
Limited communication between campaigners and backers
Can’t launch an InDemand campaign without having run a successful “traditional” crowdfunding campaign first
When Indiegogo launched in 2008, it was intended to be a financing platform for independent films â hence the name. However, Indiegogo’s mission soon expanded, and the platform now supports crowdfunding campaigns for tech gadgets, household products, and all manners of creative works (films, novels, music, podcast, tabletop games, and more).
While this article focuses on business crowdfunding, I should note that Indiegogo also permits fundraising campaigns for nonprofit organizations, though it disallows campaigns for personal causes and directs such campaigners to GoFundMe. Campaigns for nonprofit organizations are not subject to Indiegogo’s 5% platform fee.
If your crowdfunding campaign hits its funding goal, you then have the option of using Indiegogo’s InDemand service to crowdfund continuously (Ã Â la Patreon). InDemand lets you continue raising money for an indefinite period â and without fixed fundraising goals â after your initial campaign closes. Your initial campaign need not have been with Indiegogo â if your campaign was successful on Kickstarter or another service, you are still eligible to use InDemand. The one requirement is that your first campaign was successful in meeting its goals.
With Indiegogo campaigns, the platform takes a 5% fee from what you raise. This is typical of for-profit crowdfunding platforms.
GoFundMe is the world’s largest crowdfunder for personal causes and emergencies
No platform fee
You can keep your campaign open for an unlimited period
GoFundMe isn’t for most business projects
Some campaigners have trouble withdrawing funds
The platform doesn’t make it easy to offer rewards
Compared to Indiegogo, GoFundMe is a very different type of service. GoFundMe is used to campaign for funds to cover personal hardships, emergencies, and other compassionate causes. As such, GoFundMe no longer carries a platform fee, as the company decided that taking a cut from the crowdfunding campaigns of people in desperate situations was not a good look.
Here’s what you need to know: GoFundMe isn’t set up to be a business crowdfunder. GoFundMe’s brand is inextricably linked to charity, personal needs, and community support. While GoFundMe doesn’t disallow crowdfunding for business, the platform simply isn’t set up to support the sort of gadget-makers and podcasters that Indiegogo supports. Business campaigns without a compassionate component or social purpose may not succeed on GoFundMe and are likely to provoke the ire of people who see such campaigns as taking advantage of a platform intended for altruism and justice, not profit.
However, this is not to say that GoFundMe is never right for business crowdfunding. To get a sense of the circumstances that make a business crowdfunding campaign on GoFundMe appropriate, check out GoFundMe’s business fundraiser page and examine the campaigns that are succeeding. You’ll see lots of campaigns for local businesses struggling to recover from coronavirus-related hardship, riot damage, and other extenuating circumstances. You’ll also see campaigns from struggling longtime businesses seen as pillars of their respective communities, such as independent bookstores and theaters. Other GoFundMe business campaigns either highlight the personal challenges of the business owner or the socially-conscious purpose of the business â a store run by a veteran recovering from PTSD or a cafe devoted to hiring the formerly incarcerated would jibe with GoFundMe’s mission.
However, if you’re trying to raise money to create a video game or independent film, for example, and your campaign doesn’t have a social justice angle or a story of personal struggle, Indiegogo is the crowdfunder you’ll want to go with.
While Indiegogo and GoFundMe have divergent missions and are geared towards different kinds of crowdfunding campaigns, neither platform is very restrictive as to the kinds of projects that can start a campaign. Indiegogo explicitly allows five different types of crowdfunding campaigns:
Campaigns benefitting nonprofit organizations or nonprofit beneficiaries
Campaigns for products
Anything within “Community Projects” that is not a personal cause
Educational campaigns in the Tech and Innovation category
GoFundMe does not have strict guidelines as to who is allowed to use the platform, though the company states the following in its fundraising FAQ page:
We see people use GoFundMe to raise money for themselves, friends and family, or even complete strangers in random acts of kindness. People raise money for just about everything, includingÂ medical expenses,Â education costs,Â volunteer programs,Â youth sports,Â funerals & memorials,Â and evenÂ animals & pets.
Terms & Fees
Indiegogo’s terms and fees are pretty straightforward:
Your campaign can last up to 60 days
Indiegogo’s platform fee is 5%
The payment processing fee varies by country but is 2.9% + $0.30 in the US
An Indiegogo InDemand campaign has no duration limits, but the fees are the same.
As for GoFundMe, the terms and fees are thus:
Your campaign can last for however long you want it to last
GoFundMe does not charge a platform fee
The payment processing fee varies by country but is 2.9% + $0.30 in the US
The Campaign Process
The campaign process is quite similar for both of these crowdfunding platforms. While your campaign is open, you give people the option of contributing to your campaign on your project page. Both Indiegogo and GoFundMe provide you with access to promotional tools to bolster your campaign, and both platforms encourage you to use your existing social media channels to solicit support.
One aspect of running a campaign that differs between the two platforms is that with Indiegogo, the platform makes it easy to offer perks to your backers (such as a product, branded merchandise, tickets to a showing of your film, etc.) in exchange for a certain level of financial support. With GoFundMe, while you can offer rewards to your donors, you have to contact the donor and offer a reward yourself with no automated process to facilitate reward-giving.
Customer Service & Technical Support
Indiegogo offers an extensive help section to answer any questions you might have. For direct support, there’s a contact form you can use to get in touch with the company. There’s no live chat option, nor is there any phone support.
GoFundMe also offers a Help Center for support along with a contact form for questions. GoFundMe also provides live chat support from Saturday to Wednesday, 6 AM to 7 PM Pacific Time, though the company warns that “These hours are subject to change based on how many agents we have available.” Like Indiegogo, GoFundMe does not offer phone support.
Reviews, Criticisms, & Complaints
Both companies receive a high volume of complaints, which isn’t out of the ordinary for such widely-used services.
With Indiegogo, most reviewers have been largely positive about the company, and many campaigners have found the platform to be intuitive and flexible. Reviewers are also generally positive about Indiegogo’s customer support. Most Indiegogo complaints stem from miffed backers who never receive their promised rewards from failed and/or unscrupulous campaigns. Due to this, Indiegogo campaigners would be well-advised to advertise their responsibility and trustworthiness to reassure potential supporters.
While GoFundMe has its satisfied users as well, the company gets an even higher volume of complaints than does Indiegogo, many of which have to do with campaigners being unable to withdraw funds that were pledged to their campaigns. While GoFundMe campaigns are not pre-vetted, the company does closely examine campaigns before allowing the campaigner to withdraw funds, and sadly, this process catches a lot of needy folks at the worst possible time, resulting in a high volume of complaints. GoFundMe’s policy of requiring campaigners to give their full SSN before withdrawing funds comes in for a lot of criticism too.
Which Is Best For Your Crowdfunding Needs?
Generally, if you intend to crowdfund for a business project, the Indiegogo vs. GoFundMe question is pretty clear, considering Indiegogo is geared towards business projects while GoFundMe, for the most part, is not. However, there are some exceptions to this general rule.
Choose Indiegogo Ifâ¦
You’re crowdfunding to bring a consumer product to market
You’re crowdfunding for a creative project, such as a movie or book or podcast
You’ve already run a successful crowdfunding campaign, and you now want to raise funds continuously
Choose GoFundMe Ifâ¦
You run a business that has been impacted by a disaster or personal misfortune
You run a struggling business that is recognized as important to your community
Your business has a charitable/socially-conscious mission
The post Indiegogo VS GoFundMe: Which Is Right For Your Next Crowdfunding Campaign? appeared first on Merchant Maverick.
If you had “Coin Shortage because of COVID” on your 2020 bingo sheet, you can check that box and keep on hunting for other unique or unexpected consequences of this year’s coronavirus pandemic. A perfect storm between closed coin production and a decrease in moving coins through the banking systems has resulted in a coin shortage, and some small businesses are already feeling the impact.
Last month, the Federal Reserve issued a statement on the coin shortage, with Jerome Powell telling Congress: “What’s happened is — with the partial closure of the economy — the flow of coins through the economy has … kind of stopped. The places where you’d go to your coins and get credit … those have not been working.”
Coins Are Stuck In A Stopped System
Treasury Secretary Steve Mnuchin said in a virtual investment summit, “As it relates to coins, so many businesses shut down, a lot of coins got stuck in the system, so we are a little bit far behind on coins.”
There are several reasons why the COVID-19 pandemic has resulted in coins becoming stuck in the system. One is that on advice from the Centers for Disease Control (CDC), many small businesses stopped accepting cash in an attempt to slow the spread of the virus. The shift to cashless transactions and contactless payment systems resulted in fewer coins moving through the system.
With fewer coins going to the bank, banks cannot move coins back out into circulation. The Federal Reserve Task Force, started June 30, is expected to report on their suggestions to mitigate the shortage in early August. According to the Task Force:
“The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain … While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed.”
Decreased circulation has been accompanied by decreased coin output, as the U.S. Mint has dramatically slowed output in an attempt to protect its employees from contracting the virus.
Coin Shortage Impact On Small Business
Grocery stores, car washes, laundromats, convenience stores, dispensaries, vending machines, and gas stations are all businesses that depend on coins. Some of those businesses are still running as cash-only businesses in a credit world. Underbanked and smaller businesses are most at risk of being disproportionately affected by a cash shortage.
This also affects underbanked households who primarily pay with cash. According to an FDIC survey in 2017, 8.4 million households in the United States do not have a banking account of any type. If places are not accepting cash or offering change, or if businesses lose their ability to give change, the impact is greater among these households and cash-only businesses.
In non-COVID days, small businesses could easily receive change from their local banks. However, as some businesses stopped accepting cash and the U.S. Mint slowed production, fewer coins have found their way back to banks. (Third-party coin systems like Coinstar — which banks depend on for coin circulation — have also experienced fewer deposits since March.)
Many small businesses have resorted to rationing their coins. Jeff Lenard from the National Association of Convenience stores told CBS News that, “Right now cash is a problem. [Small businesses] are only being given a fraction of what they normally get in terms of coin.”
Part of the Federal Reserve’s coin task force mission is to safely increase production, but even that might not mean a quick-fix. According to an interview with the Las Vegas Review Journal, Ted Rossman, an industry analyst with CreditCards.com said, “The mint … is working overtime to try to pump more coins into the system … Iâve seen some projections as far out as November.â Rossman, however, thinks that things will look better sooner than that.
In the meantime, some small businesses are asking for coins from customers, and other places are buying coins. Whether those coins actually get into the hands of the small business owners that need them, however, is a different issue.
Yiming Ma, an assistant professor of finance at Columbia Business School, said in an interview with Forbes that the Federal Reserve can’t just flood the economy with coins and hope for the best.
“It’s not a one day and everything is solved type of problem. We should be thinking about how to allocate distribution so it’s taken back in a way to help communities and businesses that are in the most need of coins. It’s easier said than done.”
How Your Small Business Can Respond To The Coin Shortage
If your small business doesn’t need coins to survive, you should help distribute the coins you receive back to your local banks or into local cash-only businesses.
If you are a small business that relies on coins, however, don’t hesitate to put out a “Coin APB” into the world and on your social media feeds. Most of the coins that typically run through our economy are languishing in piggy banks and sofa cushions. Skip the bank and go straight to the community to see if you can nudge some of those coins back into circulation.
For other COVID-19 related coverage, check out Merchant Maverick’s Coronavirus Hub for more articles about how to navigate the pandemic.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected].
The post The Great Coin Shortage Of 2020 Threatens Small Businesses Across America appeared first on Merchant Maverick.
Earlier this week, the American Institute of Certified Public Accountants (AICPA) and Biz2Credit announced the launch of PPPForgivenessTool.com, a web platform that aims to help automate the forgiveness process for small business owners who took out Paycheck Protection Program (PPP) loans.
The tool — which is powered by technology developed by Biz2Credit — was revealed via an AICPA press release on Monday. CPA.com, the technology arm of AICPA, also helped launch the tool.
“We are now incorporating our PPP calculation and process recommendations into a dynamic PPP Forgiveness Tool to help drive a simple and effective forgiveness process,” CPA.com president and CEO Erik Asgeirsson said in a statement. “Our broader goal with this tool is to […] help drive a common approach to this process with the payroll and lender communities.”
PPPForgivenessTool.com incorporates the PPP calculator previously released by the AICPA in May. It takes into account all current SBA and Treasury guidance covering PPP forgiveness. Biz2Credit developed the tool using its proprietary Biz2X Platform, which was designed so financial institutions could serve business customers.
This latest effort by AICPA has the potential to become popular; the accounting organization claims that “tens of thousands of firms” have downloaded its loan amount and PPP calculators since April.
A Free PPP Loan Forgiveness Tool For Businesses
Any business approved for a PPP loan can use PPPForgivenessTool.com free of charge.
Borrowers can log into the site’s platform to fill out the PPP forgiveness application. An offshoot site is available for accountants filling out forms on a business’s behalf. According to AICPA, this tool will automatically generate all government-mandated forms related to PPP forgiveness.
After filling out the necessary information, the Small Business Association’s (SBA) 3508 or 3508 EZ forms can be signed by applicants electronically. All other required documents will be bundled into a downloadable file the borrower can submit to their lender.
AICPA promises that the tool will be updated based on final forgiveness guidance from the SBA and Treasury, so borrowers should wait before generating their final and signed form 3508. There’s also the possibility of automatic forgiveness for firms that received a PPP loan of less than $150,000, furthering evidence that businesses burdened by PPP loans may want to wait before going through with the current forgiveness process.
AICPA claims this new tool “will likely save hours of manual work” for those applying for PPP forgiveness.
“This online platform will produce a finalized forgiveness application that a borrower can take right to their lender for submission without any extra work,” Biz2Credit CEO Rohit Arora said in a statement.
Arora also highlighted the tool’s open architecture, which allows AICPA coalition members to integrate data into PPPForgivenessTool.com.
“It is extremely important right now for companies that serve small businesses to come together to help these business owners benefit from the Paycheck Protection Program,” he said. “An open architecture platform like this is an invitation to any company that works with small businesses, including PPP lenders.”
How To Apply For PPP Forgiveness
The PPP has undoubtedly provided much-needed aid for some impacted by COVID-19 — almost 5 million businesses have received its government-backed aid, after all — but the program has been plagued by plenty of problems since introduction. The forgiveness process is no different, although the SBA did release a simpler EZ forgiveness form last month.
Besides filling out paperwork and filing it with their PPP lender, businesses will need to hit a number of requirements to be eligible for forgiveness. Among these stipulations are:
Using funds for qualifying purposes, such as payroll or rent
Spending the loan within 24 weeks of disbursement
Maintaining full-time staff and payroll expenses
To dig deeper into the program’s rules, take a peek at Merchant Maverick’s in-depth guide to PPP forgiveness.
It’s worth noting that most borrowers may not be able to apply for forgiveness, even if they want to. That’s because many banks involved with the PPP simply aren’t ready — as Politico recently reported on July 20, only 20% of banks surveyed by the CBA are currently accepting forgiveness applications, with the SBA’s slowness to provide forgiveness guidance being chalked up as the primary reason for the delay.
Yesterday, the SBA did announce that its forgiveness portal for lenders would go live on August 10 (subject to Congressional amendments), potentially hastening banks’ desires to start accepting forgiveness applications.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
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In a recent installment of her Pivoteers & Pioneers series, Yulia Ovchinnikova invited the founder of Silicon Harlem, Clayton Banks, to speak to a business audience an hour and change north of Manhattan. Banks has been developing Harlem’s technology hub since 1994, a feat Ovchinnikova has been trying to replicate in her area through her business, the OpenHub Project.
Before Silicon Valley came to dominate the industry, another valley on the opposite coast was home to the nation’s burgeoning tech industry. At its peak, IBM employed over 7,000 workers at its plant in Kingston, a small city in New York’s Hudson Valley about halfway between New York City and Albany. Twenty miles down the Hudson River in the City of Poughkeepsie, IBM established laboratories for research and development. While not all of that infrastructure is gone — reports of IBM’s demise have been greatly exaggerated and, in fact, they’re doing some intriguing work on quantum computing in the region — the Hudson Valley’s reputation as a technology corridor has largely been consigned to the past. But it won’t remain there long. Not if Ovchinnikova, who operates out of Newburgh, has anything to say about it.
Ovchinnikova, who holds a Ph.D. in Economics from the Russian Academy of Science and an MA in Applied Mathematics and Computer Science from Moscow State Technical University of Electronics & Mathematics, has made a mission of revitalizing her adopted home’s tech industry. Since 2017, OpenHub, in collaboration with SUNY Ulster, has offered web development boot camps, an afterschool coding program for girls in the City of Newburgh, IT professional certifications, and frequent special events designed to bring existing tech workers together. The group’s mission? Building a strong, accessible technology hub for the region’s businesses, schools, and governments.
In October 2019, with the help of local sponsors, OpenHub held its inaugural HVTechFest, a two-day event that featured talks, panels, and a hackathon (an event where attendees are given a problem to solve, typically with hardware and/or software). The event turned out to be well-received, and spirits were running high.
Along Came COVID
Ovchinnikova and her team were well into the process of developing the second annual HVTechfest when New York became ground zero for the coronavirus outbreak in the US in March. While the Hudson Valley wasn’t hit quite as hard as New York City, it still had some of the highest infection rates in the state. The lockdown lasted longer here than in most of the country, putting significant strain on local businesses. Though the festival wasn’t to have been held until October 2020, the likelihood of being able to hold a successful mass gathering of that kind in 2020 appeared less and less likely. OpenHub needed to pivot.
But as it turned out, so did most other businesses.
OpenHub began to take notice of the other businesses in the area that were not only adapting to a new normal of restricted indoor occupancy but were actually thriving in it. The main difference between the restaurants and companies that were doing well and those that weren’t? How well they applied technology in their day-to-day processes.
Pivoteers & Pioneers
“Forcing people to go remote revealed differences in the availability of tech and readiness,” Ovchinnikova observes. “Addressing that digital divide is very important.”
With that in mind, the Pivoteers & Pioneers series was born. Conceived of as a free five-part webisode series for the age of social distancing, the program has focused on different aspects of the lockdown economy, ranging from restaurants, to banking, to telehealth, to tech groups like Digital Harlem. The fifth webisode, which debuted on July 10th, focused on education and how various school districts tackled the challenge of having to teach students remotely.
“During our 5 biweekly webisode series we reviewed important topics related to our current moment with COVID and closures,” explains Ovchinnikova, “These topics were actively engaging more than 500 Hudson Valley influencers, businesses, and educators.”
Watching these events, it becomes immediately clear that businesses and institutions have reluctantly entered a period of experimentation and rapid adaptation. The cost of failing to adapt to the “new normal” can mean a devastating loss of profits, but those who adapt successfully often uncover better ways of doing things. Many of these new methods and niches will persist long after the coronavirus crisis has ended.
Different school districts, for example, have wildly different ideas about how much remote school work to give children for optimal results. Similarly, viewpoints varied — sometimes strongly — on the potential of free municipal wireless internet to bridge the digital divide in those communities. Banks and credit unions discussed their strategies to make remote banking more effective by offering apps that eliminate the need to physically enter their brick-and-mortar branches to do things like deposit checks.
“These webinars were interactive and allowed people to share their experience and get actionable insights from participants working in the same area or industry,” explains Ovchinnikova. “We tried to define pioneers and pivoteers — those who were finding new approaches, or new ways of doing things in their business, serving their customers, finding new offerings, or discover a new niche.”
While the webinars are regionally focused, the topics they cover will likely be useful to businesses in any area that is struggling to maintain something close to normal operations during a full or partial lockdown. Interested business owners, or anyone else, can register for webinars on OpenHub’s site or view past ones on YouTube. Ovchinnikova encourages anyone interested in future content to subscribe to the YouTube channel.
Ovchinnikova says there’s been a lot of demand to bring the series back for another run, which she is considering, along with how to align OpenHub’s own COVID-related pivot with her longer-term goals of breathing new life into the Hudson Valley’s tech industry. At the moment, she still plans to hold HVTechFest 2020 in some capacity, even if the event ends up needing to be conducted remotely. In that sense, the web series has served as a test drive for how tech-related seminars and information could be presented to the community if an in-person event proves to be impossible by October.
“We saw a need, and we plan to continue with the webinar format,” says Ovchinnikova.
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