Inventory Management

November 27, 2019

Why You Should Consider A Self-Ordering Kiosk For Your Restaurant (Plus The 5 Best Kiosk POS Systems & How You Can Afford Them)

In the restaurant industry, business owners are constantly looking for areas where they can potentially cut overhead costs or increase their turnover rate even slightly to maximize their profits. But reaching that goal is often much easier said than done. Fortunately for these owners, technological advances in the industry might just have a practical solution. One of the more recent trends in the point of sale industry has been to offer self-ordering kiosks. What started as a novel or niche idea just a few years ago has now spread to a large number of the top restaurant POS companies, making it a feature that you may not even realize you can implement affordably.

There are different types of self-ordering kiosks as well. Some allow customers to walk through the entire purchasing experience on their own, punching in their order, walking through automated modifiers, and eventually paying. If you don’t want to lose the personal touch from your employees entirely, you can also add on-table kiosks that can simply ease the burden from a server by automating the payment process or allowing customers to browse a digital menu.

X Must-Have Features To Look For In A Good Kiosk POS

Even if your POS system does offer kiosk hardware and software, it doesn’t necessarily mean it will be a good fit for your business. You’ll want to make sure that it has all of the functionality you’re looking for to make it worth actually implementing. Here’s a few features that POS systems can offer in kiosk mode that you may want to check out.

Menu Building

Designing an eye-popping menu that highlights your unique or profitable items can be a difficult task. Having a kiosk can show customers appealing photos of each item and allow individuals to click on various menu options to either view a description or ingredients. This can lead to an increase in impulse sales and free up employees. It can also save you money on printing and laminating when physical menus get destroyed or when the menu simply changes. With most systems, menus can be updated quickly with a few button pushes.

Menu Prompts

Along that same vein, when a customer is filling out his or her order, the system can quickly and efficiently walk them through various options and areas for up-selling. These prompts and modifiers can be easily added in most POS software and can lead to a decrease in ordering errors and a potential uptick in sales.

Loyalty

How many times have you been making a purchase and, as you were ready to pay, a representative asks you if you want to enter your phone number or email address to receive promotions? By this point, most customers are usually ready to be done with their transaction and don’t feel like spelling out their information. An automated system can also make this process easier, letting customers enter their own information that is then automatically stored for future marketing. In some instances, you can also incentivize customers to sign up for loyalty by offering an immediate or future discount on a purchase.

Variety Of Payment Options

This is one of the most important aspects to consider. Today’s customers will look to pay in a variety of ways and a lack of options at your kiosk could turn them away. At a minimum, you will want a system that can process magstrip and EMV chip cards. However, many systems will also accept other methods like Google Wallet or Apple Pay. If your business also utilizes gift cards, you’ll want to make sure that your kiosks are set up to accept those as well.

Barcode Scanner

This is somewhat more of a niche item but, for convenience stores or quick-service cafes, it can be a life-saver. Having a scanner that hooks up to your kiosk directly can allow customers to purchase self-serve or ready-made items by ringing them up themselves and paying for them in a matter of seconds.

Kitchen Display System Support

If you’re operating a larger full-service restaurant with a busy kitchen, having your kiosk directly sync to your KDS is a necessity. This will allow your cooks to see exactly when the orders were placed and they can view any special instructions or modifications that customers put in themselves. It also eliminates a potentially time-consuming step for your employees who would otherwise have to take down the order and then go to a separate station to send it to the kitchen.

Customer Notifications

To increase the the efficiency of your restaurant, kiosks can alert customers that their orders are ready either on an individual screen or by sending a text or email directly to a mobile device if wait times are longer. This is also a useful way to gather customer information for future marketing campaigns.

Tip Prompts

It’s a simple feature but one that can make a huge impact to your business’s bottom line. Simply being given a prompt to add gratuity is proven to increase profits across the board and is a simple, non-intrusive way to, we’ll say gently nudge, customers to reward your employees for their exemplary service.

Surprising Ways Your Restaurant Can Benefit From A Self-Ordering Kiosk Set-Up

Reduce Labor Costs

Obviously kiosks, either at the table or standing alone, can do a lot of the work that would otherwise fall to employees. Not only can this reduce the sheer number of employees you might need, it can also improve the efficiency of your employees on hand by taking some of the busy work off their plate. Kiosks can also mitigate against issues like unexpected rushes or having an employee who calls in sick at the last minute.

Increase Check Sizes

It’s easy to program in modifiers and prompts within a kiosk that will walk customers through up-sells and add-ons. This can be done in an intuitive fashion and in a way that doesn’t come across as pushy and customers feel as if they have more onus in their decisions.

Increase Overall Efficiency

While the addition of kiosks may seem impersonal, it can dramatically streamline your operations. With customers given the ability to send their orders at their own time, it eliminates those common occurrences where a server has to come back because a table hasn’t made its decision yet or stalls at one particular group of customers who take a long time to complete an order. Servers also don’t need to then make a separate trip to another station to fire an order to the kitchen. Instead, your employees can focus on making sure customers have everything they need.

Increase Order Accuracy

Along these same lines, having customers inputting their orders directly obviously eliminates the potential for server errors and will increase the likelihood that food comes out exactly to a customer’s specifications. This makes for an overall happier experience for customers who are then more likely to leave a hefty tip.

Disadvantages & Concerns When Using Restaurant Kiosks

Impersonal

Many restaurants pride themselves on their customer service and hands-on approach to their customers. Cutting back on the amount of face-time your hand-picked employees get with these customers might be seen as damaging to a restaurant’s brand.

Potential Confusion

If you end up with a kiosk system that isn’t extremely intuitive or has an interface that customers struggle with even slightly, it could defeat the kiosk’s purpose entirely. Having a server or other employee that is having to routinely walk customers through the ordering process can instantly eliminate any cost-saving benefits the kiosk could provide.

Customer ReluctanceÂ

While the world in general seems to be trending toward automation more and more, there is still a large part of the populace that might be turned off by using kiosks to order as opposed to speaking to a human employee. A recent poll from Upserve found that 78% of customers said they would be less likely to frequent a restaurant that utilized self-serve kiosks. No doubt this current trend will take some getting used to for some customers.

Cost

While we’ve already discussed how kiosks may help your restaurant cut down on labor costs in the long term, you’ll likely need to do some math up front to determine if the investment is going to be worth it. In short, kiosks aren’t exactly cheap and, if not utilized correctly, they could end up being more trouble than they’re worth.

The 5 Best Kiosk POS Systems For Restaurants & How To Afford Them

Now let’s get to our bread and butter… telling you which point of sale systems might be the bet for you if you’re in the market for self-serving kiosks. The following systems are all among our favorites at Merchant Maverick and excel when it comes to providing kiosk functionality.

TouchBistro

TouchBistro is a hybrid system best-suited for small to mid-sized restaurants and other food-service businesses. In many ways, TouchBistro has always been on the cutting edge of POS technology with strong mobile ordering functionality and a sleek designed catered specifically to make the lives of servers easy. It also was early on the scene with an automated kiosk system.

TouchBistro’s system comes with customizable branding and an easy-to-use interface that can feature pictures and descriptions of your restaurant’s products. The kiosk supports all types of payments, including Apple Pay and Android Pay and syncs with TouchBistro’s Kitchen Display System as well for restaurants. As you would guess, the kiosk also walks customers through add-ons and combos and lays out prices and options in an easily digestible format.

Toast POS

Toast is an excellent POS company that is Android based and prides itself on usability and its outstanding customer service. The all-in-one system is ideal for pretty much any type of food-service establishment and has one of the better tableside ordering systems in the industry. The system is feature-rich but does charge extra for some of its services like loyalty and online ordering.

Toast’s kiosk system feature’s Toast’s trademark simple interface and offers convenient order notifications directly to phone or email, eliminating the need for buzzers. Like TouchBistro, you can also customize your screen, displaying your menu items. Toast comes with a convenient scanner integration as well for establishments with quick scan and go items and Toast kiosk also syncs directly to a KDS.

Upserve POS

Upserve is a cloud-based system that can handle any-sized food service establishment. Upserve features extensive menu building. It has a robust feature set, including strong inventory management and reporting and a simple, customizable interface. It also has strong tableside ordering functionality and a convenient Upserve Live function that allows managers to check on sales in real time from anywhere on an iPhone.

Upserve makes Bite Kiosk available and come with a unique algorithm that takes user data to help predict future customer behavior, allowing it to make suggestions and up-sell items automatically. It integrates seamlessly with Upserve, allowing for easy menu and pricing updates. It also syncs with Upserve’s loyalty program and, when purchasing, there are discounts for orders of 10 or more units.

Revel Systems

Revel is an extremely robust hybrid system that can fit with nearly any sized restaurant or retail establishment. The iOS based system has an extremely generous back end with inventory that can handle more than 500,000 SKUs and a wide variety of reports. It offers a wide variety of ordering options and has its own delivery management system plus a impressive array of integrations.

Revel also is available with an intuitive kiosk mode. You can easily sync your loyalty program to the kiosk, allowing customers to easily look up past orders or simply make a repeat order. It also comes with the ability to take gift cards as payment. Orders are directly sent to Revel’s KDS. The interface also make it easy to browse menu items or retail inventory.

Lightspeed Restaurant

Lightspeed Restaurant is a cloud-based system designed specifically for small to mid-sized establishments but with the capacity to handle larger businesses as well. Lightspeed has a slick interface and syncs with things like mobile ordering and ecommerce plus an excellent employee management system. It also offers a convenient pricing structure, making sure you aren’t charged for features you aren’t using.

Lightspeed makes it easy to switch on its kiosk mode and conveniently walks customers through the ordering process with potential ares for up-selling and modifiers. The menu automatically syncs up with kiosk mode, making changes simple. You can also create your own payment methods, allowing customers to either pay up front or wait until after their meal.

How Small Businesses Can Afford to Invest In Kiosk POS Systems

Whether you’re interested in large, standalone kiosks or individual table kiosks, the cost can add up quickly. There are a few payment options and most companies will allow you to lease their hardware which can bring down the initial price. However, the long-term cost of leasing these systems is almost never a good idea. Buying the hardware outright ultimately saves you money but that still doesn’t solve the problem of needing cash initially when things might be tight. Fortunately, you have some options.

As a small business owner, you have some flexibility when it comes to receiving a loan. You can apply for an alternative small business loan, which can provide you with cash quickly and can be a good option if you have less than stellar credit or aren’t bringing in much money. These loans can get you the cash you need but can also have somewhat high interest rates.

There are other small business loans that you can look into as well each with slightly different terms. Loans for fledgling restaurateurs are sometimes difficult to land as the industry is viewed as risky. However, if you have a well-designed business plan, the right documents in order, and a good sense of your finances, you can dramatically increase your chances at approval. And, if you’ve run the numbers correctly and can bring down your costs by implementing kiosks, you may be able to pay off the loan quickly.

Are You Ready To Make The Jump To A Restaurant Kiosk POS System?

So hopefully you have a good sense of what kiosk systems are and what potential benefits they could provide for your business. If used properly, self-ordering systems can dramatically bring down your labor costs, increase efficiency and keep your customers happy by speeding up orders and cutting down on errors. It’s also a trend that may become the norm in the restaurant industry sooner than later.

However, that doesn’t mean that there aren’t inherent risks in making that switch. Upfront costs need to be a heavy consideration along with your customer base and your restaurant’s brand. If you rely heavily on your servers for their unique brand of customer service or have a clientele that may be wary of a more automated ordering process, it may not be worth the risk.

As a final thought, keep in mind that, if don’t immediately have the cash on hand to purchase a handful of self-ordering kiosks, you have options there as well with numerous small business loans that may be at your disposal. As with anything, do your research, crunch your numbers, and don’t hesitate to ask questions when making this important decision.

The post Why You Should Consider A Self-Ordering Kiosk For Your Restaurant (Plus The 5 Best Kiosk POS Systems & How You Can Afford Them) appeared first on Merchant Maverick.

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November 20, 2019

Simplify Your Small Businessâs Year-End Accounting With These 9 Easy Tips

It’s that time of year again — time for holiday parties, sparking lights and decorations, and gifts under the tree. As a small business owner, the holidays can add even more to your already full plate (and no, we’re not talking about your big family dinner). One of the most wonderful times of the year can quickly become one of the most dreaded for small business owners and entrepreneurs because of one little phrase: year-end accounting.

Despite being a hassle, though, year-end accounting serves several important functions. The year-end accounting process helps you prepare for tax time. You’ll also run critical financial reports that give you a clear picture of the financial health of your business. This helps you determine any action you need to take in the future to stay on track, boost your profits, or hit other company-wide goals.

Every business owner needs to do their year-end accounting. The good news, however, is that there are steps you can take to simplify the process. Some of these steps can be done at the end of your company’s calendar or fiscal year, while other steps are performed on an ongoing basis. Integrate these tips into your accounting workflow to save time, avoid overlooking errors, and be prepared for your year-end accounting process.

Use Accounting Software

If your business isn’t already using accounting software, what are you waiting for? Today’s accounting software allows you to keep your transactions organized and automates processes such as reconciling bank accounts or sending payment reminders. Depending on the software you choose, you’ll have access to a variety of accounting features that can help you throughout the year … and at the end of the year. This includes invoicing, estimates, expense tracking, inventory management, and time tracking. Your accounting software also allows you to run important financial reports needed for year-end accounting. If you’re new to accounting, don’t worry — most software is easy enough for anyone to use, even if you didn’t major in accounting! (If you don’t believe us, check out our top easy accounting programs.)

The software you choose should fit the needs of your business. For example, if you operate a small business with a handful of clients and only need basic features like invoicing and reporting, free accounting software may work for you. If you have a larger business with more extensive accounting needs, there are plenty of paid options available that offer additional features at an affordable price.

As the end of the year approaches, selecting and learning how to use your new accounting software can be a burden to a busy business owner. If your end-of-year to-do list is too long to add a new task, take some time to at least explore your options so you can have a fresh start for the new year.

Regularly Invoice Customers

Regularly invoicing your customers is necessary for a number of reasons. Not only does this help improve the cash flow of your business, but it also saves time with year-end accounting. In other words, don’t wait until the last minute to invoice your customers — make life (and year-end accounting) easier by invoicing your customers throughout the year.

The same holds true for invoice reminders. Your customers and clients get busy, too, and can easily overlook an invoice. Sending out payment reminders helps you get paid faster, improving your cash flow and reducing the number of unpaid invoices you have to deal with at the end of the year.

Your invoicing software or accounting software makes it easy to send invoices and payment reminders, as well as receive payments from your customers. Of course, features vary based on the software your business uses, but many programs offer recurring invoices and automated payment reminders that help you get paid faster with less work on your end.

Keep Track Of Your Income & Expenses Throughout The Year

For a business owner, there are few things more stressful than shuffling through receipts, invoices, and bank statements to get your finances in order. Not only does waiting until the last minute create more work for you (or your bookkeeper), but rushing through makes it easier to miss errors that can affect everything from your financial statements to filing your taxes. Don’t wait to track your income and expenses. Simplify your year-end accounting by tracking income and expenses throughout the year.

You can track your income and expenses through your accounting software. At a minimum, you should include the date of the payment, the amount of the payment, and the payor or payee. For further organization, you may even break down your income streams and expenses into categories if this is an option in your accounting software.

Like many of the other steps in this article, the benefit of tracking your income and expenses is two-fold: it simplifies your year-end accounting and also allows you (or your accountant) to more easily find tax-deductible expenses.

Reconcile Your Bank Accounts Every Month

Accounting is all about balance, and reconciling your bank accounts can help ensure you maintain that balance. To put it simply, reconciling your accounts means that you compare documentation (such as invoices or bills) to ensure they match the transactions in your bank accounts. Sound difficult? Not to worry — your accounting software can come to your rescue again.

Sure, you could sit down and manually compare your bank statements with your bills, receipts, and invoices … or you could let the software do the work for you. Many programs offer a reconciliation feature that lets you securely connect to your business bank accounts. The information is compared to transactions that have been input into your software. If the numbers don’t match up, you know that there’s an error somewhere in your accounting — maybe you forgot to enter an expense, for example. Bank reconciliation goes beyond just user error; it is also a way to detect bank errors or even fraudulent activity.

Reconciling your bank accounts should be a regular bookkeeping task that your business performs at least once per month. Balancing the books and detecting errors on a regular basis is far easier and less time-consuming than waiting until it’s time to do your year-end accounting. Plus, if you notice an error at the end of the yar, it may be too late to set it right.

Separate All Personal & Business Expenses

In a perfect world, all small business owners would have their personal and business expenses separated by using different bank accounts. Unfortunately, this isn’t the case for all businesses. If you use one bank account for personal and business expenses, those will need to be separated as part of your year-end accounting process.

Why separate your expenses? Two words: IRS audits. If the IRS has reason to believe that you’re writing off personal expenses as part of your business, you could be audited. And if you don’t have your finances in order, you’ll find it more difficult to get through this audit, potentially paying more money due to poor record-keeping.

Fortunately, some accounting software provides easy, hassle-free options for separating your expenses. If you don’t have separate bank accounts, look for a program that offers this feature, such as Wave. You should also consider opening a business bank account for improved organization heading into the new year.

Count Your Inventory At The Beginning Of The Year

While your accounting software may have an inventory tracking feature, you should never skip over manually counting your inventory. By counting your inventory, you can verify that the data in your software is correct. Your inventory at the beginning of the year should match the closing inventory from the previous year.Â Counting your inventory is also a way to calculate the cost of goods sold, and is required for several tax forms.

There may be discrepancies in your accounting software and your manual count. This isn’t uncommon and could be due to a number of reasons, such as broken products or items that were stolen. Identifying these discrepancies keeps your books accurate and prevents interruptions to your business, such as unexpectedly running out of stock.

You may also find that you need to clear out some stock as you head into a new year. Products that are obsolete or aren’t selling, for example, can be sold at a reduced price or even donated, which may qualify as an additional tax deduction. Need more year-end sales advice? Check out our top holiday sales tips.

One thing to note is that your inventory should be counted on a day that your business is closed. Products should not be shipped or sold until the inventory is counted and reconciled in your accounting software to ensure accurate counts.

Run Year-End Reports

Running financial reports is a critical step in year-end accounting. These reports give you a clear picture of how your business is doing financially. These reports are also used when filing your tax return. In addition to showing how your business performed through the year, you can also use these reports to set budgets and goals for the year ahead.

There are a few reports that you should always run at the end of each year. These include:

Profit & Loss Statement: A summary of costs, expenses, and revenues that show whether the business operated at a profit or a loss.
Balance Sheet:Â Summarizes the company’s assets, liabilities, and equity.
Expense Report:Â A report that tracks expenses necessary for business operations, including reimbursable travel expenses of employees.
Mileage Log:Â A report that reflects the beginning and ending mileage on a vehicle used for business purposes.
Payroll Summary:Â Summarizes data for paid employees, including wages, taxes, and deductions.
Sales Tax Summary:Â A summary of the sales tax you have collected, as well as sales tax you have paid toward your expenses.

You may opt to run additional reports to have a more comprehensive view of the financial state of your business, such as a Statement of Cash Flows or Sales By Item. You should also consult with your accountant to find out about other reports that may be required for filing your tax return.

Most accounting software allows you to easily run at least basic reports, such as P&L Statements and Balance Sheets. For more advanced reporting, a software upgrade may be required. Always make sure to check each report for accuracy. Once you’ve confirmed that your reports are accurate, it’s time to analyze your business performance. Did you meet your financial goals? Are there areas for improvement? Use this data to set a budget and financial goals for your business for the year ahead.

Take Care Of Year-End Payroll

As the end of the year approaches, you can tackle year-end payroll tasks. While some tasks are better reserved for the month of December, you can actually get a jump on completing these tasks by starting in October or November.

To get started, first verify that your company information, such as tax ID numbers and mailing address, are accurate. Next, verify the information of your employees and contractors. This includes taxes, wages, Social Security number or Tax ID, filing status, and mailing address. If information is incorrect, an employee or contractor should review and submit an updated W-9 or W-4.

Also make sure that you prepare in advance for payroll periods that fall during the holidays so there isn’t a delay in payments. In December, you can also run payroll for employee bonuses and make any necessary adjustments.

The Payroll Summary that was mentioned in the previous section should be used to verify that all information is correct. Once you’ve confirmed that all employee information and payroll summary data is correct, you can gather the documents you need to send out 1099-MISC forms and/or W-2s in January. If your payroll processor or accountant will be sending out these tax forms, make sure that everything is in order and you have all required documentation in order to have the forms prepared and mailed out prior to the deadline.

Lock Your Closing Periods

Once you’ve completed your year-end accounting, it’s time to lock your closing periods — or close the books. Once you’ve locked your closing periods, you will be unable to add or make changes, so make sure that you’ve completed all of the necessary steps of year-end accounting before closing your books. Many accounting programs allow you to lock closing periods quite easily just by selecting a date.

If you did find that you made an error, all hope isn’t completely lost. Some software, such as QuickBooks Pro, allows you to set a password that can be used to add, remove, or update transactions.

Start Fresh In The New Year

This all may seem a bit overwhelming, but it’s worth it to have a fresh start for the new year. You’ll be ready for tax time, have new goals in mind for your business, and have a better understanding of your company’s current financial situation.

While some of these steps may be time-consuming (I’m looking at you, inventory counting), knowing what needs to be done and tackling tasks throughout the year will save time and help ease the stress that comes with year-end accounting. Good luck!

The post Simplify Your Small Businessâs Year-End Accounting With These 9 Easy Tips appeared first on Merchant Maverick.

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November 5, 2019

WooCommerce Review: Pros & Cons of Using WooCommerce for an Online Store

WooCommerce is the most popular ecommerce plugin for WordPress, which is the Internet’s most popular content management software.

Explore WooCommerce’s Feature Set

Explore my WooCommerce Setup Guide

WooCommerce was originally developed by a small theme / web design firm in 2011. It grew rapidly among the WordPress community due to its feature set, but also due to its business model.

Same as now, you could download & use the full WooCommerce plugin for free from the start. WooThemes made money by selling compatible designs, support, and from specific extensions (e.g. to connect to a credit card processor).

In 2015, Automattic bought WooCommerce from WooThemes. Automattic is the software company run by Matt Mullenweg, the original author of WordPress software.

Ever since, the development of WooCommerce has been tightly coordinated with the development of both self-hosted WordPress and Automattic’s hosted WordPress.com software.

So that’s enough introduction. The point is that WooCommerce is legit, WooCommerce is growing, and WooCommerce can be a great fit for many storeowners…but not all.

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

What is WooCommerce?

To run an ecommerce website, you only need a few additional features. You need a product listing, a shopping cart, a payment processor, and order functionality that will merge & manage all the order information within a database. That’s it.

Because of that, ecommerce platforms are very similar to general website software…with just a bit of added functionality.

And like general website software, your choice of software depends on your personal desire for control / customization vs. convenience.

It’s a bit like real estate. A house provides maximum control. But you have to deal with maintenance, contractors, and random issues. A hotel offers zero control or customization, but they take care of *everything*.

WooCommerce lives on the more control / customization end of the spectrum. If Etsy & Amazon are hotels, then WooCommerce is a house.

WooCommerce is a software plugin that adds ecommerce functionality to WordPress, which is general website software (aka “CMS”).

And WordPress is part of a 3 part bundle that “makes a website” –

domain (your address on the Internet)
hosting (where your website files live)
software (what generates the files & pages that make up your website)

In other words, WooCommerce can help WordPress build a stand-alone store instead of a single-family home.

Now, this leads to the first overarching choice with WooCommerce.

Your choice is that WooCommerce is *part* of that 3 part bundle. It directly competes with other WordPress ecommerce plugins.

But…it also competes with other big bundled ecommerce solutions. And many big competitors deliberately bundle domain, hosting, software & ecommerce into a single, simple monthly price.

That’s great – and there are plenty of upsides & downsides to that bundling. But it’s important to be aware of since exploring the pros & cons of WooCommerce is a bit like comparing apples & oranges with other ecommerce solutions.

But – we’ll do it anyway. I love WooCommerce for what it is, but it’s not for everyone. Here’s a few pros & cons of WooCommerce both in comparison to direct & indirect competitors.

Pros of WooCommerce

Most ecommerce platforms have a series of strong advantages, and WooCommerce is no different. Here are a few reasons to use WooCommerce, not only instead of other WordPress plugins, but also instead of other ecommerce solutions.

Long-term Cost & Value

WooCommerce is free to download & free to use. If you have WordPress installed on your hosting account, you can navigate to Plugins –> Add New and add it to your website right now.

Explore my WordPress Ecommerce Setup Guide here.

WooCommerce is also fully functional with no add-ons or extensions.

That means that your annual website costs could be as low as ~$120/yr, depending on what hosting plan you have.

For contrast, the average low-tier ecommerce bundle with a hosted service like Shopify (review), BigCommerce (review) or Wix (review) will run around $360/yr for a single website.

But it gets even better for WooCommerce.

Since your main annual cost will be for a hosting plan, you can maximize the value of your hosting account with multiple websites.

If you had 4 small WooCommerce powered websites on your hosting account, then your annual per website costs would be $30/yr.

To run 4 small ecommerce websites with Shopify or Wix, your annual per website costs would be at least $1,440/yr.

For example, one of my earliest clients had a personal website, a home decor blog, a cat collar store, and an embroidery store – all on her same hosting account.

All 4 sites used WordPress, and the 2 store used WooCommerce. It helped her defray the costs and keep her 2 stores profitable – since they were side-hobbies anyway.

But it gets even better for WooCommerce.

WooCommerce comes fully-featured and fully supported with no transaction fees of any kind. There’s no “premium tier” to move to. Your long-term per-feature costs will always be lower with WooCommerce.

Also, almost all of WooCommerce extensions are flat-fee and under $100. You have access to a huge and rapidly expanding library of advanced, complex ecommerce features for flat-fee optional cost.

And, lastly, since WooCommerce works within WordPress, you get a double cost benefit for any free or premium plugins that you already want to use with your website.

For example, the most popular Redirection plugin for WordPress is free. And it’s free for WooCommerce too, since WooCommerce is integrated with your website.

If you are already paying for speed, security, and anti-spam for your existing WordPress website (with something like JetPack), then you can simply extend that subscription to cover your store as well.

And, you can piece together any 3rd party software based on cost, need, compatibility, etc.

If we stick with the housing analogy with WooCommerce, you can sub-lease rooms to help with the rent, your home office can benefit from your general security bill, and you can add-on *exactly* as your budget allows.

Now…all these massive cost benefits for WooCommerce comes with a few massive caveats, which I’ll cover in the cons. But on face value, WooCommerce is an incredible short-term and long-term value for any storeowner.

Integration with WordPress

WordPress software powers more than 1/3rd of the entire Internet. And it’s popular for a reason – it works well, it’s incredibly versatile as software, and it has a huge community (both for-profit and non-profit) supporting it.

And WooCommerce benefits from all three reasons as well, since it’s been a part of the broader WordPress community for years now.

This seamless integration with WordPress is important because WooCommerce can pull features in from an entire universe of plugins, themes, tutorials, and values that simply does not exist anywhere else.

For example, Yoast SEO has long been a hugely popular plugin with lots of international translations, advanced SEO feature support, and good usability.

There is no hosted platform with anything like it (or like any of Yoast’s excellent competitors). But since WooCommerce is integrated with WordPress…Yoast is integrated with WooCommerce as well.

The same goes with popular themes. Themes will support the same PHP structure as WooCommerce. In fact, developers will often go ahead and add bonus features to WordPress themes to make it extra appealing to WooCommerce users.

Plus, WordPress has long upheld the values of the Open Web with full RSS support, nice permalinks, W3 valid code, cross-browser compatibility, and full control over your code, content & data.

f you want to leave WooCommerce, it’s easy and well-supported. Your data is only accessible to you – and anyone you grant permission to (not the other way around).

Lastly, if you have an existing WordPress powered website and want to add ecommerce, WooCommerce makes it as seamless as any other plugin so that you don’t have to style & support a store on a completely different platform.

Support from Automattic

Automattic is a company founded by Matt Mullenweg, who is also the author of WordPress software.

WordPress software is free, open-source and community supported. But Automattic is the for-profit company that makes & sells tools for WordPress software.

They run WordPress.com, a bundled hosted service for WordPress software in addition to JetPack, a speed / security / utility kit for WordPress websites, and WooCommerce.

Now, there’s a whole universe of for-profit companies offering WordPress plugins, themes, support, etc. They all do great work, and I recommend many of them.

But for longevity, consistency, and building more 3rd party integrations, I think it’s in WooCommerce’s advantage to be owned by Automattic.

There are plenty of WordPress software companies, and plenty of good ecommerce plugins. In fact, some have features and setups that I like a bit better than WooCommerce (mainly for digital goods only).

But the bottom-line when comparing WooCommerce not only to other plugins, but also to Shopify, Squarespace, Wix, etc – is that you need a large company that will be around and have an financial interest in keeping the software cutting-edge.

Additionally, since Automattic is still private and venture-funded – they are still in “growth” mode, which only means more investment in features & customer service.

WooCommerce’s ownership is a huge advantage for choosing WooCommerce over other ecommerce plugins, and put it at parity with other ecommerce solutions offered by large, stable companies.

Versatility & Compatibility

A few fun facts about WooCommerce –

You can use it to sell memberships
You can use it to sell recurring licenses
You can use it to sell digital goods
You can use it to sell apppointments
You can use it to sell affiliate, drop-ship, or even Amazon products
You can “hack” it and combine to sell really anything you can imagine

The actual plugin is incredibly versatile and compatible with a huge range of uses. Like WordPress, your imagination is likely more limited than the tool is.

The plugin automatically creates & manages a range of page types including products, product categories, orders, confirmations, etc

It’s compatible not only with most single-use WordPress plugins but also with large site-type plugins like the BuddyPress social network plugin and bbPress forum plugin.

In other words, you can create a niche social network with forum and online store all with the same WordPress install.

3rd Party Integrations

WooCommerce has a large & growing Apps & Extensions store. It’s a library of premium extensions that allow you to harness powerful 3rd party software for things like payments, shipping, cross-product listings, inventory management, marketing, bookkeeping, and more.

If you are an offline merchant who loves a 3rd party processor (like Square), then you can use an extension to add it to WooCommerce.

If you love your 3rd party shipping or inventory software, it will probably integrate with WooCommerce.

Ease of Use & Onboarding

This pro has a caveat – I’m assuming that you have worked with WordPress before. If not, this will actually appear in the cons section.

But, if you have, WooCommerce’s onboarding is amazing. They’ve upgraded the process to the point where my WordPress Ecommerce Setup guide isn’t nearly as useful as it used to be.

When you add the WooCommerce plugin, you are instantly moved into a setup sequence that will help you list your first product, set up your page types, and get all your basic settings ready to roll.

You really can be set up to sell in minutes. And unlike some plugins that create a dedicated section for use, WooCommerce automatically folds pages, media and options within the existing WordPress install so that everything appears where you think it should be (e.g., media settings, categories, etc).

Control & Customizations

Since WooCommerce is a PHP-based plugins that integrates with your WordPress install, you have direct access to the code via browser and FTP.

You can add, remove, edit scripts and bits of code to your heart’s content. If you want to edit your checkout flow or your error codes or your analytics script or your CSS – then you just do it.

You are not limited by a platform’s plan or code access or script limitations. If you want to hire a designer or developer or marketer, you can hire from a huge pool rather than a narrow field.

There are even custom extension developers who will create whatever extension for WooCommerce that you want.

Do you run a store than needs to accept Dogecoin? Or a very specific shipping option? You’ll need to use WooCommerce – because no major ecommerce platform will be building that anytime soon.

Cons of WooCommerce

Every ecommerce platform has natural disadvantages since there is an inherent tradeoff between control & convenience. You’ll likely find a lot of WooCommerce complaints and issues around the Internet.

Here’s a few of the key disadvantages you’ll find with WooCommerce – and using WordPress as an online store in general.

Ease of Use & Onboarding

WooCommerce & WordPress both try to make ease of use & onboarding (i.e., moving a new user to an active user) simple, straightforward and intuitive.

There are plenty of guides around the Internet, along with prompts, Q&As, support, and more.

But the bottom line is that there is still a basic tradeoff between control and convenience.

For a beginner, WooCommerce has a learning curve that is even steeper than WordPress’ learning curve. When you install WooCommerce, you not only have to learn the basic jargon of an ecommerce store (listings, checkout flow, payment tokens), but you also have to learn the basic jargon of WordPress (permalinks, posts, pages, plugins, etc) and the basic jargon of any self-hosted website (difference between HTML & CSS, page load speed, etc).

For a beginner with zero experience with WordPress or running a website, WooCommerce will require a steep learning curve. Now, it might be worth it if you have the time & patience to learn everything.

But compared to drag & drop basic online store builders like Weebly or Wix or even comprehensive ecommerce platforms like Shopify, WooCommerce’s onboarding & setup is a huge downside.

Technical Maintenance

Sticking with the house / apartment analogy, you know how you can just call the landlord when something goes wrong?

Yeah, you can’t do that with WooCommerce. There is some semblance of support via your hosting company and Automattic (if you are a premium JetPack subscriber) and the WooCommerce community. But there’s no single place to just call and get something fixed.

In fact, like a landlord, there’s no one who will come by and just check on the HVAC filter, the roofing, and basic structure.

Running WooCommerce is really like owning a house. There are plenty of people who will help you maintain it. In fact, many are quite reasonable and even quicker than a landlord.

But…when it comes down to it, *you* and *you* alone are in charge of keeping your website maintained, available, and operating.

Plugins will notify you of security updates, but you will need to install them and manage any new conflicts. Your hosting company will give you support, but you need to know what questions to even ask. You’ll need to know how to troubleshoot.

This downside comes directly from the benefit of maximum control. With maximum control & freedom comes maximum responsibility.

Again, you can get customer support for WooCommerce. In fact, some hosting companies offer “WooCommerce Hosting” with management included.

But compared to online store builders like Wix & Weebly or ecommerce platforms like Shopify & BigCommerce, WooCommerce is lacking in simple technical maintenance.*

*The one caveat here is the WordPress.com option – they are a hosted version of WordPress run by Automattic. Since they bundle hosting, software, support & more – you can get many of the benefits of WooCommerce without this downside. They’ll take care of all the maintenance…at an extra price.

Speed & Security

With the continued growth of mobile and the profitability of hacking, website speed & security are more important than ever.

Like the situation with technical maintenance, WooCommerce leaves you basically in charge of speed & security – even though there are plenty of native & 3rd party options to help you.

WordPress & WooCommerce are inherently secure when installed with a good hosting company, maintained, and used with basic security best practices.

Additionally, WordPress & WooCommerce are inherently fast when installed with a good hosting company, maintained and used with basic speed best practices.

But your weakest link is the toughest part with both speed & security.

For hosted platforms like Weebly, Wix, Shopify or BigCommerce (and the WordPress.com option) – this is an area where they truly shine. Your website lives on their infrastructure with their team of professionals watching constantly for issues and keeping software cutting edge.

In fact, several have bounty programs where they pay hackers to deliberately seek vulnerabilities in their systems. They will also have direct partnerships with payment processors for real-time fraud alerts.

Overall, speed & security should not be an issue for WooCommerce storeowners – including beginners. But, like with owning a house, you are still the one responsible for any issues.

It remains a key downside of WooCommerce, especially if you store starts growing rapidly from hundreds of visitors to hundreds of thousands of users – which brings us to the next downside.

Growth & Scaling

Since WooCommerce is a plugin for WordPress, it has to work within WordPress’ basic functionality.

And WordPress’ basic functionality is not built specifically for ecommerce, it’s built for versatility.

This issue means that the way WooCommerce works starts to break down when you get above a certain threshold of “queries” – ie, requests of the database.

And unlike browsing content, or really any other type of functionality, ecommerce can generate *a lot* of queries, very quickly, and in a short space of time.

Imagine WooCommerce is a single dude standing between a group of customers and a library. Imagine they all need to request books and return books before paying you, getting change, and then leaving. Now, if they go one at a time, it’s fine. In fact, you can probably push the guy to handling several returns and new books at once.

But imagine they all show up at once, say, on Thanksgiving, and start shouting out lots of book orders. And they start giving books to put back…and they all want to pay all at once.

Well, the dude is going to get really confused, tired, and crash. Not because he’s not good but because it’s a not-ideal system.

That’s WooCommerce’s core problem – handing *lots* of add to cart and checkout events all at once.

Ecommerce platforms that are built from scratch for ecommerce like Shopify and BigCommerce do not have this issue. They use a completely different set of technologies to avoid WooCommerce’s inherent issues.

Now, before a bunch of WordPress folks’ start sending me emails, WooCommerce can absolutely scale to hundreds of thousands of orders. WooCommerce says that the issues is a myth and has examples to prove it.

All true. But it take a lot of work & expertise to make that type of scaling happen. Here’s an interview with a top WordPress expert on making WooCommerce scale…and even he discusses it like a huge project, not something built-into the product.

If you have a small, growing store, this is a non-issue. You can solve problems as they come.

But if you are starting what will be a large ecommerce site very quickly, it’s a critical disadvantage to be aware of – especially when looking at other Enterprise ecommerce options.

Potential Long-term Costs

WooCommerce’s price (free!) and potential long-term value are amazing for beginners and anyone on a budget.

However, you may have noted the potential need for 3rd party help, WooCommerce can become quite expensive.

One of my earliest clients back paid me $1200 to fix several emergency issues that she simply could not figure out before her sales deadline.

She had chosen WooCommerce specifically to control costs (rather than integrate with an existing content site). But it will take several years of no issues to recoup those costs compared to a Shopify plan.

Since WooCommerce is not bundled with hosting and other software, it’s also easy to let regular costs get out of control. Once you start paying for automated backups, security scanning, managed hosting, CDN, premium plugin extensions, and more – your monthly costs may be much higher than anticipated (again, just like homeownership vs. renting).

Now, all these costs are *potential* costs. And if you have the time and patience, many storeowners would rather than potential costs that they choose rather than an high guaranteed cost. But it’s a potential downside to be aware of.

Future of Ecommerce

Ecommerce is changing rapidly. And the speed of change is happening faster everyday.

Apps like Poshmark, Depop, Pinterest, and Instagram are moving more ecommerce to happen seamlessly within apps via “headless” ecommerce backends.

In other words, some ecommerce platforms are simply inventory & order tracking systems where the actual shopping, cart, and payments happens within a 3rd party app.

In some ways, WooCommerce’s open structure should be an advantage. And yet, cutting edge ecommerce relies increasingly on APIs and direct integrations, which are not WooCommerce’s specialty.

Shopify is able to leverage its size, infrastructure, and tech team to create cutting edge integrations. Same with MailChimp, Square, and a whole universe of similar marketing tools.

And all that does not even start to discuss Amazon.

All that to say, WooCommerce does have a current disadvantage with ecommerce as it is currently evolving.

However, it could have a huge advantage as content becomes more important. And it will forever have an advantage as somewhere that you truly own & control. It’s this bet that Automattic has their money on.

It’s a potential downside to consider. There’s no right answer, it all depends on your goals, expertise, and view of the future. There’s a reason why so many website builders like Wix, Weebly, Squarespace, WordPress.com, and GoDaddy GoCentral are adding basic ecommerce functionality.

All of which leads us to a few direct comparisons.

WooCommerce Alternatives

There is a whole universe of ecommerce solutions on the Internet. Compared to 2003, this is a really good problem to have. But as an online storeowner, navigating choices is still an issue. Here’s a quick rundown of the main alternatives to WooCommerce, along with links to further posts.

WooCommerce vs. Other WordPress Ecommerce Plugins

There are lots of ecommerce plugins, but most are pretty terrible. WooCommerce’s main direct competitors are –

Easy Digital Downloads – a focus on simple digital goods.
WP Easy Cart – a focus on simplicity but limited add-ons.
WP Ecommerce – a non-Automattic comprehensive option. Meant for developers due to limited support options & simple extensions.
NinjaShop – a focus on simplicity but limited add-ons.

WooCommerce can also run on WordPress.com as part of a hosted bundle. This option removes a lot of WooCommerce’s negatives, but also increases WooCommerce’s costs & removes some of the self-hosted freedoms.

WooCommerce vs. Shopify

I wrote a full comparison of WooCommerce and Shopify here. The short version is that unless you have a specific reason to use WooCommerce and plan on running a growing ecommerce store, then you’ll probably do better with Shopify.

WooCommerce vs. BigCommerce

I wrote a full comparison of WooCommerce and BigCommerce here. The short version is that unless you have a specific reason to use WooCommerce and plan on running a growing ecommerce store, then you’ll probably do better with BigCommerce.

WooCommerce vs. Wix

Wix is much more user-friendly compared to WooCommerce. However, Wix also constrains your options more than even WordPress.com and hosted ecommerce platforms like Shopify. If you have a small store and want drag & drop convenience, then use Wix.

WooCommerce vs. Magento

Magento used to be a much tougher competitor to WooCommerce until Magento’s sale. Now, self-hosted Magento is going away. If you run an enterprise site, then scalability will likely make your choice for you. You’ll want Magento (or other Enterprise options). If you have a small ecommerce shop, then WooCommerce will be a better option.

WooCommerce vs. OpenCart

OpenCart is well-respected open-source ecommerce software. If you are building a ecommerce store from scratch and you want to host it yourself, then OpenCart is a solid option. However, it is declining in use (and with that, apps & extensions & developers). Unless you have a reason to use OpenCart, WooCommerce will give you access to a larger open-source community.

WooCommerce vs. Ecwid

Ecwid is less an ecommerce solution and more of an “anywhere shopping cart”. You can quickly add it to an existing website (ie, a plain WordPress website) and provide an ecommerce experience of a sort. However, it does not integrate with your backend. You also will have trouble competing for inbound marketing. It’s a good option to quickly add ecommerce functionality to your website without going through the WooCommerce setup process.

WooCommerce vs. Prestashop

PrestaShop is well-respected open-source ecommerce software. If you are building a ecommerce store from scratch and you want to host it yourself, then PrestaShop is a solid option. However, it is declining in use (and with that, apps & extensions & developers). Unless you have a reason to use PrestaShop, WooCommerce will give you access to a larger open-source community.

WooCommerce Review Conclusion

WooCommerce is the best ecommerce solution for 3 types of storeowners –

Storeowners with technical resources who want to heavily customize their store or use unique functionality.
Website owners who have a content-driven website and want to add-on a complementary, but seamless store.
Storeowners who are highly cost-conscious and feel comfortable investing time rather than money into running their own website.

If you fit those buckets, I’d highly recommend checking out the main WooCommerce website and using my guide to setting up your WooCommerce-driven ecommerce store.

If you don’t fit in those buckets, I’d highly recommend checking out a hosted solution. Explore my ecommerce platform quiz here. Or if you are building a small store (a dozen products), explore my online store builder quiz here.

Lastly, be sure to explore my guide to marketing your ecommerce store. So many stores fail, *not* because of platform…but because of a bad marketing plan. Spend as much time planning your marketing as you spend researching your store software.

The post WooCommerce Review: Pros & Cons of Using WooCommerce for an Online Store appeared first on ShivarWeb.

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October 16, 2019

Everything You Need To Know About Merchant Services

Being a first-time business owner can be a daunting experience. In addition to having to comply with a dizzying array of legal requirements, youâll also have to have at least a working knowledge of credit card processing, inventory management, and other topics. At one point or another, youâre going to encounter the term merchant services, and youâll want to know what it’s all about.

To put it in the simplest terms, unless youâre only going to accept cash and paper check payments in your business, youâll need to understand merchant services: what they are and where to get them from. Merchant services â and the providers who offer them â are essential to providing your customers with the largest range of convenient and secure payment methods. Signing up through a merchant services provider will â provided you choose the right one for your business â result in increased sales that more than offset the cost of those services.

In this article, weâll explain what merchant services are, and provide explanations of each of the primary products that are available from merchant services providers. Weâll also tell you how to find the best merchant services for your business, and what features you should look for in choosing a provider. Finally, weâll give you a brief overview of the best merchant services providers in the industry for small businesses, and explain which providers are the best choice for certain types of companies.

What Are Merchant Services?

The term âmerchant servicesâ can be confusing, because there are a lot of different definitions floating around out there, and they donât all agree on every detail. For our purposes, weâll define merchant services as the products and services a business needs to accept and process any form of payment other than cash or paper checks. This includes processing services for credit cards, debit cards, eChecks, ACH payments, and the newer mobile wallet services such as Apple Pay and Google Pay. It also encompasses hardware and software, such as credit card terminals, point-of-sale (POS) systems, payment gateways, virtual terminals, and mobile processing systems.

Note that there are also a variety of ancillary services that are often bundled with merchant services, including inventory management software, gift card/loyalty programs, online reporting features, merchant cash advances, and many others. These are not considered to fall under the rubric of merchant services, as theyâre not strictly necessary to enable your business to process credit card transactions. They can still be pretty useful, however.

Where do you go to get merchant services? Why, to a merchant services provider (MSP), of course! Again, the term âmerchant services providerâ is an umbrella term that covers any type of business offering merchant services. However, there are really two main types of merchant services providers: (1) merchant account providers, who offer true full-service merchant accounts with a unique merchant identification number for your business, and (2) payment services providers (PSPs), who offer credit card processing services, but donât provide a true merchant account. PSPs aggregate your account with that of other businesses using their services â a low-cost solution that can be very affordable for a small business thatâs just starting out.

Hereâs a brief description of the primary merchant services that your business will need to accept credit cards, debit cards, and eCheck/ACH payments:

Credit/Debit Card Processing: Of all the merchant services you might want to add to your business, credit (and debit) card processing is obviously the most important one. If a customer pays for a purchase with a credit card, youâll undoubtedly want some cold, hard cash to make its way into your bank account â and that wonât happen unless you have a service to process the transaction. As weâve noted above, you can get credit card processing through either a merchant account provider or a payment services provider (PSP). In either case, your provider will usually rely on a larger, direct processor (also called a backend processor) to approve and process transactions. While large direct processors such as First Data and Elavon offer merchant services, they arenât good choices for a small business. Popular payment services providers (PSPs) include Square (see our review) and Stripe. Traditional merchant account providers are much more numerous, with Dharma Merchant Services (see our review), National Processing (see our review), and Payment Depot (see our review) among the best choices for small and medium-sized businesses.
eCheck/ACH Processing: In addition to accepting credit and debit cards, you might also want to allow your customers to pay by check. While old-fashioned paper checks are rapidly declining in popularity, they can be accepted without the need for a check processing service. However, youâll have to take the check to the bank yourself, wait for it to clear, and hope that it doesnât bounce. eCheck and ACH (Automated Clearing House) payments bring advanced security and convenience to paying by check, allowing you to scan physical checks for processing or accept an ACH payment from a customer on your website. While some providers include these features with every merchant account, itâs more common for them to be offered as optional add-ons. In this case, youâll usually pay an additional monthly fee (typically around $20 – $30) for the service. For more information about these alternative payment methods, see our articles Everything You Need To Know About Accepting ACH Payments and The Complete eCheck Payment Guide.
Credit Card Terminals: Obviously, youâre going to need some type of physical credit card terminal to accept card-present transactions in a traditional retail setting. Options range from simple mobile card readers that require a smartphone or tablet (and the appropriate app) to function all the way up to complex point-of-sale (POS) systems that also include a variety of software features to help you run your business. While magstripe technology was the only option for many years, today EMV (i.e., chip card) is the standard acceptance method in the United States, Canada, and Europe. We also recommend that you seriously consider investing in hardware that also accepts NFC-based payment methods such as Apple Pay and Google Pay, as theyâre rapidly gaining in popularity and offer a higher degree of security than either magstripe or EMV. We also recommend that you buy your equipment outright. Terminal leases are wildly over-priced and should be avoided at all costs. Buying your hardware directly from your processor is usually the best option, but in some cases, you can save money by buying from a third party and having your equipment reprogrammed by your provider. For an overview of some great equipment options, see our article The Best Credit Card Machines And Terminals.
Point-Of-Sale (POS) Systems: As weâve mentioned above, a POS system is basically a credit card terminal with additional integrated software services built-in. Inventory management is a popular option, but there are also software add-ons for employee management and scheduling, online reporting, customer information management, and many others. While a POS system is a worthwhile investment for some businesses (such as restaurants), theyâre overkill for others. Beware of sales representatives trying to sell you a POS system if your business doesnât really need one. For more information on how to select a POS system thatâs right for your business, see our article POS 101: Choosing A POS System.
Payment Gateways: If your business has an online presence and makes sales through your website, youâre going to need a payment gateway to process those transactions. Payment gateways essentially perform the same function as physical credit card terminals, connecting your customerâs payment information with your providerâs processing network to approve the transaction and send you the money from the sale. Because not all merchants need a payment gateway, theyâre often offered as a separate feature (with an additional monthly gateway fee). However, itâs becoming increasingly common for providers to offer a gateway thatâs part of an integrated payment processing system designed to support both retail and eCommerce sales channels. For more information on what to look for in a payment gateway, see our article The Complete Guide To Online Credit Card Processing With A Payment Gateway.
Virtual Terminals: Used primarily by mail-order or telephone-order businesses, a virtual terminal is a software application that allows a laptop or desktop computer to function as a credit card terminal. Transactions can be manually keyed in or swiped/dipped with a compatible card reader (these usually connect via USB or Bluetooth). Retail merchants should be aware that, in most cases, youâll pay significantly higher processing rates if you manually enter the card data rather than using a card reader.
Integrated Payment Platforms: One common complaint we hear from merchants is that they often have to sign up with one vendor for a merchant account, another vendor for a payment gateway that has the special features they need, and possibly other vendors for things like online shopping carts or POS systems. Merchant services providers are well aware of this problem, and in recent years theyâve started to offer integrated, cloud-based processing systems that combine all these separate features into a single product. Obviously, they have a vested interest in keeping you tied to their particular ecosystem. However, there are genuine benefits to this approach for merchants as well. You wonât have to worry about compatibility problems or dealing with multiple customer service departments to keep everything humming along. Integrated systems can also (usually) save you money over signing up with multiple service providers. Finally, having all your business data accessible through the cloud is a significant advantage, even for smaller retail-only merchants who donât have a website. At the same time, youâll want to ensure that a vendorâs integrated system has all the features you need for your business before signing up.
Security & Fraud Prevention Features: Ensuring the security of your customersâ credit card data is essential for any business â retail, online, or a combination of the two. Obviously, you also want to take every step possible to minimize the chances of a fraudulent transaction. Security features such as tokenization and encryption protect your customersâ payment data and reduce the chances of experiencing a data breach. For online companies, fraud prevention features such as Address Verification Service (AVS) and card verification features such as CVV, CVV2, or CVC should be available through your provider at a minimum.

For more in-depth information on merchant services and merchant services providers, please refer to the following articles:

What Is A Merchant Services Provider?
What Is A Payment Service Provider?
What Is A Merchant Account?

High-Risk Merchant Services

Finding a good merchant services provider is challenging enough, but itâs even harder if your business is considered high-risk by the processing industry. What does it mean to be high-risk? Basically, certain business types are considered to be a riskier underwriting proposition by processors, and theyâll either refuse to give you a merchant account or put you in a high-risk account that invariably will be more limited and more expensive than what a comparable low-risk business would receive.

Besides being in an inherently high-risk business type (i.e., vape shops, online gambling, etc.), you can also find yourself in the high-risk category if you have an unusually high chargeback rate or your personal credit isnât so great. Fortunately, high-risk merchant service providers are available to serve your business. These providers usually work with a variety of banks (some of them located offshore) and direct processors to get you approved for an account. Your processing rates will be higher, and the terms of your contract wonât be so generous, but youâll have access to a stable account and youâll be able to accept credit and debit cards without any problems.

If youâre having particular difficulties in finding a high-risk account, you might want to consider an eCheck/ACH-only option. We only recommend this option for merchants who have been truly unable to get a merchant account, as youâll potentially lose sales when your customers find out that they canât use their credit cards.

For more details about high-risk industries and high-risk processing, check out our article Are You A High-Risk Merchant?.

How Do You Find Great Merchant Services?

Over the years, the question weâre most frequently asked is some variation of âWhatâs the best provider for my business?â Unfortunately, the sheer number of variables involved usually makes this question difficult to answer. As a very general rule, the best merchant services provider for your business is the one that offers the best combination of features, low processing rates, reasonable account fees, and favorable contract terms. In many cases, this might be such a close call that several providers might be able to offer you a good deal, without any single one standing out above the others.

One point we continually try to impress on merchants is that the best provider for your business is not necessarily the one with the lowest processing rates â or even the lowest costs in general. The most important thing to look for is a provider that offers the best overall value. Things like high-quality customer service are often worth paying a little extra for in the long run.

As a general rule, weâd also point out that payment services providers (PSPs) are usually a better value for small or newly-established businesses, while merchant account providers are more suited to medium-sized or larger companies that have been around for a while and have an established processing history. Signing up with a PSP is usually a good idea when youâre just starting out, but at some point, youâre going to reach a level where youâll need the stability and security of a true merchant account. It will probably cost you less money as well, as lower processing rates become more important as your monthly processing volume increases.

If youâre looking for a good merchant services provider, the resources available here at Merchant Maverick are an excellent place to start. Weâve reviewed almost all of the major players in the industry, and can give you an in-depth look at the pluses and minuses of each provider. As a starting point, we recommend that you look over our Merchant Account Comparison Chart, which compares several of the top-rated providers side-by-side.

How Much Should You Pay For Merchant Services?

No one likes to overpay for anything, and the merchant services industry makes it all too easy to pay too much without even realizing it. With complicated processing rate plans, highly-variable account fees, and surprise incidental fees that can show up on your processing statement without warning, figuring out whether youâre getting the best deal can be very difficult. If youâre new to payment processing, youâll want to evaluate pricing information and rate quotes from several providers before picking one to use for your business. This is also true if you already have a processing service and are thinking about switching to a (hopefully) less expensive provider.

Below is a quick overview of the various processing rate plans that will be the single most significant factor in determining your overall costs. Be aware that different pricing models will be more cost-effective for some businesses than others. Youâll want to have a good idea of your total monthly processing volume and your average ticket size to make valid comparisons between different providers.

Flat-Rate Pricing

The simplest pricing structure is flat-rate pricing. Despite the name, none of the providers offering this type of pricing actually use just a single rate for all transactions. However, youâll usually have only two or three rates to be concerned with, making your costs stable and predictable. Merchant services providers offering flat-rate pricing typically have a single rate for all card-present transactions, and another rate (or two) for card-not-present transactions. Often, there will be a higher rate charged for card-not-present transactions that have been manually keyed-in, rather than processed over a payment gateway.

Flat-rate pricing works best for very small businesses, mostly because you usually wonât have to pay any additional account fees. Be aware, however, that the flat rates themselves are often significantly higher than what youâd pay under an interchange-plus or subscription-based pricing plan (see below). For this reason, flat-rate pricing is usually not a good deal once your monthly processing volume exceeds a certain amount (typically around $10,000 per month).

Payment services providers (PSPs) usually offer flat-rate pricing as their only processing rate option. Popular providers offering this type of pricing include Square (see our review), Stripe, and PayPal.

Interchange-Plus Pricing

Arguably the most cost-effective pricing method for medium-sized businesses, interchange-plus pricing passes your transactionsâ interchange fees on at cost and also includes a fixed markup for your provider. For example, a typical interchange-plus rate quote might look like interchange + 0.30% + $0.15 per transaction. While the underlying interchange rates themselves can vary wildly, this pricing method is more transparent than others because youâll always know exactly how much of a cut your provider is taking.

Interchange-plus pricing is usually only available through a merchant account provider offering a full-service merchant account. Because these types of accounts also typically have a number of monthly and annual fees, they arenât the best choice for very small businesses. Depending on the provider and the particular details of your business, the threshold where youâll start to save money with interchange-plus pricing can be anywhere from $1,500 to $10,000 in monthly processing volume.

Popular providers offering interchange-plus pricing include Dharma Merchant Services and National Processing,Â among others. While these two companies offer interchange-plus rates exclusively, many run-of-the-mill providers offer a combination of tiered and interchange-plus pricing plans. Unless you specifically negotiate for an interchange-plus plan, youâll usually be given a tiered pricing plan. Although itâs still the most common type of pricing plan in the processing industry, we donât recommend tiered pricing under any circumstances because it makes it impossible to determine how much of a markup your provider is charging for each transaction. Itâs also the most expensive type of rate plan, in most cases.

Membership (Or Subscription) Pricing

A variation of interchange-plus pricing, membership pricing has only been available for a few years from a small number of providers. Pricing is similar to interchange-plus, except that you donât pay a percentage of each transaction as part of your processorâs markup. Thus, a typical membership pricing quote might be interchange + $0.15 per transaction. However, thatâs not all youâll pay. Membership pricing also includes a monthly membership fee that ranges from as little as $49 per month to as high as $199.00 or more per month. This fee combines all of your other account fees into a single charge, plus includes an extra amount to cover the per-transaction percentage markup that you otherwise wouldnât be paying.

Membership pricing isnât for everyone. The high monthly membership fee makes it particularly unsuitable for very small or seasonal businesses. However, high-volume businesses can save a substantial amount of money over what theyâd pay with a traditional interchange-plus pricing plan. In some cases, these savings can amount to several hundred dollars per month.

If youâre interested in seeing whether membership pricing is right for you, we highly recommend both Fattmerchant (see our review) and Payment Depot (see our review). Both of these companies provide excellent service and a full set of features to fulfill the needs of any business.

Monthly Billing VS Pay-As-You-Go

Most merchant services providers use one of two billing methods: (1) monthly billing, or (2) a pay-as-you-go billing model. With monthly billing, youâll pay a variety of separate fees for each service included with your account. These fees will be deducted once a month, at the end of your billing cycle. The processor will deduct any processing fees before sending the funds to your bank account, but if you have a statement fee, software subscription fees, etc. those will be billed at the end of the cycle.Â Pay-as-you-go billing, on the other hand, doesnât have monthly fees. Youâll only pay for the transactions that you actually process, and those fees are deducted before the processor deposits your funds in your bank account. If you don’t process anything in a month, you won’t pay anything — which is not true of a monthly billing plan.

If you sign up with a traditional merchant account provider, you can expect to be on a monthly billing plan, regardless of whether youâre on a long-term contract or a month-to-month arrangement. Payment services providers, on the other hand, usually use a pay-as-you-go model. This lowers costs for small businesses and also is the best option for seasonal businesses that arenât running year-round. Despite the additional fees, a monthly billing plan can actually save medium-sized or larger businesses money due to the cost savings of using an interchange-plus or membership pricing plan.

The Best Merchant Services For Small Businesses

As weâve noted above, some merchant services providers are a better fit for certain types of businesses than they are for others. Below, weâll briefly introduce our top picks for the most common types of businesses. Note that if your business falls into one of the categories described below, the provider we list wonât be the only good choice available to you. Rather, theyâre generally the best choice for most businesses that are similar to yours. If youâre interested in one of these providers, be sure to read the full review to learn more about them before deciding to sign up.

Vendor	Best For	Monthly Fee	Retail Rate	Online Rate	Contracts
Payment Depot	Mid-sized businesses ($10k-$25k/month)	$49-$199	0% + $0.15 markup*	0% + $0.15 markup	Month-to-month
Fattmerchant	High-volume businesses ($25k+/month)	$99-$199	0% + $0.15 markup*	0% + $0.15 markup	Month-to-month
Dharma Merchant Services	Non-profits	$20	0.15% + $0.07 markup*	0.20% + $0.10 markup	Month-to-month
Square	Micro-merchants & low-volume	$0.00	2.6% + $0.10 total	2.9% + $0.30 total	Month-to-month
PaymentCloud	High-risk businesses	Varies	Varies	Varies	Varies
PayPal	Online businesses	2.70%	2.9% + $0.30 total	$0.00	Month-to-month
Stripe	Tech-driven businesses	N/A	2.9% + $0.30 total	$0.00	Month-to-month

*Markup over standard interchange and assessment rate with interchange-plus pricing (our preferred pricing plan for transparency of fees).

Best For Micromerchants & Low-Volume Businesses: Square

Square (see our review) has been around since 2009, and has quickly become the leading choice for small businesses looking to accept credit cards with a minimum of fuss and paperwork. Square offers flat-rate pricing and uses a pay-as-you-go billing method that doesnât include any additional monthly account fees (unless you sign up for one of their optional services).

Square

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Squareâs most common processing rates are as follows:

2.75% for all retail and mobile (card-present) transactions
2.9% + $0.30 per transaction for all online (card-not-present) transactions
3.5% + $0.30 per transaction for all manually entered (also card-not-present) transactions

If youâre looking to minimize your up-front costs, Square offers a free mobile card reader that plugs into your smartphone or tablet. However, itâs magstripe-only. We highly recommend that you upgrade to either the $35 EMV-enabled reader or the $49 contactless + chip reader, which adds NFC compatibility and Bluetooth connectivity.

The company has expanded its services tremendously over the last ten years, and now offers far more features than we can discuss here. However, itâs still an excellent choice for merchants looking for a simple, low-cost solution. Squareâs flat-rate pricing is more expensive on a per-transaction basis than interchange-plus, but you’ll save money overall due to the lack of extra account fees. This pricing structure works best for businesses processing less than $3,000 per month, in most cases.

Best For Mid-Sized Businesses ($10K-$25K/Month): Payment Depot

For larger businesses with a stable processing history that need to upgrade to a full-service merchant account, Payment Depot (see our review) is an excellent choice. The company offers membership-based processing rates, true month-to-month billing, and a full range of products and services for retail or online businesses.

Payment Depot

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Membership fees at Payment Depot range from $49 per month up to $199 per month, depending on your monthly processing volume. This single fee covers all your merchant services, so thereâs nothing extra to have to pay. You can also receive a significant discount for paying your membership fees on an annual, rather than monthly, basis.

The companyâs processing rates start at a simple interchange + $0.15 per transaction, and go down with higher monthly processing volumes. There are four basic membership plans, which are tied to your monthly processing volume. For really large businesses, thereâs also a custom pricing option.

As long as your monthly processing volume is high enough that membership-based pricing makes sense for your business, Payment Depot is an excellent choice that will save you a significant amount of money over traditional merchant account providers. Just be aware that the company only serves US-based merchants, and they donât accept high-risk businesses.

Best For High-Volume Businesses (Over $25K/Month): Fattmerchant

Fattmerchant (see our review) also offers a membership-based pricing plan. However, their membership fees are high enough that their pricing structure only works well for an established business with a significant monthly processing volume.

Fattmerchant

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The companyâs membership fees start at $99 per month for businesses processing under $500,000 per year. Above this amount, youâll pay $199 per month. Bear in mind, however, that this one fee covers everything the company provides â unlike traditional vendors who nickel and dime you for every âextraâ service they provide. Processing rates start at interchange + $0.15 per transaction, with lower rates available for higher processing volumes.

Because of the steep monthly subscription fee, Fattmerchant isnât cost-effective for small businesses with a low monthly processing volume. However, if your volume is high enough, you can potentially save hundreds of dollars a month under this pricing structure. All accounts are billed on a month-to-month basis with no early termination fee (ETF), so you can always switch processors if things arenât working out.

Fattmerchant is an excellent choice for businesses that are large enough to benefit from the companyâs pricing structure. They offer excellent customer service and a terrific cloud-based integrated payments platform that will have you up and running in no time. However, they donât accept high-risk merchants, and theyâre only available in the United States.

Best For Online Businesses: PayPal

For a newly-established eCommerce business, you canât go wrong with PayPal. Pay-as-you-go billing means that, in most cases, youâll only pay for your transactions â and nothing else. Note, however, that the companyâs virtual terminal comes with a hefty $30 per month fee, so theyâre not such a great choice for a mail-order or telephone-order business.

PayPal

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PayPalâs flat-rate pricing structure couldnât be any simpler. Online transactions are always 2.9% + $0.30 per transaction, while manually entered and virtual terminal payments are 3.5% + $0.15 per transaction. The companyâs PayFlow Gateway comes bundled with every account, allowing you to quickly and easily integrate it with your website. There are no additional gateway fees, either.

While PayPal is a great choice for a small online business, be aware that the companyâs high processing rates will no longer be cost-effective once your business grows beyond about a $3,000 per month processing volume. At that point, you should seriously consider upgrading to a true merchant account with one of our other recommended vendors. Also, PayPal has relatively limited customer service options and doesnât serve high-risk businesses.

Best For Tech-Driven Businesses: Stripe Payments

If your business is 100% online and you donât plan to ever expand into the retail sector, Stripe Payments is a great choice for your payment processing needs. The company offers simple flat-rate pricing, pay-as-you-go billing with no monthly fees, and a host of developer tools for integrating their platform into your website.

Stripe Payments

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Pricing couldnât be more straightforward. All eCommerce credit and debit card transactions are charged 2.9% + $0.30 per transaction. International cards are also charged an additional 1.0% if currency conversion is needed. ACH payments are charged 0.8%, with a maximum charge of $5.00 per transaction.

As with any payment services provider, account approval is easy and can be accomplished online. However, the chance of later having your account shut down for any number of reasons is also higher. Stripe does a better job than most PSPs when it comes to customer service, offering live chat and telephone support on a 24/7 basis.

Overall, Stripe is a great choice for fledgling eCommerce businesses. Just be aware that your account wonât be as stable as a true merchant account, and the companyâs flat-rate pricing isnât cost-effective at higher processing volumes. Itâs also not available for high-risk merchants.

Best For Nonprofits: Dharma Merchant Services

Nonprofit businesses looking for a full-service merchant account will have a hard time finding a better choice than Dharma Merchant Services. One of our favorite processors, the company seems to be run like a nonprofit itself sometimes. Of course, itâs actually a public benefit corporation (B-corp), something thatâs almost unheard of in the processing industry.

Dharma Merchant Services

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Whether youâre a nonprofit or not, Dharma offers full-service merchant accounts that are billed on a month-to-month basis to all its users. There are no long-term contracts and no early termination fees (although you will have to pay a one-time account closure fee of $25 if you close your account). For nonprofits, the company offers special interchange-plus processing rates of interchange + 0.15% + $0.07 per transaction for retail transactions and interchange + 0.20% + $0.10 per transaction for eCommerce transactions.

Dharma offers a full range of products and services, including the popular Clover lineup of terminals and point-of-sale (POS) systems. The company also provides some of the best customer support in the industry. However, be aware that their pricing structure works best for merchants processing over $10,000 per month, and they donât support international or high-risk businesses.

Best For High-Risk Businesses: PaymentCloud

If youâve read this far, youâve probably noticed by now that most of our top choices for merchant services donât support high-risk businesses. Fortunately, if youâre in the high-risk category, there are high-quality vendors out there that specialize in serving the high-risk community and provide excellent services at a reasonable cost. PaymentCloud is one of our favorites due to their reputation for top-notch customer service and because they offer many features that are typically reserved for low-risk merchants only.

PaymentCloud

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Unlike many of our other top providers, PaymentCloud doesnât disclose their processing rates or account fees on their website. Because they work with a wide variety of banks and direct processors to get you an account, pricing is highly variable and subject to negotiation. While they have a reputation for fair pricing, you can expect to pay more than what a comparable low-risk business would pay. However, this is true with any high-risk merchant account provider.

The company offers a free credit card terminal with each account, which you can use for as long as you keep your account open. They also donât charge an account setup fee, which also helps to set them apart from most traditional high-risk providers. Finally, PaymentCloud is one of the few providers to offer support to the burgeoning CBD oil industry. However, they only allow CBD products that are applied externally â no food items or other ingestibles. If youâve had a hard time finding a merchant account for your high-risk business, be sure to check them out!

If youâre looking for additional options beyond the providers weâve profiled above, check out the following articles for more great choices:

The 5 Best Small Business Credit Card Processing Companies
The Cheapest Credit Card Processing Companies For 2019
How To Accept Credit Card Payments For Your Small Business

The Final Word On Merchant Services

Merchant services can be a complicated subject, and finding a merchant services provider thatâs a good fit for your business is often a real challenge. Youâll want to carefully evaluate the unique needs of your business, and factor in how much you can afford to pay to add the capability to accept credit and debit cards. In most cases, the added expense will more than pay for itself in additional sales.

All of the vendors weâve profiled above are excellent choices in their particular niche. However, they arenât the only good choices out there. So, we encourage you to look over the articles weâve linked to, and carefully read the full reviews of any vendor youâre considering. Most of the best merchant services providers for small businesses offer a very transparent disclosure of their processing rates and account fees on their websites, so check those out as well.

If youâre still having trouble deciding which company is best for you, youâll want to actually âcrunch the numbersâ and make a more informed analysis of what your potential costs will be. An excellent resource for doing this is our Cost Analysis Workbook, which will walk you through the steps necessary to estimate your overall costs with various providers. The workbook also includes spreadsheets to do the math for you â it couldnât be easier!

The post Everything You Need To Know About Merchant Services appeared first on Merchant Maverick.

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August 26, 2019

Can You Really Run A Cash-Only Business?

If you’ve been reading this website for a while, then you know that we began as a place focused on demystifying the world of credit card processing for small businesses. You might wonder, then, what we’re doing writing an article about a cash-only business. The fact is, we see both advantages and disadvantages to such a business, and we want to share some of our thoughts with you.

While most businesses do take some cash payments, some businesses are particularly suited to be cash-only. These businesses tend to be small and provide the services or sell their merchandise in person; the items sold also tend to be of smaller value. Below we have compiled a non-exclusive list of such businesses as well as a general overview of advantages and disadvantages for taking only cash payments.

Credit Card Processing Doesn’t Have To Be Expensive

heading	Payment Depot	Fattmerchant	National Processing	Dharma	Square
	Payment Depot	Fattmerchant	National Processing	Dharma Merchant Services	Square Payments

	Get Started Review	Get Started Review	Get Started Review	Get Started Review	Get Started Review
Availability	US-based businesses	US-based businesses	US-based businesses	US-based businesses	US, Canada, UK
Serves in-store, mobile, and eCommerce	â	â	â	â	â
No early termination fee	â	â	â	â	â
Compatible with most POS systems	â	â	â	â
Rate matching / negotiableÂ	â	â	â	â
High-quality sales and customer service	â	â	â	â
Pricing model	Interchange-plus	Interchange-plus	Interchange-plus	Interchange-plus	Flat rate
Monthly fee	$49	$99	$10	$20	$0
Standard retail rates	0% + $0.15 markup	0% + $0.08 markup	0.20% + $0.10 markup	0.15% + $0.07 markup	2.75% total
Good for higher volume (over $20K/month)	â	â	â	â
Good for mid volume ($10K-20K/month)	â	â	â	â
Good for lower volume (under $10K/month)	â		â		â
	Get Started with Payment Depot	Get Started with Fattmerchant Payments	Get Started with National Processing	Get Started with Dharma Merchant Services	Get Started with Square Payments

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Each of the above companies provides excellent customer service and fair pricing.

Why Would You Want A Cash Business, Anyway?

It is no secret that we are moving towards a cashless society, where customers carry little to no cash and make purchases through credit, debit, or cash cards. However, if you look carefully, you’ll notice that cash-based businesses are still lurking everywhere. Any kid can set up a lemonade stand or mow a neighbor’s lawn. Typically, you would pay them in cash. Same with a street musician or a hotdog stand by the sidewalk. Most likely, you will pay cash to your babysitter and maybe your dog walker too.

Cash-only businesses are typically new or “temporary” or side hustles, and they take only cash because they want to minimize start-up costs, they do not accept returns, and they do not have the time or desire to listen to pushy salespeople to learn the ins and outs of payment processing or buy any related equipment. In other words, they take only cash because cash is easy.

The Best Cash Businesses

Some businesses are especially suited as cash-only business. Below is a non-exclusive list to give some examples of such businesses.

Coffee, food cart, or food truck operator
Bakery, deli, or lunch stand
Small restaurant
Lawn mowing service
Laundromat
Vending machine operator
Errand service
Farm stand/farmer’s market vendor
Arts and crafts show vendor
Street artist (face painter, caricature artist, street musician, or similar)
Babysitting services
Pet services (pet sitting, pet grooming, pet training, dog walking. etc.)
Personal trainer or fitness instructor
Handyman services
Music teacher/tutor
Hair/nail salon or barbershop

Note that these businesses tend to be single-person operations that can be set up easily and quickly. With some notable exceptions like a laundromat, they tend to be mobile, with no physical business address. The goods or services they sell are usually lower priced, and customers do not usually demand refunds after purchase.

Advantages of Going Cash Only for Payments

Most businesses take cash in addition to other forms of payments. For this article, though, we truly mean cash only. This means no credit or debit cards, cash cards, gift cards, cash transfers (Venmo, Zelle), or personal checks. The business takes paper bills or coins, and that’s it.

We start below by discussing some advantages of going cash only.

Lower Costs & Overhead (No Processing Fees)

Compared with taking credit cards, taking cash saves your business money. In order to process credit cards, you would need to buy or lease the equipment to read the cards. After you get the equipment, you would have to spend time (or money to hire someone) to maintain the equipment.

In addition to needing equipment, each swipe/dip/tap of a payment card costs you money to process. The cost is percentage-based, so it’s difficult to know ahead of time how much each use of a payment card would cost you. As well, some processors charge additional monthly or per incidence fees. These charges can add up and affect your profitability, especially if you operate a small business with narrow margins.

When you take only cash, all of the above issues go away. You won’t need any equipment except a cash register or maybe just an old fashioned calculator. You won’t have to deal with recurring monthly charges for services you may or may not need. Best of all, you won’t have to pay a processing fee every time a customer pays you, so your profit margin stays intact.

No Risk Of Funding Holds

When you take cash, you get your money right away. With payment cards, your account won’t be funded until 24 or maybe up to 72 hours later. Even after that, with card payments, you are at risk for chargebacks. A customer could reach back several months after a purchase to demand their money back so that your sales are not always final until many months after the purchase. Your processor could freeze your account if you have too many chargebacks or even terminate your account altogether. With frozen or terminated accounts, you might not get back the charges in those accounts at all.

With cash, you’ll never have to worry about any of these issues. You get your money right away, and, unless a customer complains and you decide to refund their purchase, you’re never obligated to pay back what you have already taken in.

Simplified Accounting

If you take cash, you can simplify your business’s accounting needs.

There are two ways to keep your books: the cash method and the accrual method. The cash method doesn’t have anything to do with taking incoming payments only in cash. It merely means that you book a sale or expense when you actually receive or pay for the goods or services.

For instance, if you receive an order for widgets on August 31, send the order out, and receive your payment on September 15, then you book the sale on September 15. If you purchase office supplies on August 31 and pay the invoice on September 15, you book the expenditure on September 15. The cash method is considered the simpler of the two accounting methods. It gives you a realistic understanding of how much you have in the bank but does not take into account future income or expenditures.

With the accrual method, you book the sale or expense when you make the sale or incur the expenditure, even if you don’t receive the payment or don’t pay out the money until later. For example, if you receive an order of widgets on August 31, you will book this sale for August 31, even though you give your customer 30 days to pay so that they won’t have to pay until September 30. Likewise, for a purchase you make on August 31, you will book the expenditure on August 31 instead of waiting for when you actually pay, possibly 30 days later. With the accrual method, you must track your business’s finances with accounts receivables and payables.

If you take cash payments only, no matter which accounting method you use, you can simplify your accounting. With the accrual method, your accounts receivables are always up to date because you have already received the money and won’t have to keep track of them after that. If you use the cash method, you won’t have to deal with money you expect to receive in the future because, even though the method doesn’t require you to book the sale until you actually receive the money, you do, in fact, receive the money right away because you are paid in cash at time of sale.

Disadvantages Of Going Cash-Only for Payments

Even though becoming a cash-only business can reduce certain overhead and administrative headaches, they create inconveniences as well.

Lost Customers

Most customers today no longer carry a large amount of cash and prefer instead to pay with a credit or debit card. Going cashless means that these customers won’t be able to make purchases at your business unless they either have the cash on them or can access a nearby ATM. Even assuming these customers heed the cash-only sign at the door and manage to get the cash to complete the purchase on their first visit to your store, they might not come back because they might not want to deal with the inconvenience of paying with cash again.

Few Growth Opportunities

Taking only cash can reduce your business’s growth opportunities. Cash might make sense when your customer must physically be present to get that cup of coffee or get their pet groomed, but if you have the type of business where you can sell online or even take phone orders, then taking only cash could limit your business’s growth opportunities. Many customers today prefer the convenience of shopping online. In addition, online sales can reach customers who live far from your store. Going cash-only means you might be missing these customers who can help your business grow.

Need For Stringent Cash Handling Policies

When it comes to money, some people cheat.

Handling cash means you will have to deal with counterfeits. Despite security features such as colored ink, raised printing, watermarks, and similar, counterfeit currency are still in circulation. In fact, the US Department of Treasury estimates that $70-200 million dollars in counterfeits could be in circulation today. If you take cash only, you and your employees who handle cash payments should be trained on how to spot counterfeits.

Like it or not, while we would like to think that our employees are honest and law-abiding, some do steal, and having a drawer full of cash can fatally tempt these unscrupulous employees. So, if you have a cash-only business, you would have to have strict cash handling policies that are enforced regularly and stringently. You might even have to invest in surveillance equipment to catch those employees who steal.

Limited Automation/More Potential For Errors

Sometimes, cash shortages are caused by inaccurate counting instead of theft. With a cash-only business, the person at the cash register must count carefully, both when taking in cash and counting back cash to give change. While this might not be difficult under normal circumstances, if you operate a business with rush times like lunch periods, having to count cash for every customer could make you more error-prone.

In contrast, if you take payment cards, only the exact amount would be processed, and you would eliminate a source of counting error.

Potential For IRS Audits

Like it or not, the IRS knows that it’s easier for cash-only businesses to underreport earnings and avoid paying taxes. Of course, not every cash-only business tries to avoid paying taxes, but enough have done so that the IRS typically audit cash businesses more often. Even if you report all your cash earnings honestly, you must carefully document all your transactions. Otherwise, it could be difficult to establish a pattern of honesty to convince the IRS that you haven’t underreported.

Other Considerations If You Want To Go Cash Only

So far, this article has focused on how going cash-only may affect the way you take in payments, but there are other considerations to take into account before you jump into a cash-only business.

Inventory & Employee Tim-Tracking Software: Even though you might only need an old fashioned cash register for a cash-only business, you might be missing out on the other conveniences of a modern point of sale system. For instance, some modern point of sale systems include inventory management software that automatically deducts items from your inventory as you make a sale. Other systems allow an employee to punch in and out to track their hours for payroll. If you use an old-fashioned cash register, these software systems would not be available to you.
Not Exempt From Paying Taxes: It is, of course, perfectly legal for you to pay your employees in cash. However, you must still deduct your employees’ income, social security, and Medicare taxes. Failure to do so will subject you to fines by the IRS.
Difficulty Obtaining Bank Loans: If you wish to borrow money to expand your cash-only business, you might have trouble borrowing from a bank. Unless you have excellent accounting records, it would be difficult for you to show a bank that you have adequate cash flow to repay the loan.Â Under those circumstances, they might decline to lend to your business.
Inability To Obtain A Merchant Cash Advance:Â In the same vein as getting a loan, some financial services companies offer something called a merchant cash advance. The advance is paid back by deducting a percentage from future credit card charges. For instance, PayPal has something called PayPal Working Capital and Square has Square Capital. If you do not process credit cards, then you cannot avail yourself of these programs. While getting a merchant cash advance is not the cheapest way to finance a business, it might be crucial to providing cash flow in a pinch.
Newer Tech Allows Coin-Operated Machines To Take Payment Cards: Finally, just because you run a traditionally coin-operated business like a laundromat or vending machines doesn’t mean that you are stuck in a cash-only world. Payment card readers designed for laundromats now exist. The newer vending machines can also take payment cards. In other words, while coin-operated businesses are traditionally cash only, you won’t have to settle for that if you wish to take payment cards as well.

Is A Cash Business Right For You?

Though we are transforming into a cashless society, for certain types of business, going cash-only might still make sense. While there will be inconveniences to you and your customers, an all-cash business is still the fastest and the easiest type of business to set up because it requires zero setup cost. For small businesses that sell items of lower cost to customers who visit in person, accepting only cash might make a lot of sense.

However, even if you prefer to take only cash, you might wish to consider adding payment cards as a convenient option to your customers. You can require that every use of the card be in excess of a certain amount, and, with mobile processors like Square, as long as you have a cell phone, you can quickly set up an account to take credit card sales even if you operate a seasonal, low volume business like a farm stand by the side of the road.

At the end of the day, with the different types of credit card payment processors available today, going cash-only is merely a choice, not a necessity. Is going cash-only a viable option for your business? If you are currently operating a cash-only business, how is your experience so far?

Find An Affordable Credit Card Processor Today

heading	Payment Depot	Fattmerchant	National Processing	Dharma	Square
	Payment Depot	Fattmerchant	National Processing	Dharma Merchant Services	Square Payments

	Get Started Review	Get Started Review	Get Started Review	Get Started Review	Get Started Review
Availability	US-based businesses	US-based businesses	US-based businesses	US-based businesses	US, Canada, UK
Serves in-store, mobile, and eCommerce	â	â	â	â	â
No early termination fee	â	â	â	â	â
Compatible with most POS systems	â	â	â	â
Rate matching / negotiableÂ	â	â	â	â
High-quality sales and customer service	â	â	â	â
Pricing model	Interchange-plus	Interchange-plus	Interchange-plus	Interchange-plus	Flat rate
Monthly fee	$49	$99	$10	$20	$0
Standard retail rates	0% + $0.15 markup	0% + $0.08 markup	0.20% + $0.10 markup	0.15% + $0.07 markup	2.75% total
Good for higher volume (over $20K/month)	â	â	â	â
Good for mid volume ($10K-20K/month)	â	â	â	â
Good for lower volume (under $10K/month)	â		â		â
	Get Started with Payment Depot	Get Started with Fattmerchant Payments	Get Started with National Processing	Get Started with Dharma Merchant Services	Get Started with Square Payments

See more data

Each of the above companies provides excellent customer service and fair pricing.

The post Can You Really Run A Cash-Only Business? appeared first on Merchant Maverick.

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July 16, 2019

What Is Square And How Does It Work?

We at Merchant Maverick like Square. Itâs a great service that opens up the ability to process credit card payments to many small businesses, and weâve written a lot of articles about Square’s point of sale, payment processing, inventory, booking, and invoicing features. These articles can be prohibitively in-depth to the uninitiated, however, so you might want to read this quick overview of Square for a summary before digging into the details.

A Brief History Of Square

Square was founded in 2009 when Jack Dorsey (also of Twitter) tried to help his friend Jim McKelvey take a credit card payment of $2,000.00. Squareâs first product was a magnetic stripe credit card reader that could be inserted into a smartphoneâs headphone jack to take credit card sales.

Square became a public company in November of 2015, and its stock is traded on the New York Stock Exchange under the ticker symbol SQ. While Square does bring in a lot of money ($3.3 billion for the year 2018), it still has not made a profit. For the moment, the company seems to be more focused on growing by adding new services for its customers.

While Square’s main focus continues to be helping small businesses quickly and easily set up taking credit card payments, it has also expanded its services to point of sale, inventory, and employee management — giving small businesses the ability to run more like large ones (more on these services below). To this end, it has bought the food delivery business Caviar, the catering service Zesty, and the website building service Weebly. It also owns a consumer-centric digital wallet called the Cash App, where users can send money to each other and even buy from any store with the money in the app.

In the span of about ten years, Square has grown from a startup focusing on one aspect of helping small businesses grow to a large business providing a suite of services that help small businesses expand. With so many additional services, what exactly does Square do these days?

What Does Square Do?

At its heart, Square is still a credit card processing aggregator (also sometimes called a third party payment processor or a payment service provider (PSP)). We have a great article on the difference between a merchant account provider and an aggregator, but below is a quick explanation.

Square’s Credit Card Processing Services

Traditionally, if you want your business to take credit card sales, you would work with a provider to set up something called a merchant account. To get a merchant account, you typically undergo a long application process and provide a lot of financial information before you are approved. These providers want to make sure that, based on your businessâs existing history, you don’t present a huge financial risk.

Credit card processing aggregators take more of a see-as-we-go approach and assume financial risk for bad accounts. Aggregators merely need to verify the identity of the applicant before authorizing a new account, and generally don’t ask too much more information. They have more freedom on who they sign up and how they do business with those they sign up.

While this means aggregators can quickly set your business up to take credit card payments without needing an established history, they tend to be cautious afterwards. These types of payment processors have advanced systems in place to analyze each transaction for any red flags. Suspicious transactions can cause the processor to hold funds until it has more information. Worse, third-party processors often have a clause in the contract that says they can terminate your account if they see fit. Usually, this happens to businesses that have high numbers of chargebacks or fraudulent transactions.

Square is an aggregator, so essentially the above is its business model. You can sign up for Square within minutes and without providing detailed financial information. In addition, Square gives you a basic set of free hardware and software so you can start taking credit card payments almost right away. The free items include:

Square Point Of Sale Software: Square’s free POS software is incredibly advanced for being free, though it’s certainly not a full-fledged POS. Still, for most small businesses it is more than sufficient. Square also offers premium iPad POS systems for a monthly fee if you need more advanced features.
Credit Card Reader: You can get a basic magnetic strip reader for free, but if you want support for chip cards, you’ll have to upgrade to another reader, which will cost you.
Invoicing: For those businesses that bill a larger amount but less often (e.g. lawn care services), Square offers an electronic invoicing function. The invoices are free to send, but you will pay a transaction fee when your customer pays with their card.

Square’s Value-Added Services

As mentioned earlier, Square has been adding more services to its core credit card processing business. Some of these services are for free, but others are available for a small fee. These services include:

Employee Management: With this service, you can manage your employees from anywhere. You can add new employees to the system, track their hours, track their register/sales (at either single location or multiple locations), edit and close employee timecards, and give selected employees selected access to various parts of this software (e.g. so they can enter their own hours but not see your weekly sales numbers).
Payroll Services: This service imports data from the employee management software so that you can easily pay your employees and contractors. Square will handle tax filings and withholdings, and they can handle the payments to other employee benefits such as health insurance and 401(k). You can even offer direct deposit to your employees.
Inventory Management: Square offers basic inventory management in its Point of Sale app for free, but the premium iPad POS systems offer a more detailed system that can track and analyze your business’s inventory across multiple stores and multiple registers. You are notified when inventory is low, and items are automatically removed from inventory when they’re sold, whether at one of your physical locations or online.
Business Debit Card (Square Card): When you are paid by your customers through Square, the money goes to an account kept by Square. Rather than moving the money to your bank, you can use it immediately with the Square Card. The Square Card is a debit card sponsored by Mastercard, and you can request it from Square for free. Check out How Does Square’s Instant Deposit Work?Â for more information about how to access your funds.
Appointments: Square provides a booking calendar for professional service businesses (like hair salons). The calendar not only tracks and moves appointments, but it can also send appointment reminders to customers. The POS and booking system is free for a single user, but if you have multiple users you’ll need to pay a monthly fee.
Square Online Store: Pretty much every business needs an online presence, and Square can help you build a professional-looking website even if you’ve never done it before. Square provides tools that can help you track your inventory sold through your online store and helps you with shipping (printing labels, discounted rates). Best of all, when you sell out of state, it tracks all the different sales taxes that you might owe. There’s a basic free webstore, but if you need more advanced features, you’ll need to upgrade to one of the other plans.
Other Services: Square offers many more services designed to make a small business owner’s life easier. For instance, Square offers marketing software to help you build email and social media advertising campaigns. It has an installment payment service for certain businesses so that a customer can buy a big-ticket item and pay Square in installments while you get paid right away. Square can help you build a loyalty program where customers can redeem goods or services with points. You can get your own branded gift cards to sell to your customers. Square even provides online store owners with a product photography service so that the items sold through webstores are presented in their best light.

As can be seen above, Square is well on its way to offering an entire suite of software and services that not only help you take credit card sales, but also help you manage your entire business’s operations.

What Are The Advantages of Square?

Every successful business has a few things it does extremely well, and Square is no exception. Square basically provides you with a free, fast, and easy-to-get-out-of way to start taking credit card sales. To elaborate a bit, the following are some advantages for signing up with Square:

Fast Setup: You can sign up for Square within minutes and get a credit card reader shipped to you very quickly.
Easy Termination: If you sign up and find that you don’t like Square, you can stop working with Square any time you want. There are no penalties for leaving, so you can sign up without fear. (There may be loose ends to tie up, but you can still terminate the services at will.)
Easy To Use: Square is focused on small businesses that are just starting out. They provide a simple piece of hardware and intuitive software to help you run your business and help you grow.
Simple Fee Structure: Compared with other pricing models, Square has an easy-to-understand flat fee structure so you can better predict your profits.
Fast Payment: With Square, you can get paid almost right away after a customer makes a charge. You can instantly deposit these funds into your outside account or use the funds directly with the Square Card debit card. In contrast, traditional merchant account providers typically hold the funds for at least 24 hours before releasing it to you. For a small business with tight cash flow, Square’s fast payment can make a difference to the business’s survival.
No Minimums Or Monthly Fees: A small fee here and there might seem insignificant, but they can add up in the long run. Square’s credit card processing service (and a lot of their other services) have no minimum or monthly fees, so a small business doesn’t have to worry about paying for anything other than the transaction processing costs.

These are just some of the advantages for signing up with Square. Of course, no business is perfect, and neither is Square. Under some circumstances and for some types of businesses, Square is not the best option.

What Are The Disadvantages Of Square?

No business can be everything to everyone, so Square is not suitable for every type of business. One of the biggest complaints we see about Square is that Square sometimes withhold funds in a merchant’s account, with or without warning. Sometimes, you never get paid. If you fit into one of the categories below, you might want to think twice before signing up with Square:

Not Suitable For High-Risk Businesses: A “high risk” business is usually defined as a business that deals with guns and ammo, tobacco and vaporizers, pharmaceuticals, gambling and financial services, and similar — anything highly regulated or prone to chargebacks and disputes. If you deal in any of these, Square is likely not the right business partner for you. Specifically, in its Terms of Service, Square reserves the right to terminate service if you violate any export control regulations (for example, sell military-grade items to specific countries) and money laundering laws, sell weapons or devices designed to cause physical harm, or “use the Services except as otherwise allowed” under their agreements.
Not Suitable For Business With Many Chargebacks: If you have a business that causes a high rate of dispute or chargebacks (even if it’s not otherwise a high-risk business), then Square is probably not the right company for you. Going back to Square’s business model, it fronts you the money that you take from your customers so you can collect right away while it waits for the banks to settle the charges. So, if Square can’t eventually get the money from the banks, it might stop fronting you the money (put a hold on your account) or stop working with you altogether.
Not The Best Pricing For High-Volume businesses: Despite its transparent pricing, Square might not be the cheapest service provider for your particular business. If your business is mature, you have an established financial history and are doing a consistently high volume of card payments, and you know how your customers tend to pay for your goods or services, then you might want to shop around a little more to find the merchant account provider that can offer you interchange-plus pricing and volume discounts. (That said, Square does negotiate custom rates for high-volume businesses, but you should absolutely shop around all the same.)

We have an article that gives more details on why Square is not suitable for high risk and high chargeback businesses. If you have an established business and wish to shop around, here’s some information on where you might be able to get a better deal.

What Are Square’s Fees?

Business owners like having predictable operating expenditures every month. Because credit card fees usually have a percentage component and a flat fee component, the cost of allowing credit card sales tend to be less predictable. Compared to traditional credit card processors, however, Squareâs fees are easier to predict.

With Square, you usually only have to worry about just one fee, expressed in a percentage form. Right now, if you use Squareâs free credit card reader and free Point of Sale software, you pay 2.75% of the sale. Thatâs it. If your customers choose to pay online, your rate is 2.9% + $0.30 per transaction.Â Having only to keep two numbers in mind makes it easier for you to figure out your markups so you can make a profit for your entire business.

Note, though, that if you use Squareâs premium hardware or software, the charges can get a little complex. Here’s an article giving a more detailed breakdown of Square’s fees.

How Do You Use Square?

When it comes down to it, it’s fairly easy to start using Square’s services. You can do it in four steps:

Sign Up For A Free Account. This only takes a few minutes, and we even have an article walking you through the process. You wonât have to provide a lot of financial information, and they wonât do a credit check on you at this stage (they will later, after youâre all set up).
Get Your Free Square Reader. Youâll have quite a few hardware choices–some of which you will need to pay for–but thereâs always one thatâs free for either iOS or Android.
Download The Free Square App. The app is called Square Point of Sale, and you will need this app to process payments through a mobile device.
Log In To The Free Square Dashboard And Explore. This is a fairly robust piece of software that manages all your credit card charges. You can customize reporting in a centralized hub, and do much, much more (some of which cost extra). Here’s a Merchant Maverick article on the details of the dashboard.

As mentioned above, Square wants to help you run your business. There are a lot of value-added services they offer, so once you’re all set taking credit card sales, you might wish set aside a little time to explore these additional services to see how they can help you run your business.

What Kinds of Businesses Is Square Best For?

Square isnât right for every business, but if your business is small or new, Square is very likely the best bet for you. With Square, youâll get lots of free software, hardware, and add-ons to get you up and running very quickly. You can use Square on the web, at a brick-and-mortar store, and even at mobile locations such as food festivals.

We’ve compared Square with PayPal and Clover Go and believe Square really does offer the best value for the price for a start-up business. As long as youâre not one of the âhigh riskâ businesses, you should have no problems getting payments from Square or with your account being abruptly suspended or terminated. Best of all, if you use Square and then after a while decide you donât like them, you can stop using them at any time.

Is Square right for you? This more in-depth article can help you decide.

The post What Is Square And How Does It Work? appeared first on Merchant Maverick.

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April 18, 2019

6 Square POS Features To Run Your Small Business Like a Pro

When a merchant signs up for a new Square account to start processing payments, many times the focus isnât on the other features; itâs on getting paid â and rightfully so. But after signing into your account for the first time, it may become evident to you that there is a lot more to Square than just payment processing.

For those of you who are new to Square or if you are shopping around and checking out your options to make a final decision â youâre in the right place. We are going to take a look at what is available in the free Square POS app. We’ve discussed both Square (read our review) and Square POS (read our review) in depth, so check out their respective reviews for a more comprehensive look. Don’t forget, when you sign up with Square Payments, you get access to the POS app, the online selling tools, invoicing, and a whole lot more.Â

But before we dig into all that, letâs quickly review Squareâs payment processing costs for the price savvy among us. Square has very upfront pricing, but keep in mind that your processing costs change with the Square hardware you use. With the free Square POS and your own smartphone or tablet, youâll pay a flat rate of 2.75% per swipe, dip, or tap. Check out How Much Does Square Charge? for a thorough explanation of any other fees you might incur with Square, including software.Â

While itâs true that Squareâs fee for payment processing may seem a bit higher on the face of things, keep a few things in mind: Square doesnât charge any additional monthly account fees, and you can expect the same flat rate for all of the cards you process, even American Express. You can also close your account any time with no cancellation fees whatsoever. However, one of the more notable reasons we like Square here at Merchant Maverick is that merchants get end-to-end, PCI compliant payment security included with every account, without paying a dime for it.

While Square may not be as packed with features as a traditional POS, there are still a wide range of features waiting if you take advantage of them. In addition to features within the app itself, Square’s back-end management tools (centralized in the web Dashboard) are powerful.Â

We have much to cover, so letâs discover the most noteworthy POS features you can start using to manage customer engagement, employees, inventory, and take charge of your business like the pro you are!

Customer Directory

If you have an existing customer list, you can migrate that over via CSV right into the directory and get started. Every time you complete a sale, your customer directory grows to include your customerâs name, purchase history, location, and credit card (save this only with their permission). If your customer enters their email for an e-receipt, that gets added to the directory, too!

The customer directory builds automatically with each sale, but you can also manually add customer information from the Square POS or the Square dashboard. (See Why We Like Squareâs Online Dashboard and Analytics App for a primer on the dashboard.) In the Customer Directory, you can add an email, birthday, make notes about their order history, or add their company, for instance.

As your customers continue to shop with you, Square builds reports on customer behavior patterns, too. You can find out things like visiting frequency and when they purchased something from you last. You can view some reports from the in-app reporting in the Square Point of Sale, but to access all of the reporting features, youâll need to get to the Square dashboard.

A lesser-known Square feature is the private feedback you can gather after a sale. Giving your customers this opportunity to share their opinions with you directly (and right from their receipt) helps keep the lines of communication open. When your customer leaves feedback, you can respond to them directly and offer to comp their item if you wish. In this way, you can hopefully also avoid negative public reviews â and keep your customers happier while youâre at it.

Keeping up with inventory changes and accurately ordering the stock you need is probably one of the most critical business matters there is. Not only does good inventory management build loyalty and trust with your customers, but you can also avoid some unneeded expenses surrounding both excess and deficient stock. The great news is that basic inventory management comes along with your free Square POS software.

Have a large amount of inventory? You can easily import any existing stock with a CSV spreadsheet. You can also add items manually through your dashboard or Square POS. Either way, you can quickly update product names, prices, and quantities as needed. Setting up low stock alerts is easy â set alerts to send when inventory gets to the amount you decide. In the screenshot below, you can see that this shop has 20 prints in stock and the alert will be sent when there are three left.

Have different sizes or other variables of the same item? Square supports setting up different price points and variants, too. Square does not support partial quantities â but donât lose heart! If you sell in partial quantities, you can work around this issue by setting up a Variation, as seen in the screenshot below.

Whether youâre a micro shop or you move hundreds of items a day, you can set Square up for what makes sense for your business. However, if your business has several hundreds of items, youâre likely going to find the inventory navigation a bit unwieldy. Thatâs because you have to scroll to find the item manually; you canât just type the name in a search bar. Square does offer a more robust solution with Square for Retail (See our review), starting at $60/month/register/location.

To keep up with inventory and track customer spending, you can also assign your products to specific categories. Keep in mind that all of the initial work you do to distinguish your inventory through categories, variations, and accurate item descriptions pays you back with richer insights when it comes time to check out your reports. Square creates free basic reports such as Sales Summary, Sales Trends, and Category Sales, to name a few.

Itâs worth it to mention that if you are in a time crunch or you donât have an item already in your inventory, you can still ring it up easily in quick sale mode â simply punch in the amount, and youâre ready to take payment!

Loyalty

The proof is in the pudding â loyalty programs lead to more customer spending. This fact is proven time and again in retail spending statistics, but Square also reports that customers spend over 30% more after joining their loyalty program. Thatâs a nice chunk of change, but making the loyalty program work for your business is the key to profitability.

The Square Loyalty Program is not free â it starts at $45 and the prices scale with the number of loyalty visits. That means that you wonât be paying for what you donât use, but we still suggest checking your reports to track success. However, you really are in charge of the program and its success in your business. Thatâs because everything is highly customizable. From a classic digital punch card to earning points each visit, you control what â and how â your customers earn rewards with you.

According to Square, merchants get the best responses with their loyalty program by offering a meaningful reward, making the reward happen sooner rather than later (about 30 days from enrollment), and limiting the rules when it comes to earning rewards.

When you ask your customer to join your loyalty program, they enter with their phone number, which you can then promote via text messages. The other cool thing about the loyalty program is that the add-on software gives you even more data about your customerâs purchase history and buying behavior. All of this information makes it easier to personalize customer service or even plan your next promotion.

Employee Management

The optional employee management software can make a significant impact on your business if you have multiple locations or many employees. From customizing permissions to timekeeping, performance tracking, and advanced reports, there is a lot of potential here.

With your basic Square account, you can let employees take payments as Mobile Staff and allow or disallow issuing refunds. Beyond these two functions, you are limited unless you opt for Employee Management at $5 / month per employee, however.

For example, employee-specific reporting only comes with advanced Employee Management. In the screenshot below, you can see what types of insights are available under the Employee Sales reports that come along with Employee Management.

In addition to gaining better insights regarding your employeeâs performance, you also have much more control over employee permissions. Choose who has access to cash drawer reports, assign individual access codes, and choose other custom permission settings both at your Point of Sale and in your Dashboard.

Cash Drawer Management

From the Square Point of Sale app, you can enable cash drawer management to promote greater accountability across the board. Take note that you can only manage your cash drawer from an iPad or Android tablet â you canât track and manage with your smartphone. Basic information about your cash drawer session includes:

Cash amount
Cash sales
Cash refunds
Cash paid in and out
Expected cash amount in drawer

Cash Drawer Management lets you know exactly how much cash you start with and what to expect in the drawer at the end of the session. You can set up cash drawer reports to be auto-emailed at the end of the business day. Because the reporting is specific to the device connected to your cash drawer, youâll have to run a separate report for each device. You can view your drawer history at any time from your Square app, too. All you need to do is select the date and the drawer session to see details.

If you have Employee Management software, you can also control employee access to your in-app cash drawer reports. Grant your manager access while restricting other employees from accessing cash reports you may not want to make privy to everyone.

Offline Mode

For days when even the Internet canât seem to work correctly, being able to accept payments offline prevents losing customers and sales. Offline Mode is also a game changer for the many businesses who arenât bound to four walls. Whether you have set up shop in a more remote location or you are a mobile business traveling across the country, you can use your offline mode to swipe your card and securely accept payments. There are a few things to keep in mind when it comes to Offline Mode, however:

Offline Mode only works with a magstripe swipe card, and you must swipe it.
You have to connect to the Internet within 72 hours of the sale, or it expires.
Offline transactions automatically process when you get connected with the Internet again.
If payment doesnât go through after connection, you are responsible for the cost of goods or services.

The good news is that thereâs no additional charge for Offline Mode, just the standard rate of 2.75% per swipe. And there are a few things you can do to protect yourself from the issues listed above. When you take a sale in Offline Mode, be sure to check for the signature on the back of the card and have your customer sign so you can compare signatures. Checking your customerâs ID is also recommended, of course. Youâll also want to double check the cardâs expiration date. If you remember these simple best practices, you can still accept offline payments with a reasonable amount of assurance that your sale is good to go.

Is Square Right For You? Â

Square offers a wide range of features to support a growing small business. If you are adding employees and locations, Square is ready with advanced software that grows with you, including Employee Management and the highly customizable Loyalty Program. (Not to mention the less glamorous but just as important features like cash drawer permissions, inventory management, and offline support.)

Want to find out even more about Square? Check out our Square POS review for more insights on the Square Point of Sale or visit our full Square Review for more helpful insights. If youâre ready to try Square out and see for yourself, head over and set up your free Square account to start processing your first payments!

The post 6 Square POS Features To Run Your Small Business Like a Pro appeared first on Merchant Maverick.

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March 29, 2019

How To Start And Fund A Coffee Shop

Coffee shops are vital places. Not only do they sell brewed happiness, without which I could not function, but they are important for communities as well. A coffee shop is where people meet up, whether to catch up with friends, go on a first date, or conduct a casual business interview. Thanks to the WiFi revolution, coffee houses have also become destinations where remote workers and freelancers can connect from their laptops and students can study for exams.

Coffee shops these days even have significance in the culinary world. Ten or fifteen years ago, you could go to a coffee shop to get a coffee and a muffin. No one had heard of third-wave coffee, latte art, single-origin pour-overs, acai bowls, or even avocado toast, but today, these are probably standard fare at the most happening coffee shop near you.

The high customer demand for an enhanced coffee house experience means lucrative opportunities for local business owners who want to enter the coffee shop business. By opening a coffee shop, you have the potential to create a unique business that could become one of the hottest destinations in your city. But first, you’ll need to do your research on how to establish a successful coffee shop, and perhaps most importantly, figure out how you’ll fund your business venture.

In this post, I describe the main steps for opening aÂ coffee shop. I also outline the best ways to finance a new coffee shop business, with suggestions for recommended lenders in each category.

Preparing To Start A New Coffee Shop Business

If you’ve decided you want to open your own coffee shop (or are at least pretty sure), here’s what you need to do to get started.

1. Decide Whether To Buy A Franchise

Becoming a franchisee isn’t for everyone, but it might be right for you. There are a lot of benefits to purchasing a turnkey business where most of the elements you need to run the business are already in place. You might want to at least consider which coffee shop franchises you could potentially open in your area, and the costs associated with franchise ownership vs. the costs of opening and operating an independent coffee shop.

2. Determine What You’ll Sell

What do you envision your coffee shop’s menu looking like? Do you want to sell only coffee/espresso drinks and pre-made pastries, or have a larger offering that would require a kitchen where food is prepared onsite? Will you serve lunch or just snacks? What about mugs, t-shirts, or other non-food merch? It’s important to have at least a general idea of what you’ll sell early on in the process because this will determine what type of business space you’ll need, as well as your overall vision for your business.

3. Choose A Name & Theme

Next to your menu, the overall vibe and branding of your coffee shop will play a huge part in determining your success. A lot of thought must go into your business’s name and logo, both of which should reflect your theme. If you want to set your business apart from other offerings in your area, it will need to have a unique appeal. In marketing, this is called your business’s “unique value proposition” or “unique selling proposition.” Determining your UVP now will also help you down the road when you’re applying for financing — and also when marketing your business with signage, on social media, etc.

4. Create A Business Plan

Your business plan is essential in guiding the development of your business. In fact, it’s a document that most lenders will require when you apply for financing. Your plan will describe your UVP, and will also have information about how you intend to run your coffee shop. The plan might include specific information about how much financing you need, projected profits, information about ownership and management, relevant market research, competitors in your area, and other details. You should be able to find some sample business plans for coffee shops online to help you get started.

Some more things to consider when creating your coffee shop business plan include:

Business hours
Floor plan, including theÂ layout of outlets for laptops, whether you’ll have community tables, etc.
Decor—Will you go eclectic hodgepodge or streamlined/modern? Keep your theme in mind.
What type of music you’ll play
Whether you’ll appeal to kids with offerings such as board games and kids’ drinks
Community events you might host—For example, open mic night, family board game night, jazz night, etc.

5. Find A Location

An essential component of starting any business is finding a place to set up shop. Maybe there is a vacant business space in town that you’ve already been eyeing, or perhaps you aren’t sure where to look yet. The design of the space itself needs to meet your needs, while the location in relation to other places of interest is just as important. Foot traffic, proximity to competitors, and convenience for university students are all aspects to consider. You should also consider whether you want to have the sort of space where people can feel comfortable working all day, or if you’d rather have minimal seating so people will be on their way shortly after making their purchase. Depending on your budget and theme, you might consider choosing a former coffee shop or restaurant space so that you won’t have to do extensive remodeling.

Funding Your Coffee Shop

Assuming you don’t have personal savings to open your business, you’ll need to get creative in order to secure financing for your brand-new business—traditional lending institutions such as banks and credit unions will usually want to see that you have at least two years in business. However, once you have a solid business plan and prospective location for your coffee shop, it will be easier to find parties who are willing to lend to you. Prospective business owners with good credit and business experience will have the most options, but there are even options for startups with bad credit.

1. Family & Friends

While most of us aren’t blessed enough to have a wealthy aunt willing to fund our wildest dreams, if you do have such an aunt, now is the time to hit her up. You can even hire a lawyer to draw up a contract for a loan between you and your aunt (I’m starting to feel like I know her now—let’s call her Aunt Judy), or use a service like LoanBack that formalizes loan contracts between friends and family.

If you don’t have an Aunt Judy but have personal and/or business contacts that might be willing to invest smaller amounts in your business, you might consider using a platform like Kiva.Â Kiva lets you crowdfund a small business loan up to $10K, provided you meet their terms and have a certain number of friends/family members from your personal network willing to back your loan.

2. Short-Term Business Loan

Most traditional business loans, which are repaid in installments over a number of years, require you to have at least a couple of years in business. An alternative business lending option available to newer businesses (and sometimes even startups) is a short-term loan. These loans can potentially carry high interest rates and you could be required to repay your loan in a matter of months, or sometimes even weeks. However, STLs can be a viable lending option for businesses that don’t have much time in business or business revenue, and many such lenders don’t even require you to have good credit.

Recommended Option: Lendio

	Review Visit Site

Time in business: 6 months Business revenue: $10,000 per month Personal credit score: 550 Borrower requirements (click to expand) Hide

Lendio is an online loan marketplace where you can apply for and compare multiple business loans at once — including short-term loans — potentially up to $500,000. Lendio offers terms as long as 1â3 years, which is a more comfortable repayment frequency compared to many of the predatory short-term lenders you’ll find online. If you don’t have much business experience and aren’t sure what business loans you might qualify for, Lendio is a good place to start. When you can compare multiple loan offers as you can with Lendio, it is much easier to choose the best loan you qualify for.

Lendio Borrower Requirements:

Lendio’s borrower requirements vary depending on which of their lender partners you’re applying with, but the majority of loans in Lendio’s marketplace have these minimum requirements:

Time In Business: 6 months
Credit Score: 550
Business Revenue: $10K/month

3. Personal Loan

A personal loan can be used to fund a business startup such as a coffee shop, as long as the terms of the lender allow you to do so. Personal loans typically have an upper borrowing limit of $30Kâ$50K and carry higher interest rates than a business loan. You also usually need to have good personal credit. You do not need to have good business credit or any particular business credentials.

Recommended Option: LendingPoint

	Review Visit Site

Time in business: N/A Business revenue: N/A Personal credit score: 600 – 680 Personal income: $20,000 LendingPoint does not operate inÂ Colorado, Connecticut, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, New York, North Dakota, Rhode Island, South Carolina, Vermont, West Virginia, Wisconsin, and Wyoming Borrower requirements (click to expand) Hide

LendingPoint is a reputable online lender offering personal loans that can be used for business. These loans are quick and easy to apply for, and you can qualify even if you have aÂ fair personal credit score in the 600s. These are smaller loans—the upper borrowing limit is $25K—but they are accessible to almost anyone with decent credit. You will have between 2â4 years to repay, which is pretty good for an online loan.

LendingPoint Borrower Qualifications:

Time In Business: N/A
Credit Score: 600
Business Revenue: N/A
Personal Income: At least $20K/year

4. Short-Term Line Of Credit

Like short-term loans, short-term lines of credit are also open to young businesses that are just getting started. With this type of business financing, you only have to repay what you borrow, similar to a credit card. The downsides are that you’ll have to pay back the principal pretty expediently, with potentially high interest rates and other fees. Nevertheless, a line of credit can be an important source of working capital or expansion funds for a new business. It’s also a smart choice if you don’t know exactly how much money you’ll need.

Recommended Option: Fundbox

	Review Visit Site

No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months. Business revenue: $50,000 per year No specific personal credit score requirement Borrower requirements (click to expand) Hide

Fundbox is a short-term LOC you might want to consider once you’ve opened up shop and have at least a couple months of coffee-brewing under your belt.

Fundbox offers one of the quickest and easiest business lines of credit with Fundbox Direct Draw. The main requirement for this revolving line of credit is to have been using Fundbox-compatible accounting software for at least two months. Fundbox will use your software account information to evaluate the health of your business, but there are no time-in-business requirements or specific credit score requirements. They will want to see that you’re on course to make at least $50K/year, however. You can borrow up to $100K (depending on how much they approve you for) and will have 12â24 weeks to repay the principal.

Fundbox Direct Draw Borrower Qualifications:Â

Time In Business: N/A
Credit Score: N/A
Business Revenue: $50K/year
Other: Use of compatible accounting software for 2+ months

5. Startup Loan

A startup loan is a loan specifically for startup businesses with 6 or fewer months in operation. Often, these loans do not have any time-in-business requirements. Similar to a personal loan, a startup lender will want to look at your personal track record as far as credit history, and may possibly even delve into your job history and education level. It is pretty difficult to get this type of loan from a bank, but there are several online lenders that cater to startups.

Recommended Option: Upstart

	Review Visit Site

Time in business: N/A Personal credit score: Minimum 620 Business revenue: N/A Borrower requirements (click to expand) Hide

Upstart is an online lender aimed at younger borrowers, though applicants of any age can apply. Upstart helps fund startup businesses, as well as personal expenses and debt refinancing. Through Upstart, you can borrow up to $50K to finance your coffee business, with up to 5 years to pay back the loan. The main criterion Upstart cares about is your personal credit score, but having a strong job history and/or a college degree will also help you secure a loan with a good interest rate.

Upstart Borrower Qualifications:

Time In Business: N/A
Credit Score: 620
Business Revenue: N/A

6. Vendor Financing

Some popular coffee shop POS systems offer vendor financing. That is, a POS vendor may offer users of their point of sale system or payment processing service a business loan. These financing products usually have a low barrier to entry and are suitable for coffee shops that have recently opened. Typically, the main requirement is that you are an active user of the vendor’s product.

Recommended Option: Shopify Capital

	Review Visit Site

Shopify monitors your account and extends a financing offer if your business is eligible. To qualify, you must: Be located in the United States Have Shopify Payments enabled Have a profile that is considered low-risk Process a certain amount of gross merchandise volume (GMV) Borrower requirements (click to expand) Hide

If you use Shopify Payments at your coffee shop, you may be eligible to get a short-term loan or merchant cash advance through Shopify Capital. You cannot apply for this loan; rather, Shopify will let you know if you are eligible. You can borrow a maximum of $500K, and Shopify will deduct a portion of your sales each day until the cash advance is fully remitted (paid off). With a STL from Shopify Capital, you have up to a year to pay it off. We like Shopify POS system a lot, but if you use another POS system, you will not be eligible for Shopify financing.

If you use Square as your coffee shop POS, Square Capital is a similar financing product you may be eligible for. Or, if you let customers pay with PayPal, PayPal Working Capital is an option.

Shopify Capital Borrower Requirements:

Time In Business: N/A
Credit Score: N/A
Business Revenue: N/A
Other: Have a US-based Shopify Payments account, with a low-risk profile, and process a certain amount per month

7. ROBS

Rollovers As Business Startups (ROBS) is a strategy to leverage your retirement account to start a new business. Because this method is technically a rollover, you won’t be penalized for removing funds from your 401(k), IRA, or another retirement account prematurely. Also, since you’re not borrowing money, there is nothing to pay back and no borrowing fees. The downside is that if your business fails, you could lose your investment, and potentially your chance to retire comfortably if you don’t have any other savings. A ROBS is a somewhat complicated transaction, but a ROBS provider will help you set up the new account to fund your business in exchange for a setup fee and a monthly service fee.

Recommended Option: Benetrends

	Review Visit Site

Varies based on the type of financing you seek. Must have a personal credit score of 660 or above. Borrower requirements (click to expand) Hide

Benetrends’ financing options include ROBS as well as loans. Benetrends’ popular ROBS “Rainmaker” plan has financed more than 15,000 small business owners to date and is one of the top ROBS plans out there. Benetrends has clear, fair terms and excellent customer service. This ROBS provider charges a one-time $4,995 setup fee, and an ongoing monthly service fee of $130/month.

Benetrends Rainmaker Borrower Qualifications:

The only borrower requirement is that you have an eligible retirement account with at least $50,000. Eligible accounts include:

401(k)
403(b)
Traditional IRA
Thrift Savings Plan (TSP)
Simplified Employee Pension (SEP)
Keogh

Ineligible plans include Roth IRAs, 457 Plans for non-governmental agencies,Â and distribution of death benefits from an IRA other than to the spouse.

8. Purchase Financing

Similar to purchase order financing, purchase financing is an alternative lending product that allows you to repay your vendors for business purchases in installments. The purchase financing company pays your invoices upfront, and then you repay the financing company in installments. Purchase financing lets newer businesses, such as a coffee shop startup, acquire the materials and equipment needed to open up shop, without having to pay for their supplies all at once. You can think of purchase financing as somewhere between a line of credit and a credit card.

Recommended Option: Behalf

	Review Compare

No specific time in business, revenue, or credit score requirements. Borrower requirements (click to expand) Hide

Behalf is a purchase financing company that offers financing for business purchases, at interest rates of 1%â3% per month. Behalf pays your merchants, and then you repay Behalf in weekly or monthly installments over a period as long as 6 months. This service has a very simple application, with transparent terms and no hidden fees. You can borrow up to $50K, depending on how much you are approved for.

You can use Behalf to fund purchases for most inventory or services, such as coffee beans or business consultant fees, but you cannot use the service for things like paying off existing debt or covering payroll.

Behalf Borrower Requirements

Time In Business: N/A
Credit Score: N/A
Business Revenue: N/A

Note that even though there is no stated credit score minimum, Behalf does do a hard pull on your credit during the application score, and will evaluate your business finances as well.

9. Credit Card

A business or personal credit card has its limitations, as your credit limit probably won’t be high enough to pay for all your startup costs. However, a credit card is a lot easier to get than a business loan, and if you play your cards right (ha ha) you might not have to pay any financing fees at all. Credit cards offer more cash-back and other rewards than ever before, particularly for business cards, and many cards also offer a 0% introductory APR for the first year. Moreover, opening a business credit card will help your new businesses establish and build your business credit profile.

Recommended Option: Chase Ink Unlimited

Chase Ink Business Unlimited CompareÂ	Annual Fee: $0 Purchase APR: 15.49% – 21.49%, Variable
Required credit: Good, excellent Bonus offer: $500 cash back if you spend at least $3,000 on purchases in the first 3 months Purchase intro APR: 0% for the first 12 months Balance transfer intro APR: 0% for the first 12 months Foreign transaction fee: 3% Rewards:Â Unlimited 1.5% cash back rewards on all purchases Notable perks & benefits: Employee cards at no additional cost Travel and purchase coverage More card details (click to expand) Hide

There’s a lot to like about Chase’s newest business card, Ink Business Unlimitedâ . This card offersÂ unlimited 1.5% cash-backÂ on allÂ purchases, combined with no annual fee, a $500 credit if you spend $3K in the first 3 months, and a 12-month 0% introductory APR. This card also carries other useful benefits such as purchase protection against damage and theft, and additional employee cards at no extra cost.

Ink Business Unlimitedâ Eligibility

To be eligible for this card, you need to have good to excellent credit.

If your credit score isn’t your strong suit, no worries. Check out this list of Business Credit Cards For People With Bad Credit.

Opening Your Cafe

Now that you have your business vision, location, and funding in place, it’s time to get ready to open to the public. If you take all of these steps, you should have everything you need to run a successful business, including aÂ demand for your product.

1. Assemble Your Professional Team

Starting a business usually requires you to hire professionals such as accountants, attorneys, architects, and business consultants. At the very least, you will want to have an accountant you trust, as this person can also act as your business consultant in many ways. Professional fees can be high, but can save you a lot of money and headaches down the road.

2. Begin Remodeling

Unless you are building from scratch, you will most likely need to do at least some remodeling to your coffee shop business space to make it fit your needs and vision. At the very least, you’ll need to add signage and repaint. Be thoughtful when choosing the decor, from floor to ceiling. If you need to do extensive remodeling, an SBA 504 Commercial Construction loan might help you finance the renovations. Of course, if you are renting, there will likely be limitations on what changes you can make to your business space.

3. Acquire Equipment & Materials

Before you can start brewing, baking, and all that, you’ll need the proper equipment and raw ingredients. This will require careful consideration, particularly when choosing vendors for coffee beans and other food and drink materials. Make sure you do your research and do plenty of taste tests, because the worst thing a coffee shop can have is yucky-tasting coffee. When selecting vendors for your coffee beans and other raw ingredients, be sure to consider things that your customers might care about, such as whether the coffee comes from sustainable farms or is organic.

In terms of coffee shop equipment, you may have the option to lease or buy. Equipment financing is one way a lot of restauranteurs acquire kitchen equipment, and one you might consider also. Proceeds from SBA 504 loans can also be used to purchase kitchen equipment.

4. Create A Buzz With Marketing

There are so many innovative ways to start creating a buzz around town before your coffee shop even opens. Some of these include:

Giving out samples of your coffee at local events
Updating your building’s exterior with signage and other eye-catching improvements
Setting up a direct mail campaign in targeted regions
Alerting the media to your grand opening
Social media marketing (more on that in a minute)

Essentially, you want people to be excited about your coffee shop before it even opens. Fortunately, social media and the internet makes this easier than ever.

5. Bolster Your Web Presence

Your business website and social media profiles need to be in place before your coffee shop opens. If you don’t have the time or budget to hire a web designer, you can still create a functional and attractive website using a website builder such as Squarespace or Wix. Posting to Instagram and other social sites before the grand opening will also help you create a buzz and establish an online presence.

Here are a couple of resources that will help you build your online presence for your coffee shop:

Guide to creating/maintaining a web presence
Guide to social media marketing

6. Hire & Train Employees

Your employees and the level of customer service they provide will ultimately make or break your coffee shop. You will need to be smart and careful in your hiring process, and train the employees thoroughly so they know not only your processesÂ but also the atmosphere you are trying to create. It’s important to value your employees and offer competitive wages and perks, even if that means cutting costs somewhere else; if you pay minimum wage, employees will ultimately be grumpy with one foot out the door. By establishing a positive corporate culture and showing employees you value them, you will create an awesome team that will take your business to the next level.

7. Choose A POS System

Your point of sale is where you make all your money, so it’s super important that you choose a good one! You do not want a system that is unreliable or only pairs with a crappy merchant service provider that charges exorbitant swipe fees. Thus, you will need to test out multiple systems and read reviews before selecting a system. You’ll also need to figure out which features you need and which you can live without. Many modern cloud-based POS systems are essentially complete business management software programs, with built-in inventory management, employee management, accounting integration, loyalty software, and even more functions. You also have the choice to go all out with POS hardware add-ons such as digital menu boards and self-order kiosks, or keep it simple with a single iPad register.

More important than having a POS with all the bells and whistles, it is essential that the POS system you select integrates with a high-quality merchant services provider (or choice of merchant service providers). Your merchant service provider will determine what percentage of your credit card sales you’ll hand over, how issues such as chargebacks are handled, and how much you’ll pay to exit the contract if you’re not happy with the level of service.

To start your POS research, I recommend reading our article on the best POS systems for coffee shops.

Final Thoughts

There are so many things to consider when starting any business, particularly a business in the restaurant industry. However, as long as you have a solid business plan and financing in place, the rest is really just details. Opening a coffee shop is a practical choice for a lot of prospective business owners, as there will always be demand for good coffee and a place to drink it. Not only that, but it’s also a choice that will allow you to express your individuality and become a vibrant part of the local community in a way that many business types aren’t suited for.

If all this sounds good to you, I encourage you to get started so you can open the go-to coffee shop in your city before someone else does.

Oh, and don’t forget the free WiFi!

The post How To Start And Fund A Coffee Shop appeared first on Merchant Maverick.

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February 22, 2019

6 Free Square Tools To Make Running Your Small Business Easier

If you own a business, you donât need anyone to tell you about the value of time-saving tools. Personally, whenever I uncover something that unexpectedly makes business run more efficiently, it can almost feel like winning the lottery â time is that important to me. If you juggle a lot of responsibilities during your day, you probably feel the same way. Thatâs why I was pretty stoked to pull back the curtain and see whatâs really behind the scenes when it comes to Square — one of the most popular payment processing apps available.Â

In this post, we’ll discuss some of the tools you may not have heard about that are available with any standard Square account. While I also get pretty excited about some of the premium options on offer (like Squareâs email marketing and CRM tools), we are going to stick with the freebies in this post. Keep reading to learn about tools you can start using today that may help you do business a little smarter.

Note: Keep in mind, we’re not touching onÂ all of the free software and tools you get with Square — just some of the most valuable ones. Check out our in-depth Square review for a closer look at everything Square has to offer.

Inventory Management

When we talk about what is waiting when you open up a free Square account, one of the most important tools is your inventory management. Good inventory management is so important to keep your customers happy and ultimately help support your bottom line. Understanding what is most popular and identifying your best sellers can help you not only maintain the right amount of stock but support your promotional efforts as well.

So letâs start with the basics. After you enter in an item in your Square dashboard or the POS app, you can add the current stock amount, enable tracking, and set up a low stock alert right from the same screen. Whether you ring up the item from your POS, virtual terminal, or send an invoice, Square adjusts your stock automatically.

You can add item variants as well. Add different price points for sizes, add-ons, or customize however you like. Just name the variant, set the price, and add a unique SKU if needed. And if you sell in bulk, you can use Square’s variable price point feature to leave the price open based on the weight/quantity sold.Â

Need a customizable option like a topping change, a special dietary adjustment, or another type of swap-out? You can create modifiers for that, too! Unlike item variations, modifiers donât decrease inventory accounts. You can opt to assign a price to your modifier, however.

When it comes to managing your physical stock, it is worth mentioning that the free POS account isnât set up to print barcodes for your SKUs. Some business owners use a Dymo label printer as a workaround. If you have a lot of inventory and need a more robust solution for advanced inventory management (including barcode scanning and printing) in one solution, Square for Retail may be worth your while. Check out our full Square for Retail review for pricing and a better look at all the extra inventory-related features included with the POS.Â

Customer Directory

When you use Square’s customer directory, the amount of data you have access to automatically builds with each sale. With just a swipe of the card, your list collects data such as your customers’ names, when they visited which location, and their visit frequency. During the sale, your customer may also have entered in their email address with you to get a digital receipt. Of course, if you are feeling bold, you can also ask your customers one-by-one for their email addresses so you can start building a healthy list.

Square’s customer database is accessible through Square Point of Sale or through the Square Dashboard. Under each customer in your directory, you can add a note, upload a file, view any feedback they have left you on their receipts, or create an invoice to send directly (more on that below).

When all of these customer insights build over time, you can start to get a clearer picture of who your loyal customers are, who has visited more than once, and who hasnât visited you in a while. You can also see what their favorite products are — all of which is useful data for your business in general, and especially for marketing purposes.Â

Again, the Square Customer Directory is entirely free to use, and it syncs with all of Square’s other tools — that includes paid software options such as loyalty and email marketing. The Square email marketing tool lets you segment customers,Â then customize email campaigns based on their habits. Square has pay-as-you-go pricing at 10 cents an email, or you can opt for a monthly subscription to send unlimited emails. Square offers a 30-day free trial for an email marketing subscription, and pricing starts at $15/month for up to 500 customers.

Card On File

You can make it easier for your repeat customers to order by phone or for a future invoice by saving your customer’s credit card information using Square’s Card on File feature. Be aware that your customers have to âsign offâ so you can appropriately save their card on file, however. If you are completing a sale on your computer through Squareâs Virtual Terminal, you will be prompted to print out the approval release and have your customer sign it. Keep this document in a safe place, because it proves you received their permission to store their card and can protect you from chargeback issues.

If you are at your free Square POS app, your customer can approve saving the card on file by entering in their zip code at the permission screen. After that, you can process their payments quickly and easily with no need to present the card. While it costs nothing to store a card on file or use the feature regularly, keep in mind that you will pay a little more with each transaction (3.5% + $0.15 per transaction instead of 2.75% per swipe/dip/tap) because they process as card-not-present, rather than card-present.Â Â

Is Card On File Secure?

Square lets you store your customerâs credit card information with their approval, and yes, itâs fully compliant with the payment security standards set up by the PCI-DSS. Thatâs because when you enter credit card data, it is only going through the secure Square app. Also take note that when you enter in credit card data â whether during a sale or saving a card on file, the full number isnât viewable to your or your staff once itâs entered in the system.

Securely saving customer card data is vital to your financial protection as a business and prevents very costly fraudulent risks. For more about Squareâs security, check out our related post, Is Square A Secure Way To Accept Credit Card Payments?

Gift Cards

Gift cards may not be the first thing you think of when it comes to business tools, but here are some pretty neat statistics for you: In a 2018 press release, First Data shares a study that found that consumers, on average, spend $59 over the original value of the gift card they receive. Not only that, but shoppers plan to spend 55% of their annual gifting budget on gift cards. That is no small potato when it comes to amping up your revenue.

If Iâve piqued your interest, I have some more good news. Square’s digital gift cards are completely free for you to sell. If you want to offer physical gift cards, you could start with a stock of 20 for $40 or opt for higher quantities with a significantly lower cost with each tier. When your customer pays for the gift card using a credit or debit card, standard processing fees will apply. (There’s no charge for payments made with cash.) When it comes time for the gift recipient to spend with you, you wonât face any additional costs. Square treats this transaction like cash, and they only deduct the amount of the sale from the card. And it’s great that you don’t need to pay any monthly fees to accept gift cards — you just pay the cost of the physical cards (if you want them) and any associated payment processing when purchased.Â

Invoicing & Installments

When it comes to invoicing clients, Square makes it pretty easy. First, you can send an unlimited amount of professional-looking invoices for free. And instead of your customer having to call you with their number or waiting for a paper check, they follow the prompts and pay securely online. You can also send files, images, contracts, or attach information along with the invoice.

If you sell larger ticket items and want to finance your customers, you may also be interested in Square Installments. With this service, you can let your customer pay over time, while getting all of the funds upfront from Square. Thatâs because Square takes the risk by checking their credit and approving or denying the purchase. To find out more about letting your customers pay by installments, check out How Does Customer Financing With Square Installments Work?

If you want to assume more of the risk or set up a layaway program, however, you can also send out a regular invoice to request a down payment or partial payment as well. There is simply a lot of flexibility afforded with invoicing and installments. Read our Square Invoices Review to find out more about this tool and how to use it for your business.

Virtual Terminal

Don’t have a card reader handy? Does a customer want to pay over the phone? You can accept payments securely at your own computer when you log into Square dashboard and go to your Virtual Terminal. There are many scenarios when taking payments at your virtual terminal can empower your business model — and it makes for a great backup if other devices are misbehaving.Â

In any case, you can still take payments quickly via Square’s Virtual Terminal. You can manually enter in the credit card information, or you can pull up a customer in your directory and charge a card you have saved on file. If you have a Mac or Chromebook, you can still connect a basic magstripe reader and swipe the card at your computer, too!Â

Square charges no software fees to use the virtual terminal and it’s included with all free Square accounts, but you will still have to pay transaction costs. With keyed entry, you’ll pay 3.5% + $0.15 per transaction, or 2.75% for swipe transactions.

Square Card

At first glance, the Square Card may seem like just another line of credit, but it isnât. The Square Card is a debit card that gives you instant access to any of the funds that are in your Square account in real time. So why are so many business owners stoked about the Square Card? For one, it can help manage and organize cash flow. One way to separate business expenses from everything else is to keep all of your business expenses on your Square Card. It makes sense because youâll also always have an itemized list of exactly what you spent at the Square app under âCard Spend.â

Keep in mind that once you get the ball rolling with your Square Card, your funds are automatically going to sit in your Square balance unless you manually transfer funds into a different account. You can do so at any time and Square will deposit funds in the next 1-2 business days. If you want your funds deposited into your main bank account faster, you can also opt for a same-day instant deposit for the fee of 1% of the total amount.

When it comes time to spend your balance, the Square Card is a debit card accepted at any merchant that takes MasterCard. As far as cost, the Square Card is completely free with no annual or usage fees whatsoever. The other cool bonus is that you get a 2.75% discount at all other Square merchant locations. If you have a Square account, you can request your free Square Card under Deposits at the Square Dashboard. Note that Square doesnât automatically send you a card when you open your account.

Is Square Right For You?

There is no doubt that Square offers an abundance of tools and add-on software apps that can help you run your business more efficiently. Utilizing inventory management tools can help you stay on top of the ebb and flow of demand, and payment processing options offer flexibility when you need it.

We’ve only scratched the surface when it comes to Squareâs tools because there are many layers to Square’s solutions. Check out our Square Review to get even more details about features and pricing so you can make the decision thatâs right for you. You can also set up a free Square account and play around in the dashboard and check out the tools yourself.

The post 6 Free Square Tools To Make Running Your Small Business Easier appeared first on Merchant Maverick.

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February 19, 2019

The Best Mobile Credit Card Readers For iPhone and iPad

If you’re in the market for a mobile card reader and a credit card processing app, there’s no shortage of options. The trick is finding the right option for a given business. One of the big factors that determine which apps are suitable is what kind of smartphone or tablet you have. Fortunately, if you have an iOS device — that is, an iPhone or an iPad — you have plenty of options.

Our Top Picks For iOS-Based Credit Card Readers & Mobile Apps

The first decision when choosing a card reader and mobile processing app is selecting the device itself. For the most part, iOS-compatible mobile apps and readers support iPhones and iPads alike with no major issues. But after you’ve narrowed down the list of apps based on supported devices, you’ve still got several other factors to consider — transaction costs, monthly fees, essential features, whether you want a standalone mobile app or something that supports invoicing and online payments… and that’s just to get the list started! The cost of the card reader and accepted payment methods are just as important as app features when you’re dealing with mobile processing.

So without further ado, here’s a list of our favorite card swipers and mobile apps for iPhones and iPads, as well as why we like them.

App Name	Square	Shopify Lite	Payment Depot Mobile	Fattmerchant Mobile

	Review Visit Site	Review Visit Site	Review Visit Site	Review Visit Site
In-Person Transaction Fees	2.75%	2.7%	2.6% + $0.10	Interchange + $0.15
Monthly Fee	$0	$9	$10	$99
Monthly Minimum	$0	$0	$0	$0
Type of Processor	Third-Party	Third-Party	Merchant Account	Merchant Account
Account Stability	Good	Good	Excellent	Excellent
Card Readers	Free magstripe reader (Contactless + Chip Reader $49)	Free Chip & Swipe Reader (retail price $29)	Free Swift B200 reader (chip and swipe)	BBPOS Chipper BT (chip and swipe, $75; swipe, chip and contactless, $100)

Payment Depot (Swipe Simple)

Payment Depot (read our review) offers a subscription-based pricing model for its merchant accounts, with a host of software options for businesses to choose from (including Clover). Standard pricing plans for Payment Depot start at $49/month, with transactions processing at interchange + $0.15.Â However, if you’re looking for a mobile solution that runs on an iPad or iPhone, Payment Depot offers the Swipe Simple app, and Merchant Maverick readers can get access to special pricing that’s competitive even for low-volume merchants.

With this exclusive plan, you’ll get the Swipe Simple app and payment processing at 2.6% + $0.10 per transaction, with only a $10 monthly account fee. Remember, this is a Merchant Maverick exclusive, so you’ll need to use our link in order to get the special pricing.

Swipe Simple is a very functional credit card processing app. It runs on iPhone and iPad devices, as well as Android hardware. It even comes with a demo mode so you can test out the app before you sign up, which is always nice to see. There’s limited inventory management, but you can track stock counts. There’s even an offline mode. Check out our Payment Depot Mobile/Swipe Simple review for a closer look at the software.

In addition to the app, Payment Depot offers a choice of two readers. The Swift B200, a Bluetooth-enabled reader that supports magstripe and chip card transactions, is available to merchants for free. If you’d like to add contactless payments, you can get the Swift B250 for just $25, which is a fantastic price for an all-in-one card reader.

Shopify Lite

Shopify (read our review) is mostly known for its ecommerce platform, but it has also developed a quite powerful POS app that integrates with its online shopping tools. Shopify POS is included for free in all standard Shopify ecommerce plans, but if you don’t plan to sell online or only need some very basic online sales tools, there’s another option: Shopify Lite (read our review), which lets you create “buy” buttons and run a Facebook store for online sales, as well as giving access to the Shopify POS.

Shopify Lite will run you $9/month and 2.7% per transaction, which is a reasonable cost. The POS app runs on both Android and iOS, but an iPad offers the best user experience and access to the most features. However, keep in mind that the Lite plan is still limited even with an iPad; specifically, there’s no support for a cash drawer, barcode scanner, or receipt printer. That feature is only accessible with the Shopify Basic plan, which costs $29/month and includes a full web store with unlimited products.

Shopify also offers a free Chip & Swipe Reader for its merchants. It retails for $29 normally, which is still a great price for a Bluetooth-enabled chip card reader. We’ve reviewed the Shopify Chip & Swipe reader already, and you can check that out for a closer look.

Square

Square’s mobile point-of-sale app, simply called Square Point of Sale, gets aÂ lotÂ of love, and rightfully so. The appÂ is free to use and you only pay a per-transaction fee of 2.75%. Square’s pricing makes it very attractive for low-volume and startup businesses, and there is an assortment of hardware options available. The Square Point of Sale app supports both iOS and Android devices, but certain features are not universally supported. An iPad gives you access to the vast majority of these features, but the iPhone supports all of the core features and many of the secondary, non-universal features. Check out our in-depth Square POS review for a comprehensive look at the free POS app and its features. For a closer look at the rest of Square’s products, check out our complete Square review.

As far as hardware goes, let’s start with the basics. Square has been offering a free basic magstripe reader for a long time, and it still does. (Note: you can also get the Square reader in some retail stores for $10.) However, the removal of the 3.5mm headphone jack from newer iPhone models has complicated matters somewhat. Square responded by rolling out a Lightning port magstripe reader. When you sign up for your free Square account, you can choose which model of reader you need. Square no longer offers multiple free readers; after the first one, you’ll pay $10 per reader.

However, it’s important to also consider accepting EMV chip cards, especially if you’re doing a consistent volume of business or large transactions. Square’s Contactless + Chip Reader supports both EMV and contactless NFC payments. It includes a separate magstripe reader for swipe transactions.

The Contactless + Chip Reader sells for $49, but Square does offer financing for hardware purchases that cost at least $49 (convenient, isn’t it?). You can also purchase cash drawers, receipt printers, and even tablet stands directly from Square.

Want to know more about Square’s hardware? Check out A Guide to Square Credit Card Readers & POS Bundles for an in-depth look at your options.

Fattmerchant Mobile

Fattmerchant Mobile isn’t an option that I talk about a lot, mostly because it’s best targeted at high-volume businesses. However, until recently, it was an iOS-exclusive, and even now, the iOS platform is more robust than its Android counterpart. Fattmerchant (read our review) offers customers their own merchant accounts, which translates to a high degree of account stability. Its Omni platform, which includes the mobile processing app, invoicing, and a customer database and inventory management, combines many core features in a single platform. Check out our Fattmerchant Mobile review for a more comprehensive look at the app and its features.

Fattmerchant operates on a subscription pricing model, with a monthly fee that starts at $99/month. Mobile and invoice transactions cost interchange fees + $0.15 per transactions — there’s no percentage markup at all. However, if you opt for the mobile credit card carder, you’ll get the card-present rate of interchange fees + $0.08 per transaction. You can simply key in all the transactions if you prefer — just know that you’ll pay higher interchange fees in addition to the $0.15 markup.

Fattmerchant offers a choice of two different card readers, the BBPOS Chipper BT and the BBPOS Chipper X2 BT. The Chipper BT model supports both magstripe and chip card transactions and connects to your device via Bluetooth. It goes for $75. The Chipper X2 adds contactless payment support to the magstripe and chip card readersÂ and also connects via Bluetooth. It goes for $100.

Honorable Mentions

While I have no qualms with saying the four options I’ve presented are the best of the best, there are a couple of other mobile apps and card readers that are good options for iPhone and iPad users. So let’s talk about them!

PayPal Here

PayPal Here integrates with the rest of PayPal’s services so that you can sell online and in person seamlessly, much like Square. While it doesn’t offer quite as many features as Square, it’s still a very functional mobile app. Check out our PayPal Here review for a closer look at all the features.

PayPal Here processes payments at 2.7% per transaction, with keyed entry at 3.5% + $0.15. PayPal no longer offers a free card reader. Instead, you’ll need to shell out $15 to get its magstripe reader. PayPal will also place limits on your account if you opt for the magstripe reader, making it viable mostly for very low-volume businesses. As an alternative, PayPal offers two Bluetooth enabled cardreaders, starting with the Chip and Swipe reader, for $24.99.

If you also want contactless support, PayPal’s Chip and Tap Reader (retail price $59.99; bundle with stand $79.99). However, there’s another option for iPad users who want a more robust software option: Vend (read our review) with a PayPal integration. You’ll get PayPal’s 2.7% rate for payment processing with no monthly fee from PayPal. Of course, you’ll have to choose your Vend plan as well — and get the appropriate hardware. You’ll need the PayPal Chip Card Reader, which goes for $99.

PayPal + Vend POS

Advanced POS software Easy credit card processing integration
Get Started For $0

SumUp

SumUp (read our review) isn’t quite as complex or feature-laden as some of the other options on this list, but if you just need an iPad or iPhone credit card reader and app, SumUp will get the job done. Payments process at 2.65%, and there’s no monthly fee to use the software. For a better idea of how SumUp stacks up against the competition, I suggest checking out our Square vs SumUp comparison.

SumUp’s cardreader, at $69, is definitely a little expensive, but it’s a beautifully designed piece of hardware. It’s Bluetooth enabled and supports magstripe, chip card, and contactless payments. You can also occasionally catch it on sale for a reduced price. I suggest checking out our SumUp unboxing review for a closer look at the reader.

Which iPhone/iPad Credit Card Swiper Is Right For You?

In payment processing, especially mobile processing, it’s impossible to take a one-size-fits-all approach, so it’s really important that you, the business owner, spend some time figuring out what features you need in a credit card processing app. You should also consider what kind of pricing model works best for your business, and do the math to see what you’d really pay with each option on your short list. And of course, there’s the card swiper, too. While a free magstripe reader might be enticing, you should really consider upgrading to a chip card-capable reader to protect your business.

App Name	Square	Shopify Lite	Payment Depot Mobile	Fattmerchant Mobile

	Review Visit Site	Review Visit Site	Review Visit Site	Review Visit Site
In-Person Transaction Fees	2.75%	2.7%	2.6% + $0.10	Interchange + $0.15
Monthly Fee	$0	$9	$10	$99
Monthly Minimum	$0	$0	$0	$0
Type of Processor	Third-Party	Third-Party	Merchant Account	Merchant Account
Account Stability	Good	Good	Excellent	Excellent
Card Readers	Free magstripe reader (Contactless + Chip Reader $49)	Free Chip & Swipe Reader (retail price $29)	Free Swift B200 reader (chip and swipe)	BBPOS Chipper BT (chip and swipe, $75; swipe, chip and contactless, $100)

The takeaway is that there is no shortage of great credit card processing apps for iPhone and iPad users! And you’ll get a great assortment of credit card readers to go with. Don’t forget to check out our companion article, The Best Credit Card Reader Apps to Android.

Thanks for reading! What’s your favorite credit card processing app and mobile card reader for iOS devices?

The post The Best Mobile Credit Card Readers For iPhone and iPad appeared first on Merchant Maverick.

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