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
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. 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?
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? 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. 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.
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.
Inventory Management
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.
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 a 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 the 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. 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
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Time in business: 6 months
Business revenue: $10,000 per month
Personal credit score: 550
Borrower requirements (click to expand)
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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
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Time in business: N/A
Business revenue: N/A
Personal credit score: 600 – 680
Personal income: $20,000
LendingPoint does not operate in 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)
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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 a 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
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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)
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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
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Time in business: N/A
Personal credit score: Minimum 620
Business revenue: N/A
Borrower requirements (click to expand)
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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
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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)
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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
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Varies based on the type of financing you seek.
Must have a personal credit score of 660 or above.
Borrower requirements (click to expand)
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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, 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
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No specific time in business, revenue, or credit score requirements.
Borrower requirements (click to expand)
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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
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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)
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There’s a lot to like about Chase’s newest business card, Ink Business Unlimitedâ . This card offers unlimited 1.5% cash-back on all 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 a 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 processes 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.
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 on 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, 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
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.
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.
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. 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 a lot of love, and rightfully so. The app 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 readers 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.
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.
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.
Are you curious about what makes Stripe different than other third-party processors like Square and PayPal? And if the costs are comparable? Come along as we explore Stripe — a lesser-known payment processing option that has definite potential when it comes to eCommerce.
Even though Stripe has less name recognition than competitors Square and PayPal, Stripe has likely processed many of your recent online shopping transactions without you even realizing it. Thatâs because Stripe powers payment processing behind the scenes for some of the biggest retail chains around — places like Target, Lyft, Facebook, Adidas, and Under Armour. Yes, Stripe has one of the most respected and well-trusted platforms in the world, but instead of providing branded, customer-facing tools like its peers, it focuses on delivering developer-friendly solutions with extensive code libraries and lots of customization options.
If you are looking for a ready-made, polished solution for eCommerce payment processing, Stripe may not be the ideal choice. A solution like Square may be much better suited to your needs. If, however, you want to build your payment processing platform from the ground up (and have the technical resources to do so), youâll find a range of robust, world-class developer tools.
In this post, we’ll talk about what kind of payment processing Stripe provides (and why it matters), and then dive into costs associated with transactions and/or other handy tools you may need.
Overview Of Stripe
Stripe is a third-party payment processor â just like PayPal and Square. Traditional merchant account providers vet and approve each individual merchant, creating a single account for that business. Third-party processors, on the other hand, make it much easier for a business to quickly access payment processing services because they combine many business accounts together into one giant account. Stripe’s processing model relies on maintaining account volume to reduce risk for the group as a whole; for that reason, it can become a bit of a numbers game for them to remain profitable. If something looks fishy, they are more likely to terminate, freeze, or put an account hold on a business without a lot of warning.
Now, most of us feel a bit squirmy when we imagine our hard-earned revenue potentially held ransom in a purgatory account, but the truth is, freezes and holds happen only to a tiny percentage of businesses â and typically only after certain red flags have been raised. If you want to learn more about how to avoid waving some of these red flags, check out our post: How to Avoid Merchant Account Holds, Freezes, and Terminations. The majority of business owners will not have to worry about a freeze or hold, so itâs important to keep that whole issue in perspective.
Now back to the good news. Stripe has a lot of features and benefits for a growing small business, such as:
Transparent pricing
No monthly or termination fee
Payment security using advanced machine learning Â
Libraries in every language
Display multiple currencies (add 1% for automatic conversion)
Versioned API changes
Test-friendly environment
24/7 live chat and phone support
iOS and Android dashboard apps
And when it comes to creating the finished solution, you donât have to do it all. There is a workaround for those of us who may not have all of the coding skills (or time!) to build it all from the ground up. Stripe has established platform partners to integrate a range of small business tools from accounting, automation, form building, CRM, inventory management, and booking â just to scratch the surface.
One thing we like about Stripe is that, unlike some companies, Stripe offers support for safe and PCI compliant migration of credit card data whether you are coming or going. Some third-party processors donât support exit migration at all, so this is a nice touch.
Now that you are a bit more familiar with this platform, letâs check out the costs associated with processing payments.
Stripe Payment Processing Costs
Most savvy business owners want to cut to the chase. âGreat, so how much does it cost?â
Stripeâs payment processing costs are straightforward, but your per-transaction costs will largely depend on the type of transaction you’re processing. Discounts and some pricing differences apply, so stick with me as we go through some different scenarios.
Online Transactions
For any eCommerce transaction (including in-app and mobile web payments), you are going to pay 2.9% + $0.30per successful card charge. It doesn’t matter whether you process Visa, MasterCard, American Express, JCB, etc. â all cards cost the same to process. You also pay the same price whether you build your own site or connect to a third-party shopping cart.
Another great thing about Stripe is that you can accept international cards (for an additional 1%). If you need to convert the currency, however, youâll have to pay another 1% on top of that. This is great for businesses that sell internationally, especially combined with Stripe’s ability to present prices in the customer’s local currency.Â
Stripe also allows merchants to accept more than just credit cards, providing the tools that allow you to manage ACH and other payment options. Here is what itâs going to cost you:
ACH Credit: Starting at $1.00 per ACH credit payment
ACH Direct Debit: 0.8% per transaction, capped at $5
Wire: $8.00 per wire payment
Stripe also allows you to verify your customersâ bank accounts at no extra charge. Thatâs a nice touch. However, if payment doesnât go through, you are looking at $4 for failed ACH direct deposit payments and $15 for disputed ACH direct debit payments.
In-Person Transactions
Want the same customization for your pop-up shop or brick-and-mortar store that Stripe brings to your online presence? Introducing the Stripe Terminal!
For in-person payment processing with the Square terminal, youâll pay 2.7% + $0.05 for each successful card transaction. But before you get too excited, Stripe Terminalâs programmable point of sale is currently in beta and available upon invitation only. You can request approval now, and if you are approved, you can buy a developer kit to run in test mode until they begin supporting transactions in live mode (this is expected to roll out very soon).
When it comes time to choose your reader, you can integrate with the Stripe Terminal through a combination of an iOS SDK and mobile reader or a JavaScript SDK and countertop reader. Stripe suggests the latter if youâre looking for a fully branded experience and have a strong developer proficiency.
Payment Security Note: As far as payment security and PCI-DSS compliance go, the Stripe Terminal is EMV Levels 1,2, and 3 pre-certified. So it can help a wide range of businesses get started without having to dedicate extra resources to payment security. But for now, youâll have to wait to process live payments until it graduates from beta testing.
Does Stripe Offer Alternative Pricing?
We do get a lot of comments about the fact that Stripe (and other third-party processors) can be expensive for some businesses. Fortunately, Stripe does offer volume-based discounts for large businesses. In addition, you may be able to qualify for custom pricing if you run a nonprofit or have a unique business model. Stripe doesnât give any hard and fast details about alternative pricing, however, so youâll have to contact the sales team and discuss your business model with them directly.
Does your business process very small transactions ($10 or less) on a regular basis? The $0.30 per-transaction fee might be prohibitively expensive, and an alternate payment model catering to these microtransactions can save you money. Hereâs what Stripe says about support for microtransaction payment processing:
Microtransaction support varies from market to market. If you process more than $100,000 per month or have a unique business model such as marketplaces, microtransactions, or unusually large order values, reach out to us, and we can discuss availability and options. In markets where microtransactions arenât available, a common approach is to batch together multiple transactions from the same customer and submit them as a single, larger charge.
Stripe Pricing For Other Tools
Stipe offers a healthy selection of additional tools and add-ons. Below, we break them down for you and include information about pricing to help you make an informed decision.
Billing
Stripe Billing offers recurring payments and subscription tools built around the customer experience. For the recurring business model, you will have a lot of tools to help you engage customers and reduce turnover (more on that below). And as far as billing your customers with one-off invoices or setting them up for automatic recurring payments, there are no limits on how many invoices you can send, ever.
To be clear, all Stripe Billing fees are charged in addition to the processing fee (2.9% + $0.30 per successful charge).
If you’re only expecting to process a small volume of recurring payments, or you’re new to Stripe, the Starter Plan has everything you need. Your cost for using the Billing tools is 0% for the first $1 million of recurring charges, and then 0.4% after that. Stripe doesn’t charge anything extra for one-off invoices.Â
For businesses that are billing at large volumes and want advanced features to manage billing from order cash, Stripe offers the Scale plan. You will pay 0.7% on recurring charges, in addition to the payment fees of 2.9% + 30 cents per successful charge to a card. However, Stripe also offers discounted ACH to businesses on the Scale plan, so there are potential cost savings.
Here is a screenshot from Stripe’s comparison of their Starter and Scale packages:
The above is a long list of out-of-the-box tools you can put to use pretty quickly. Even just the business analytics, reporting, recovery tools, and webhooks make a compelling case of high value to cost ratio. Stripe touts that its recovery tools have âreduced payment declines for users by 45% on average and increased revenue by 10% on average.â
All-in-all, any SaaS or subscription-based business could benefit from the features in Stripe Billing â and Stripe offers a free trial with no setup or fixed monthly fees, so there doesnât seem to be a downside to trying it out.
Connect
Connect is âthe payments platform for platforms.â If you are a marketplace or a platform, you can utilize Stripe Connect to accept money and pay third parties. Connect is API-first, meaning you have the freedom to design a unique experience including onboarding, set payout timing, and integrated financial reporting, to name a few.
Connect has three account options including Standard, Express, and Custom. The cost for Connect Standard is included with Stripe â you have no additional platform-specific fees to add payments to your platform. Additionally, youâll get a full Stripe Dashboard, dynamic risk-based KYC/AML checks, international support in over 25 countries, and hosted onboarding and verification.
Custom and Express Connect costs $2 per active account per month + 0.25% of account volume. With these accounts you can do things like build branded onboarding flows, control payout timing and funds flow, automate 1099 tax form generation and delivery, and have a platform management dashboard. The difference between Express and Custom is revealed in the names themselves. Express is a faster option requiring low integration effort to onboard recipients quickly and at scale (e.g., an on-demand marketplace), while Custom is an option for platforms to completely customize the user experience.
International connected accounts will run an extra 0.25% cross-border charge on monthly account volume. Additional fees also apply if you utilize Connect tools such as account debits (1.5%) and payouts ($0.25 per payout). However, as with Stripeâs other pricing models, the company is always up for discussing volume pricing for large platforms and alternative pricing options for low volume accounts. And if youâre a startup affiliated with Stripe Atlas Network, you can contact Stripe to learn about their custom startup package.
Sigma
Sigma connects you to your business data with a wide range of applications from business operations to finance, data analysis, and product management. Sigma doesnât require any setup or ETLs; all you need to do is write SQL queries to create the custom reports on your dashboard. Pricing for Sigma is based on how many charges, authorizations, and application fees your business processed in the previous month. Fees start at $0.02/charge for 1-500 charges and incrementally decrease with charge volume. Â
Radar For Teams
While all of Stripeâs payment processing software is fully PCI compliant and therefore meets global payment security standards, Radar is available as well. Radar bolsters your defenses through advanced machine learning. Radar learns from âhundreds of billions of data points across the Stripe network to help millions of businesses fight fraud.â
Radar is included with your standard and custom pricing plans. However, Radar for Fraud Teams is also available for an additional cost of $0.02/per transaction. Radar utilizes data and tools that support the detection and blocking of fraud, and it can decrease the false positives that block legitimate customers, too. Stripe has done a very good job at creating layers of security and data insights into their product â and you donât need to dig into the code to make use of it because it all happens at your dashboard!
Is Stripe A Good Fit For You?
Itâs pretty clear that Stripe goes far beyond your run-of-the-mill payment processing solution. The real meat of Stripe is its rich developer tools that give you the power to customize everything about the payment experience while giving you deep insights and analytical data you can use right away.
Businesses that want a fully branded, ready-to-scale solution — as well as subscription-based businesses, marketplaces, and tech-focused companies — will likely find all the tools they need and then some. However, for the eCommerce business that simply needs a reliable and secure payment processor, Stripe may be overkill. If you donât have the technical expertise or donât have developers on staff, you may never tap into Stripeâs potential. An option like Square may be a better fit. Square offers fast setup, no recurring fees, and up-front pricing that suits most small businesses nicely. Additionally, Square provides an extensive dashboard that reveals basic business and financial analytics with no integration required.
Not sure what you need? Check out our Stripe vs Square comparison or read our Stripe Review for an in-depth analysis. Or if you want to explore your options even further, check out How to Choose an eCommerce Merchant Account.
The post The Complete Guide To Stripe Pricing And Costs appeared first on Merchant Maverick.
Thinking about using Square to process payments for your business? Whether you are a solopreneur or a busy boss running multiple locations, you can quickly set up an account with Square with little to no fuss. Square offers several time-saving benefits for the small business owner looking to start processing payments, including no credit checks, a free magstripe reader to get you started, and a free Square POS app which enables you to start taking credit card payments right away. Not only that, but the Square dashboard offers analytics reporting, inventory management, alerts, and (with optional add-on software) even the ability to plan email marketing campaigns!
With all of these conveniences and freebies, you can expect slightly higher transaction fees than you’d get with a traditional merchant account. However, as a third-party processor, Square offers a very transparent pricing plan that starts at 2.75% per swipe dip or tap, and 3.5% + 15 cents for keyed-in transactions. You wonât be surprised with hidden fees or contracts, and you can enjoy the same processing rate for all major credit cards. Square also offers payment dispute assistance, chargeback protection, and secure, PCI compliant software â all included.
If your interest in Square is piqued, but you need a little more information before getting started, then you’ve landed on the right post! Below, we’ll take you step-by-step through the process of signing up for a new Square account. As you will see, setting up your Square account is relatively straightforward. And the best part? Itâs completely free and requires no commitment on your part whatsoever.
What Do You Need To Get Started?
Before we get started, here is the main information youâll need to set up your Square account:
Email address
Last four digits of your Social Security number (to confirm your name)
Home address
Shipping address
Legal name
Phone number
Bank account number to set up your direct deposit schedule
You don’t need:
Bank statements
Proof of revenue
Your full social security number
Tax documents
A credit check
We are going to get pretty detailed in this tutorial, but rest assured, the application itself takes less than ten minutes. Follow along with the guide below to discover how to set up and make the most of your new Square account!
How To Create A Free Square Account
First, visit Squareâs sign-up page and hit the âSign Up With Squareâ button.
The first step asks for your email address and prompts you to create a password and choose your country. You also must agree to Squareâs terms, privacy policy and e-sign consent policy. We strongly suggest that as with any contract, you take the time to click on, read, and understand the details before agreeing to them.
The next screen is straightforward and asks if you are an individual or represent a larger business, charity, or religious organization. Enter in your business name or another title that you would like to appear on your receipts. I’m typing in “Blue Heron Content” as my business name.
Now we are getting closer to the meat â Square wants to know where you plan on processing payments. In this example, I donât want to limit myself, so I am choosing all of the possibilities!
It’s important to mention that even if you don’t plan to use some of these options right away, you can still access them later at any time.
Next, Square asks what else they can help you manage. I am also going to select all of the options again to get a better idea of what Square may suggest right off the bat. I donât personally need employee tracking for my business, but letâs see what it can do!
Now it’s time to make decisions. Because I selected that I was interested in restaurant-related products, I am offered a free 30-day trial of Square for Restaurants, one of Square’s premium iPad POS apps. (Check out our full review of Square for Restaurants for a more detailed look at pricing and features.) If you are a restaurant owner, check out some of the perks Square lists below. For this particular tutorial, though, we are going to stick with the free POS system.
Now that I have selected Square Point of Sale as my preferred POS app, I’ve made it to the âLetâs talk about youâ page. This is the place to plug in the rest of your information. Note that Square is not going to perform a credit check on you or your business, they just need the last four digits of your social security number or ITIN, your legal name, street address, and phone number. They use this information to verify your identity.
I’ve finished filling in this form, so I am going to hit “continue” and see whatâs next on our journey.
Choose A Magstripe Reader
Great news! By the time you arrive at the next screen below (3-5 seconds, give or take), Square will have successfully verified your identity. Now it’s time to select a credit card reader to accept in-person payments. For my part, while the Contactless + Chip Reader looks very enticing at $49, I am going to accept the free reader for now.
Now there’s another choice to make. Square would like to know if I would like the 3.5mm magstripe reader that is compatible with the traditional headphone jack, or the Lightning connector version for iOS devices. Iâm choosing the reader that plugs into a conventional audio jack. You’ll obviously choose the option that works best for your business setup.
Compatibility Note: Square’s magstripe and chip card readers and the Square Point of Sale (POS app) are compatible with most Apple iOS and Android devices running the latest software updates. After this tutorial, check out our Square POS Review for more about system requirements, integrations, and a lot more details about Square POS.
After selecting the type of magstripe reader that fits your needs, Square will give you the options to find a retailer close to you and pick up the reader or have it mailed. Personally, I’m opting for Square to send me the reader in the mail. After entering my shipping details, I am one step closer to getting my own Square reader. Oh, and shipping is free, too! Just note that it could take up to 10 days for yours to arrive.Â
After entering my information and clicking continue, the setup process is officially complete! That was very easy. Square has already sent me an email letting me know when to expect my reader and another to confirm my email address.
It’s time to head to the new dashboard to set up the backend.Â
How To Set Up Your Square Dashboard
Right away, you can see that the dashboard has a clean layout and is pretty straightforward. Since this is the first time I am visiting this new dashboard, Square is offering up these green bubbles as a setup guide. Letâs explore the dashboard and start setting up inventory, customizing the layout, and checking out the reporting features.
Compatibility Note: Youâll be able to access the full Square dashboard from any web browser, but the Square Dashboard app is only compatible with iPhones at this time. You can still take payments on any compatible iOS and Android device with the Square POS app, however.
Add Items & Build Your Inventory
From your home screen, you will see the teal Items button (pictured in the screenshot above). The place to add inventory is under Items>Item Library. To the right on the screenshot below, note the blue button that says âCreate an Itemâ:
Here is what the “Create an Item” screen looks like in the Square Dashboard before adding a product:
I went ahead and uploaded a product image and filled out my first item below. I can add the amount of stock I have, a price, and set up low-stock alerts for myself here, too! Square will even let me color-code items if I prefer to group categories by colors.Â
It’s also possible to create variant items if you sell the same product in different colors and/or sizes. Plus, for cafes and restaurants, there’s a “modifier” option. Say, for example, that you want to offer coconut, soy, and almond milk alternatives for customers in your coffee shop. You can do that, and even set an upcharge fee for these items using the modifier feature. There’s also an option to specify at which locations an item is available if you have more than one shop.Â
Create & Manage Locations
You can create multiple locations from within your Square Dashboard by going to “Accounts and Settings” and then to “Business” and selecting “Locations.” Square will even let you specify a mix of physical locations with a set address and mobile locations without one.
Square’s location management features can help you manage inventory and gather data from multiple stores â and it is totally free:
Linked locations and deposit options
Per-location item libraries
Device management for security
Reporting tools to compare/contrast sales or other data
Square also offers advanced tracking and reporting tools for individual employees across your locations. More on those features and cost in the Employee Management section.
Manage Sales Tax Settings
You will find Square’s sales tax settings nestled under the Items menu in your dashboard.
When you create a tax at your Square Dashboard, the tax will automatically sync to every device in your account, and you can specify which taxes apply to which locations. You can even build the tax into the price of the item if you prefer, rather than adding the tax to the price afterward. Square also lets you modify tax settings from within the mobile POS app as well, which is useful when you need to make changes on the fly.
In addition to multiple tax rates, you can create conditional tax rules, which are preset conditions in which a tax won’t be applied â whether you need that to apply to one item or the entire order. This is especially helpful for restaurants that handle online orders.
Now, let’s head back to the home screen and customize our dashboard layout, and then check out the reporting features!
Customize Your Dashboard Layout
Customizing the layout of your Square Dashboard is super easy. First, you can get rid of anything you know you wonât need right off the bat by scrolling through and unchecking anything in the drop-down menu (pictured on the right-hand side of the screenshot below). Donât worry about making the wrong decision, because you can reset the whole thing or click to re-check one box.
The other way to easily adjust your view is by dragging and dropping the tiles to configure them exactly how you want them. For my store, I switched tiles to move the feedback tile up from the last row. This drag-and-drop feature makes it easy to get the information you prioritize first, and then scroll to other options whenever needed.
As you can see, it’s simple to move things around, and if you change your mind, just as easy to change it back.
Review Square’s Reporting Features
The extensive, user-friendly and (mostly) free reporting features are what make Square a fantastic, no-fuss choice for any small business. As you can see in the screenshot below, there is a long list of possible reports. Every business has unique needs, and Square does a good job of supporting a wide range of small businesses with various options and features.
All of the sales reports, such as Sales Summary, Sales Trends, Items Sales, and Modifier Sales, are free. Custom Reports is another handy and entirely free reporting tool that can help you combine and compare your reporting data. Custom Reports allows you to aggregate reports with multiple filtering options. This feature makes it easy work to create a report that breaks the data down for a single location, or you can pick and choose certain pieces of data and compare them across different locations. For instance, you could create one report that compares Gross Sales and Returns for a particular device and/or location.Â
To find out even more about what Squareâs dashboard can offer you in terms of reporting features, check out our post Why We Like Squareâs Online Dashboard and Analytics App.
If you are looking for even more robust reporting and tracking across multiple locations for your employees, it may be worth it to you to learn more about the Employee Management tools, featured below.
Manage Your EmployeesÂ
Within the Dashboard, you’ll find the Employee section, which is the foundation for Square’s Employee Management feature set. Adding a new employee into your dashboard is easy â and adding in separate email logins for Square POS is entirely free. However, if you want advanced reporting on timekeeping, individual employee sales, and sales vs. labor costs, you need to subscribe to Employee Management, which will cost you $5 per employee.Â
Here, I have chosen to select the free “Mobile Staff” option to show you that you can invite employees using the email address that they will then use to log into the Square app. You can also enable or disable permissions for accepting payments in Offline Mode and set or remove Issue Refunds permissions.
It’s important to note that employees assigned to mobile staff can only access their own sales data in the Square POS app.Â
If you want something a bit more substantial in terms of employee reporting, Square offers that, too. To track individual employee sales through the day, keep better performance accountability across multiple locations, and closely monitor administrative permissions, the $5/mo per employee cost for the advanced Employee Management feature seems like a pretty fair deal. You also get timekeeping, so your employees can clock into their shifts through the Square POS app.Â
If you want to get started with Employee Management, there are a few ways to do it: Head to Employee Sales or Labor vs. Sales under Reports and start adding employees. It’s free to try for 30 days!
How To Set Up Square Deposits & Funding
When itâs time to get all of that revenue into your bank account, Square has several options for getting your money, all found under Deposits.
Square will automatically deposit your funds on the next business day. You can also change your âclose of dayâ to adjust for your time zone or business hours if you would like. The close of day determines when Square cuts off payment deposits for the next business day. If you need your money even faster, Square offers Instant Deposits that transfer your current Sales Balance immediately â whether itâs a business day or a weekend. This faster service will cost you 1% of the transfer amount. You can even use Scheduled Deposits to get your money deposited at each day’s close of business.Â
Find out all the details about the instant deposit feature, and more about how Square’s deposit options work in general, by checking out our post, How Does Squareâs Instant Deposit Work?
To set up your deposit schedule or choose an instant transfer, youâll need to link your debit card (in addition to your bank account). However, you have yet another option for disbursement. You can request your very own Square Card, a personalized business debit card that holds your Square balance.
You can use your card anywhere MasterCard is accepted. If youâd like to order one, youâll find “Square Card” tucked right under the Deposits tab. To be clear, you can request a Square Card and also choose to have funds deposited into your bank account.
Explore More Square Software Options
Square offers a myriad of specialized software options to make business more productive. Here are some of your options:
Customer Engagement: Square’s customer engagement tools include a customer database, feedback management, and CRM software. The database and feedback tools are free, but the CRM starts at $15 month. The image above is a sample CRM campaign I could send to my lapsed customer list. Email campaigns are easy to customize and segment for those reachable-by-email customers.
Loyalty Program:Â This tool starts at $25/month. Read our Square Loyalty Program Review for an in-depth analysis.
Advanced Employee Management:Â As outlined in a previous section, pay $5/month per employee for advanced reporting and employee management tools.
Payroll: Square Employee and Contractor payroll starts at $29/month plus $5/employee. Contractor-Only Payroll is just $5/month per contractor.
eCommerce: Square offers free space and setup for an online store, and you can integrate with major shopping carts. Read our Square Online Store and eCommerce Review.
Invoicing:Â Invoices are always free to send, pay 2.9% + 30 cents per invoice when your customer pays with credit or debit online. For more on the pros and cons, pricing, and an in-depth look at invoicing with Square, check out our Square Invoices Review.
Choose Another Square Point of Sale App
While the free Square POS app will likely fit the bill for many small businesses, Square has developed more specialized tools for retail, restaurants, and appointment-based businesses.
Square For Retail:
This POS system works with an iPad and has a redesigned interface and usability geared for retail businesses that have substantial inventory. Instead of scrolling to an item in your inventory, an item is easily searchable by name. The barcode scanning and printing features make keeping up with inventory a bit easier, too. Check out our Square Retail Review for more on price, pros and cons, and all a lot more details.
Square for Restaurants:
If you are familiar with Square’s POS system, you may be surprised to see how different Square for Restaurants really is. And it has to be. Sit-down restaurants usually require more specialized tools to cover their everyday business needs, and this POS delivers â from table mapping, menu creation, table management, and reporting tools â there are a lot of specialized features here. Check out our full Square for Restaurants review to find out if this is the right choice for your restaurant.
Square Appointments:
If your business relies on creating and maintaining appointments for just yourself or an entire team, Square Appointments might be just what you need. Note that this POS option is an iOS exclusive. It’s free for individual users, and pricing starts at $50 a month beyond that. Check out our in-depth Square Appointments Review, including functionality, customization, and features.
Choose Hardware Options
Square has expanded to offer so much more than the free magstripe credit card reader. As I mentioned earlier, Square offers a Contactless + Chip reader that lets you accept chip card and contactless payments for $49, which is a smart move to improve payment security. Â
If you need something more robust in terms of hardware, however, you can probably find what you need. Square offers countertop POS systems with customer-friendly displays, and if you want to toe the line between countertop vs. mobile, Square also offers a fully portable credit card terminal with a built-in receipt printer.
Squareâs countertop POS devices include:
Square Stand: This hardware option is a tablet stand with a built-in card reader (along with contactless and chip reader) with an affordable price tag, minimal cords, and a swivel stand.
Square Terminal: A more portable option, Square Terminal accepts magstripe, chip card, and contactless transactions. Itâs sleek design, built-in receipt printer, and generous display size make it a nice, versatile option.
Square Register: Need something more robust? The Square Register offers a 13.25-inch display to run your Square Point of Sale, and on the opposite side, you have a 7-inch customer display ready for magstripe, chip card, and contactless transactions.
For an in-depth look at each of the POS options or to take a gander at all the Square POS kits and bundles, head over to A Guide To Square Credit Card Readers And POS Bundles.
Where To Go Next With Square?
When you consider that Square is a secure, PCI compliant option with a transparent pricing plan and offers lots of bells and whistles, it truly is an excellent solution for any small business. I like that itâs so easy to set up an account with Square, and that they don’t ask for much in terms of personal information. When it is time to get set up or find reports, the dashboard is intuitive and easy to navigate. I also love that Square offers affordable hardware and software when it comes time to scale the business.
Not quite ready to make a decision? Check out our Square Review or head over to Square and set up your own account to see for yourself.
Already have an account? Square support provides great resources to help answer your questions as you navigate your options.
Have questions, comments? Leave us your thoughts below! (Just make sure you check our comment guidelines, first!)
The post How To Set Up A Free Square Account appeared first on Merchant Maverick.
Have you ever looked around your local bar and thought, âI could run a place like thisâ? For many, itâs easy to get caught up in the excitement of potentially opening a bar, but for a select few, this is more than just a fleeting idea. These aspiring entrepreneurs want to make this dream a reality.
Opening your own bar or sports pub seems like a fun and exciting experience. After all, who doesnât love gathering with friends and family to watch the big game with a cold drink in hand and appetizing snacks on the table? Behind-the-scenes, though, itâs a little different. While it may seem exciting to become a small business owner and call the shots, thereâs also a lot of planning and work involved in starting a profitable business.
If opening a little corner pub sounds like a dream come true but you donât know quite where to begin, youâre in the right place. In this article, weâll share our top tips for starting the exhilarating and lucrative path to owning your own bar. Weâll go over what you need to legally open a bar, expenses to start and maintain your business, and the importance of a business plan. Weâll also help you decode one of the biggest pieces of the small business puzzle: getting financing for your new business.
If youâre ready to stop dreaming and start doing, keep reading!
Begin With Branding
One of the first things you need to do before you take off running is to visualize a name, a theme, and an overarching concept for your bar. Do you picture yourself running a neighborhood pub where all of the locals gather? Or maybe youâd rather open a thriving nightclub where young club hoppers from around your city come to dance the night away?
Evaluate your different options, considering the type of patrons youâd like to attract as well as where you plan to open your bar. For example, if you want a younger crowd, a nightclub in a trendy part of town makes sense. If you want to attract an older, more sophisticated crowd, consider opening a wine bar, martini bar, or cigar bar in a thriving downtown area. You could also target sports fans by opening a sports bar or draw in foodies with a new gastropub.
Speaking of your barâs name, it goes without saying that youâll need one. Because itâs your bar, youâre free to name it anything you want. However, you want to make sure that you choose a name that reflects your concept. âJohnâs Neighborhood Barâ may incorporate your name, but it doesnât stand out. When brainstorming ideas, think about the audience you want to bring in and pick a moniker thatâs attention-grabbing — a name that lets customers know what to expect when walking through the doors of your bar.
Find A Location
One of the most important first steps in opening your own bar is choosing a location. There are a few options you have at this stage of the game:
Purchase an existing bar
Start from scratch
Buy a franchise
There are advantages and disadvantages for each option. If you purchase an existing bar, you inherit the existing clientele and may see immediate income. However, you could pay a steep premium if the bar is extremely successful at the time of sale. You may also rack up high costs if the bar doesnât mesh with your vision and you have to pay for renovations.
If you start from scratch, youâll be able to see your vision through from start to finish. However, it may take many months (or even a year or longer) to open your doors, and the costs can really rack up if you have to completely renovate a space or build a new bar from the ground up. With this option, careful planning, budgeting, and at least some knowledge of the bar and restaurant industry are needed for the highest chance of success.
Finally, you could purchase a franchise. This option could shield you from some of the mistakes you’d almost certainly encounter if you attempted to go it alone. However, you wonât be able to fully showcase your creativity with a franchise.
Finding a location takes planning and a dedicated eye on financials. Sure, putting your bar in a trendy and popular neighborhood could help your business become your cityâs next hotspot, but real estate costs may be prohibitively high. Before you put down money on a location, make sure to do your market research and understand the costs.
Create A Business Plan
Every successful business starts with a solid business plan, and a bar is no exception. Not only will your business plan act as a blueprint for starting, operating, and growing your business, but itâs also a necessity if you plan to apply for business loans from a bank or other lender.
No two business plans are exactly alike, but there are some standard sections you should have in yours. This includes:
Executive Summary: Basic information about your business and why it will be a success
Company Details: Specific details about your business
Organizational Chart: Outline of your company structure
Marketing Strategy:Â How will you market your business?
Financial Projections: Show the financial outlook of your business
Your business plan should showcase the goals of your company and serve as a map for you to follow, keeping your business on the right path. Lenders will want to see a business plan that demonstrates thought, intelligence, research, and reasonable plans for success in the future.
Register Your Business
Before you open your bar and begin serving customers, you have to register your business. First things first: register the business’s name with your state. This can be completed via the county clerk’s office in the state where youâll operate.
Next, youâll need to determine your formal legal structure. Do you plan to be a limited liability company or a corporation? Your business structure will determine how much you pay in taxes, what paperwork needs to be filed with the government, and your personal liability. If youâre unsure of which structure is right for your new business, consult with an attorney, accountant, or business counselor.
Your business will also need to be registered with the state revenue office and the Internal Revenue Service. Because your business will have employees, youâll be required to apply for an Employer Identification Number. Youâll also need a sales tax permit.
Finally, youâll be required to obtain the proper licenses and permits to legally operate your business. Because your bar will serve alcohol, a liquor license is required. If your bar serves food, youâll need a license from the health department. You can find out more about the requirements in your area by contacting your state Department of Commerce.
Obtain A Liquor License
In the previous section, we touched on acquiring the right permits and licenses. One of the most important things you need to open a bar — if not the most important thing — is a liquor license. This license makes it legal for you to sell alcohol in your business. This should be a top priority, as getting approval from your stateâs Alcohol Beverage Control agency typically takes at least one month. In some cases, it may take up to six months to get approved.
The steps required to obtain your liquor license vary by state. In all states, though, you will be required to fill out an application. You may be required to submit additional documentation with your application, such as a certificate of incorporation, your proposed menu, and the certificate of title for your bar. You may also be required to pay a processing fee.
Once your application is reviewed and approved, youâll have to pay for your license. Fees vary by state and range from a few hundred dollars to several thousand dollars. Your license will last for at least one year, and you must pay a fee when itâs time to renew.
Even though getting your liquor license is a hassle and can get very expensive depending on your state, this is a critical step that canât be overlooked. To learn more about the process, fees, and type of license required for your business, contact your state ABC agency.
Seek Funding
Business licenses. A construction loan or lease. Renovations. You havenât even stocked your bar, and the expenses are already piling up. Unless youâre already a successful entrepreneur with plenty of money in the bank, these expenses may seem completely overwhelming.
Very few small business owners have the resources to launch a business on their own. Instead, they turn to lenders for money to fund startup costs. Even after you launch your business, there will always be a need for more capital, whether an emergency has popped up, you need to expand, or a slow period has affected your day-to-day operations.
Even if your credit history is blemished, youâre a startup with no business history, or you face other challenges, thereâs funding out there if you know where to look. Start with these options.
Personal Savings
Many new business owners have at least a little bit of money put away in their savings accounts. If youâve been socking away pennies for a rainy day, now may be the opportunity to put these savings to use. By using your own money, you wonât be indebted to a lender (or at least not as much). You wonât have to worry about making scheduled payments, and there wonât be interest or fees to worry about. On the downside, if your business is unsuccessful, you lose part — or all — of your savings.
Loans From Friends & Family
If you have a friend or family member with extra money to invest, pitch them your business idea to see if theyâre interested. But be careful! Even though you have a more personal relationship with this person, donât just have a casual conversation asking to borrow funds. Instead, give them your business plan and present your pitch just as you would with a bank or other lender. Show them why you think your business will be a success, and give them a good reason to invest in you.
If you come to a loan agreement, get everything in writing, including the total borrowing amount, rates, and terms of the loan. Put your personal relationship aside and make sure you follow all terms of the loans just as a responsible borrower should.
Personal Loans For Business
Getting a startup loan from a bank or other lender can be tough. Sure, there are options, such as Small Business Administration loans, but these loans can be very difficult to receive — especially if you have a short time in business or low annual revenue. However, if you have a solid personal credit profile, more low-cost loan options are available to you.
Instead of going directly for a business loan, try applying for a personal loan for business. With a business loan, lenders consider your time in business, personal and business credit histories, and annual revenues. But with a personal loan, your personal credit score and income are used to determine if you qualify.
By going this route, you may be able to avoid many of the high fees and interest rates of alternative business loans. Depending on your credit history and the lender you select, your cost of borrowing could be much lower with a long-term, low-interest personal loan.
Recommended Option: Upstart
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Time in business: N/A
Personal credit score: Minimum 620
Business revenue: N/A
Borrower requirements (click to expand)
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You may qualify to receive a personal loan of between $1,000 and $50,000 through Upstart. These loans have competitive interest rates starting at 7.74% and going up to 35.99% based on your creditworthiness. Repayment terms of 36 or 60 months are available. The application process is quick, easy, and completely online.
To qualify for an Upstart personal loan, you must meet a few basic requirements, including having a valid email address, verifiable personal information, a source of income, and a U.S. checking account. You also have to meet the lenderâs credit requirements, which include:
A credit score of 620 or above OR 580 or above for California residents
A solid debt-to-income ratio
No bankruptcies or public records
No delinquent accounts or accounts in collections
6 or fewer inquiries on your credit report over the last 6 months
Lines Of Credit
A more traditional financing option is a flexible line of credit. The one drawback with a line of credit is that business performance is typically a qualifying factor. If you havenât made any sales, you wonât qualify, so this isnât a good financial option if youâre not in business yet.
As you build your business, though, a line of credit can be very useful. It can be used to purchase supplies, inventory, or cover that emergency that pops up when you least expect it. You can also use your line of credit to cover payroll or daily operational expenses.
When you receive a line of credit, a lender provides you with a credit limit. You can make as many draws as you need against the line of credit up to and including the credit limit. Once you initiate a draw, the lender will transfer the money directly to your bank account, giving you access to the money you need. Over time, youâll make payments that are applied to the principal (the amount youâve borrowed) and any fees and/or interest charged by the lender.
A line of credit is a revolving account, so as you repay the lender, money becomes available to draw again.
Recommended Option: Fundbox
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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)
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You may qualify to receive a line of credit of up to $100,000 through Fundbox. Fundbox lines of credit have no restrictions and can be used to cover any business expense. Once approved, youâll be eligible to make draws immediately and receive funds as quickly as the next business day.
The Fundbox application process takes just minutes, and itâs easy to qualify. The lender focuses on the performance of your business — not your business or personal credit history — so even borrowers with credit challenges can qualify. You do, however, have to meet the following requirements:
Own a U.S.-based business
Have a business checking account
At least 3 months of transactions in your business bank account or at least 2 months of activity in a supported accounting software
At least $50,000 in annual revenue
Once you make a draw on your line of credit, automatic drafts are made weekly from your linked business checking account. If you do not use your funds, you do not pay. Repayment terms are 12 or 24 weeks and fees start at 4.66% of the total borrowing amount.
Business Credit Cards
Business credit cards work just like the personal credit cards in your wallet, only theyâre used to pay business expenses. Business credit cards are great for emergency expenses or any time your cash flow is a little short. You can also make recurring payments, such as your utility bills, using a business credit card. This is especially beneficial if you have a rewards card that gives you cash back or other rewards simply for making qualified purchases.
When you apply for a credit card, your lender will set a credit limit if youâre approved. You may spend up to and including this credit limit with one or multiple transactions anywhere credit cards are accepted. Each month, youâll make a payment that is applied to the principal, interest, and fees charged by the lender. As you pay down your balance, funds will become available to use again. If you donât have a balance, you wonât pay any interest, although you may have to pay annual fees depending on the card you select.
Recommended Option: Chase Ink Business Unlimited
Chase Ink Business Unlimited
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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
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If you have an excellent credit score of at least 740, you may qualify for the Chase Ink Business Unlimited credit card. This is a rewards card that provides you with unlimited 1.5% cash back on all purchases made for your business. As a new cardholder, you will also be eligible to receive a $500 cash back bonus if you spend $3,000 within 3 months of opening your account.
The Chase Ink Business Unlimited card comes with a 0% introductory APR for purchases and balance transfers for the first 12 months. After the introductory period, the card has a variable APR of 15.49% to 21.49%. This card comes with no annual fee. You can also receive additional cards for employees at no extra cost.
Rollover For Business Startups (ROBS)
Do you have a retirement account? If so, you can legally leverage these funds to pay your startup costs without facing tax or early withdrawal penalties. With a Rollover for Business Startups (ROBS) plan, you can put your retirement account to work for your new business.
It’s possible to access your retirement account funds with no penalties in just a few easy steps. First, create a new C-corporation. Next, create a qualified retirement plan for the corporation. Then, the funds from your qualified retirement account are rolled over into the new retirement plan. Finally, the funds that were rolled over can be used to purchase stock in the corporation, giving you access to the capital you need to start or grow your business.
Throughout the process, you do have to remain compliant and follow legal guidelines. For most new business owners, the process can get confusing, which is why ROBS providers are available to help. A ROBS provider will set up your ROBS plan to ensure everything is by the book. To get started, youâll need to pay a setup fee, then pay a monthly maintenance fee for maintaining your account.
The great thing about ROBS plans is that you are using your own money, so you wonât have to pay interest on a loan. You will, however, have to pay a monthly fee to maintain your account. You also risk losing your retirement funds if your business is unsuccessful.
Recommended Option: Benetrends
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Varies based on the type of financing you seek.
Must have a personal credit score of 660 or above.
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Benetrends is a pioneer of ROBS, launching its Rainmaker Plan in the 1980s. This visionary-plan is the longest-running ROBS plan, and Benetrends offers many benefits that outshine its competitors.
With just four easy steps, Benetrends can get the capital you need from your qualified retirement plan. With the Rainmaker Plan, you can have your funding is as little as 10 days.
To qualify, you must have an eligible retirement plan with at least $50,000. Most retirement plans are eligible, with the exception of Roth IRAs, 457 plans for non-governmental agencies, and distribution of death benefits from an IRA other than to the spouse. There are no time in business, annual revenue, or personal credit score requirements.
To get started with Benetrends, youâll be required to pay a setup fee of $4,995. After paying this fee, your C-corporation and ROBS plan will be set up. After your plan is set up, youâll be required to pay a monthly maintenance fee of $130. This fee covers ongoing support and services including legal support, audit protection, and compliance.
Purchase Financing
Paying your vendors will be an ongoing expense for your business. You have multiple options available to pay your vendors. You can pay out-of-pocket, you can use a credit card or line of credit, or you can take advantage of purchase financing.
With this type of financing, your vendors are paid immediately, while you get more time to pay. A lender pays your vendors up front, then you repay the lender over a set period of time. The lender will add fees and/or interest to your loan balance for paying your expenses upfront.
By using purchase financing, youâre able to pay your vendors immediately to receive the supplies, inventory, or services you need for your bar. Then, you can spread out your payments over time to make these purchases more affordable for your business.
Recommended Option: Behalf
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No specific time in business, revenue, or credit score requirements.
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Behalf offers purchase financing of up to $50,000 for qualified borrowers. Repayment terms of up to 180 days are available. Behalf charges fees of 1% to 3% of the borrowed amount per month for using this service. There are no additional fees. You can repay on a weekly or monthly schedule.
Behalfâs financing can be used to pay merchants for inventory or services. However, there are some restrictions. You canât pay bills, cover payroll, or pay other existing debt through Behalf.
Behalf analyzes the performance of your business when making its approval decisions. There are no time in business or business revenue requirements. Behalf does not have a minimum personal credit score for approval, although your credit history will be considered during the application process.
Create Your Menu
Before you open your bar, you need to know what food and drinks you plan to serve and what equipment is needed to properly prepare each menu item.
When planning your menu, think about your theme and the type of customers you plan to attract while also keeping your budget in mind.
Decide what type of drinks youâll serve. Most bars serve a variety of wines, beers, liquors, and mixed drinks, but what you serve may be different based on the theme of your bar. For example, in a sports bar, your drink menu may feature a wide selection of beers. If you open a nightclub, you want to have a variety of liquors and mixers on hand to create many different types of drinks. If you have a cigar bar, wines and craft beers may make up the bulk of your menu. Again, the type of bar you want, the theme, and your target audience can help you determine what you serve.
If your bar will serve food, think about the types of food youâll serve. In a neighborhood bar, appetizers like fried cheese sticks or nachos may be enough to keep your customers happy. If you have a gastropub, meals made with high-quality ingredients should make up your menu. Remember, creating the perfect menu takes careful planning, so take the time to brainstorm your ideas.
Itâs also wise to start off small and add new items as your business grows. If you have a huge menu that features every type of food and beverage you could think of, your bar will require more equipment. More equipment equals more expenses. Working with a smaller menu can also ensure that your bartenders and kitchen staff arenât overwhelmed and can focus on creating high-quality food and drinks. As you draw in customers to your bar, you can tweak your menu based on what customers are ordering, what gets rave reviews, and what falls flat.
Once youâve determined what your bar will be serving, youâll need to talk with suppliers to get estimates of costs. As you approach opening day, youâll place your order with your selected suppliers.
Still stuck on your menu? Check out our tips for creating a great menu.
Purchase Your Equipment
Once youâve secured a location and have moved further into the process of building your bar, itâs time to think about the equipment and fixtures that you need. What your bar needs depends on the theme youâve selected and what youâll be serving, but some items you may consider include:
Bar & barstools
Benches
Tables & chairs
Industrial ovens & other kitchen equipment
Coolers, refrigerators & ice bins
Blenders & other bar equipment
Big-screen TVs
Sound system
Microphones & other audio equipment
Beer taps
After youâve leased, purchased, or built your building, itâs important to create a detailed layout of your business. You want to ensure that you have enough room for everything required to run your bar, while also leaving enough space for seating, a dance floor, and other features that will be important to your customers. As you grow your business and need to add or update equipment, consider equipment financing to make these expenses more manageable.
Lender
Borrowing Amount
Term
Interest/Factor Rate
Additional Fees
Next Steps
$2K – $5M
Varies
As low as 2%
Varies
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$5K – $500K
24 – 72 months
Starts at 5%
Yes
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Up to $250K
1 – 72 months
Starts at 5.49%
Varies
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Select Your POS System
Gone are the days when most businesses just needed a cash register or two for their customers. With the rising use of credit cards, debit cards, and mobile payments, businesses — especially bars — need a more advanced system for accepting payments.
A point of sale (POS) system is one of the most important pieces of equipment youâll need for your new bar. A POS system combines software and hardware to create a centralized point for business operations. Through this system, youâll be able to take orders and accept payments, but thatâs not all.
Some of the most advanced POS systems come with features beneficial to bars. This includes built-in tipping systems, inventory management that allows you to track your stock levels, and an open ticket system for creating bar tabs.
Your POS system plays an important role in your business, so itâs important that you know what to look for before making your purchase. Check out our top picks for POS systems for bars and nightclubs.
Lightspeed Restaurant
ShopKeep
Toast
TouchBistro
Breadcrumb
Lightspeed Restaurant
ShopKeep
Toast
TouchBistro
Breadcrumb POS by Upserve
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Visit SiteÂ
Review
Visit SiteÂ
Review
Visit SiteÂ
Review
CompareÂ
Review
Monthly fee
$69+
Get a quote
$79+
$69+
$99+
Cloud-based or Locally Installed
Cloud-based
Hybrid
Cloud-based
Locally installed
Cloud-based
Compatible credit card processors
Cayan or Mercury in US; iZettle in Europe
Shopkeep Payments & some others;Â contact your processor to see if they are supported
Toast only
TouchBistro Payments, Square, PayPal, Moneris, Cayan, Chase Paymentech & more
Upserve Payments only
Business size
Small to medium
Small to medium
Small to large
Small to medium
Small to large
Hire Employees
To make sure your bar is a success, you need to have the right employees working for you. If you havenât done so already, you need to apply for an Employer Identification Number for tax purposes. Next, you need to determine how many employees you need and what their roles will be in your business.
Youâll need at least one bartender that prepares and serves drinks in your bar. You will need to add additional bartenders based on the number of bar areas you have in your business, as well as the number of customers you have to serve.
If your bar will serve any type of food, you will also need a kitchen staff. This includes at least one cook, but you may also need prep cooks, dishwashers, and other staff as your business grows.
Youâll also need servers to distribute food or pass out drinks to customers not seated at the bar. The number of servers you have is based on the size of your bar and how busy it gets.
While your servers may be able to handle cleaning tables at first, as your business grows, you may want to add a busser or two, who are responsible for cleaning off tables for new customers.
You may also require additional staff. For example, you may hire a doorman that checks IDs before customers enter the door. A security guard may also be a staff member you hire to handle tempers that flare from customers whoâve had one too many.
You also need at least one manager to oversee the staff. A managerâs role may include hiring employees, firing employees, training, making schedules, and making sure that all staff members are doing their jobs properly.
Before you start seeking job applicants, make sure to create an in-house organizational chart to know exactly who you need to hire. You also need to do your research to figure out what salaries you will offer, as well as any benefits.
Unsure of where to hire new employees? You have a few options. First, post a job ad on online job boards or classified ads to find potential employees. This is an inexpensive (or even free) way to find candidates.
You can also ask for referrals. If you know someone in the industry, ask if they have any new hires to recommend. Donât know anyone in the industry? Ask other colleagues, family, and friends for recommendations.
Bolster Your Web Presence
After completing all of these steps, youâll be that much closer to opening your bar. However, you want to make sure to spread the word about your business, and thereâs no better way to do that than with the internet.
One of the easiest ways to get the word out about your business is through social media. Facebook, Instagram, and Twitter are just a few of the ways you can reach your target audience, and Yelp For Business is a must. Best of all, these accounts are free to use. As you grow, you may consider moving past the free advertising you get through your posts and pictures and invest in advertising on these social platforms.
You also need a good website. Keep your barâs theme in mind when you design your site. Make sure that your website reflects the image you want to project. There are many small business website builders you can look into if you want to create your website yourself. These make it easy for you to create a professional website with no prior web design experience required.
Service
Pricing
Hosted or Licensed
Templates & Themes
Compatible Credit Card Processors
Next Steps
$14 – $179/month
Hosted
Excellent
Many
Go to Site
Free – $29.90/month
Web-Hosted
Excellent
Many
Go to Site
Free – $25/month
Web-Hosted
Average
Many
Go to Site
$0/month
Hosted
Good
Square Payments
Go to Site
Make sure that you include your address and phone number on your website. Information about your bar including dress code and hours of operation are also extremely useful for customers. You can also include your menu, photos of your establishment and patrons, and news and updates on your website.
Also, remember that word-of-mouth is one of the best forms of advertising for a bar. If your customers love your drinks, food, service, and atmosphere, theyâll tell others. If they dislike your bar, theyâll also tell others ⦠who will make sure to avoid your establishment. Whether your bar is brand new on the block or youâve been in business for some time, keep customer satisfaction high so that customers online and off will have nothing but positive reviews for your business.
Final Thoughts
As you can see, creating a bar where everyone gathers to have a great time takes a lot of hard work. But just as Theodore Roosevelt said, âNothing in the world is worth having or worth doing unless it means effort, pain, difficulty.â Running your own bar means planning, budgeting, and always being ready for growth. While your bar wonât make you an overnight millionaire, you can become a successful entrepreneur with this potentially-lucrative venture if you put in the work.
The post Want To Open Your Own Bar? Top Tips To Get You Started appeared first on Merchant Maverick.
As a small business owner who is launching a new shop or exploring your payment processing options, finding the right POS to accept payments is not a decision to be made lightly. You probably already know that the grocery industry has its own unique rewards and challenges. Keeping up with supply and demand, getting your name out there, competing with the bigger brands, and strengthening your own brand recognition takes time, energy, and a lot of know-how. Fortunately, Square offers a fantastic POS option for markets and grocery stores that goes way beyond just the swipe.
Read on to find out how Square payment processing tools can benefit your business whether you are opening a pop-up shop, have a brick-and-mortar store, or take your culinary delights on the go to farmer’s markets and trade shows.
Squareâs Free Point-Of-Sale Reader & App
Square is best known for the free Square Point of Sale app and the free Square Reader. Square’s iconic white reader plugs into a smartphone or tablet to make mobile payments possible. The Square Point of Sale app allows you to âswipe, dip, or tap paymentsâ whether or not you have an internet signal. If you run into a spotty WiFi connection or have a service interruption, you donât have to worry about a line bottleneck because the app can securely save data offline.
For the smaller to mid-size shop, the Square Point of Sale app has everything you will need and then some. We dive into all of these features below, so keep reading for a closer look at how Square gives you better control over more parts of your business, from inventory management to sales, employees, and even more.
Weâll also take a look at how Square can also help you completely run or supplement your marketing campaigns with an all-in-one solution that can integrate a loyalty program and private customer feedback. Most of these perks (except for the loyalty program option) are all âin-the-boxâ features that you wonât pay anything more to use with your free POS Square reader. Â Letâs dig in!
Reader
eCommerce
Retail
Food Service
Free App & Reader
Square eCommerce
Square for Retail
Square for Restaurants
Get Started
Get Started
Get Started
Get Started
Free, general-purpose POS software and reader for iOS and Android
Easy integration with popular platforms plus API for customization
Specialized software for more complex retail stores
Specialized software for full-service restaurants
$0/month
$0/month
$60/month
$60/month
Always Free
Always Free
Free Trial
Free Trial
Track Inventory
One thing will never change â people love to eat. However, keeping your supply up-to-date can be a challenge when it comes to balancing the ebb and flow of demand. Your customers come in for a specific product or ingredient; making sure itâs always there for them builds loyalty and trust. Managing inventory can be tricky if you donât have the right tools.
Thankfully, Square builds inventory management right into their product, so you donât ever have to think twice about shopping around for a suite of tools. Itâs easy to set up your inventory â you can bulk import all of your products with a CSV spreadsheet and make any adjustments to name, prices, or quantities as needed. Once your inventory is saved, you can also set low-stock alerts so that Square will let you know if you’re running low on a product. The best part is that you can determine what constitutes “low stock,” whether that’s six of an item, or 100! Youâll also always be able to take a peek in real time at what â and how much â of your products are selling.
Square’s inventory also supports variants and modifiers. Variants are helpful if you carry a product that comes in different flavors or sizes — you can keep the item listing centralized, but still track quantities of each flavor or size and see which ones are most popular. You can even set different pricing for each variant, as appropriate. Modifiers are more applicable to restaurants and cafes, but if you run a small boutique store and want to upsell customers on special bundles or extra discounted products, you could add them as modifiers.
Square’s inventory system allows you to upload photos for each product, and on a tablet you can configure the layout of products. However, if you don’t like browsing for the right item, you can also attach a barcode scanner. While the free Point of Sale App doesn’t have native label printing, you can find several viable workarounds.
Also, if you sell products in bulk, it’s important to know that Square doesn’t currently support tracking partial increments of a product, or selling by weight. Again, you can find workarounds for this, one of them being the variable price point feature. With the variable price point, you can create an item and track sales, but the POS app will prompt you to enter an amount for the sale when you select the item.
Finally, if you have more than one shop, you can take advantage of the free multi-location inventory management tools. Square allows you to set up individual preferences for each location, including taxes. You can build your inventory from Square’s centralized item catalog and adjust pricing and availability as appropriate. Plus, you can run reports to see sales by location, POS device, or even by individual employee (you’ll need an Employee Management subscription for that last report.)Â
The best part is that you can control all of this — every location, all of your inventory, all of your devices — from your Square Dashboard, which is a free web portal. Below we also cover a little bit more about the dashboard â including how it helps you keep track of employee sales, tips, peak sales times, and more.
Square Dashboard
The Square dashboard gives you an integrated look at many aspects of your store â and these reporting and analytics features are all free. You can view your stats in real time and see what is going on in your store â or stores â simply by visiting the Sales tab in the dashboard. Whether you want to dig into the data or you just want a quick visual representation of sales, you can find what you need, fast. You can access reports, view all types of transactions, and keep track of deposits all by quickly scanning the three tabs at the top of your dashboard.
The reports tab breaks all of your data down into simple graphs and data to view aspects of your shop, including:
Sales Summary: Your sales summary report is updated in real time and can be viewed by day, month, or year.
Sales Trends: See your sales performance in daily, weekly, or yearly views.
Payments Methods: This report displays how your customers pay and any fees associated with the transaction.
Item Sales: Allows you to find out how well any individual product is selling.
Category Sales: Get a quick pie-chart view of which categories are bringing in the most sales such as appetizers, side dishes, or drinks, for example.
Employee Sales: This report breaks down tips, hours worked, and when an employeeâs sales peaked for the day. (Note: You need to subscribe to Square’s Employee Management to access these features)
Discounts: Running a promotion? This report tells you how often your customers use a discount, coupon, or another offer when they buy. (More about loyalty programs through Square later in the post.)
Taxes: This report breaks all of your tax information down by the type, amount, and records any non-taxable sales in one spot.
Square also allows you to create your own custom reports, so if you want to see certain pieces of information together, you can tell Square to compile that report for you, and even how often to send it.
Don’t forget that the Dashboard is also the centralized management hub for all of your other Square services, including invoicing, employee management or payroll, and any other tools you might be using.
Built-In Marketing Engagement
One of the interesting aspects of Square’s platform is its customer engagement tools, the foundation of which is the customer directory. With Square POS, you can keep a record of all your customers, with their name, phone number, email, purchase history, and even card details, if you prefer (and your customers agree to store the card on file). You don’t need to have Square’s loyalty program to activate this feature, and it comes at no charge. It’s a great way to keep notes on regular customers and their preferences, to see who your most loyal customers are and who spends the most money in your store.Â
If you’d like to build marketing campaigns to reach out to your regulars, your new customers, or even lapsed customers, Square has the tools built right in, plus all of the data right at your fingertips. Square’s marketing services start at $15/month, which is a pretty reasonable price. The price will scale with your use of the marketing services.
With the marketing tools, you can segment your customer list and target people automatically with offers to get them in the door. So whether you are welcoming a new customer or re-engaging a customer you havenât seen in a while with a with a special discount, Square lets you tailor your marketing message to people at different spots in the buying journey.
The email tools are simple â you donât have to understand how to set up multiple campaigns because Square streamlines the creation process for you through prompts. They give you a lot of template designs to choose from and even have some holiday and special occasion suggestions. You can send out a one-time email for a birthday or set up recurring email campaigns that encourage more interaction and more opportunities to buy from you — it all depends on how you want to run your business.Â
Finally, when itâs time to review the success of your email campaigns, Square reports show you how many opens and clicks you get, as well as how many people redeem your offer.
Receive & Manage Feedback Privately
The Feedback feature can be helpful if you want a way to take charge of the customer experience and try to eliminate the troubles they encounter. It allows you to personally engage your customers â while keeping everything private. When you enable feedback management, customers who receive digital receipts also receive an invite to provide private feedback about their experience.
You can then resolve any issues between just you and your customer and hopefully make them happier and engaged. The idea behind this is that it is much easier to respond to private feedback than having to keep track of and respond to negative public feedback. Most customers appreciate being acknowledged whether the experience was good or bad, and if you do have an unhappy customer, you can make it right with a full/partial refund or a coupon for a discount on their next purchase. You can check the customer database to see what their purchase history is like and make a determination of the best offer to send.Â
Best of all, the feedback management feature is totally free to use!
Square Loyalty Program
Square encourages customer engagement and sales in yet another way â a loyalty program. The pricing structure of Squareâs loyalty program is based on the number of loyalty visits, starting at $25/month. Costs automatically adjust with the participation of your customers, and you can always track the success of any program at your dashboard to see if youâre getting your moneyâs worth.
Square’s loyalty program is very flexible and allows you to tailor rewards to your business and your branding. You can opt for something as simple as a digital punch card, where customers earn a reward after so many purchases, or you can structure a more advanced reward system that allows your customers to collect points and cash in their rewards when they want. You can even let them choose from multiple tiers — they could opt for two lower-tier rewards, or spend all their points on a single higher-tiered reward.Â
However you choose to structure your rewards program, you can track the performance on your dashboard. You can see how many customers enroll, how often customers redeem rewards, and how many subsequent repeat visits youâre getting.Â
According to Square, customers who join their loyalty programs spend 37% more after they join it. Across the board, loyalty programs continue to work for businesses of every size to encourage repeat business, and we think that itâs definitely worth giving it a try for a while and seeing if it works for your business.
Fully PCI Compliant & Secure
When dealing with credit card processing companies, one of the biggest questions most business owners have has to do with safety and security. You want to know that your data is secure and your customerâs payment information isnât going to be compromised, because when it all boils down, the burden is on you to make sure that you are PCI compliant. “PCI” is shorthand for the Payment Card Industry Data Security Standard (also sometimes called PCI DSS). No matter how big or small your business is, if you accept credit cards, you have to follow the best practices of the industry when it comes to security â and you can face penalties if you donât.
To remain secure and compliant for each credit card you take, you have to follow the security guidelines when you swipe, key in, store, or transmit their card data. For starters, data must be encrypted properly at each stage of processing and storage, and each year the standards change.
The whole security and compliance issue can be expensive for the smaller to midsize business, and for some, the issue is intimidating enough that they avoid credit card payments altogether.
The great news is that when Square offers you their product or service, they are taking the burden of PCI compliance on themselves when it comes to their hardware and app. Square is an industry leader in security and compliance. Their team participates on the PCI board itself and has an inside view into the ever-changing world of data security. What that means for you is that when you use Square, you donât have to jump through any other security hoops â Square maintains PCI compliance and does the work for you. You won’t even need to pay any PCI compliance fees.Â
Cost Per Swipe & Getting Started With Square
Getting started with the Square POS app and the reader you will use to swipe your customerâs cards is entirely free. Square continues to remain a favorite among small business owners because they donât charge sign-on or monthly fees for their free POS reader or app â and they donât make you sign contracts and punish you with charges if you decide itâs not for you.
If you bring your own smartphone or tablet and combine it with one of Square’s mobile card readers, you’ll pay 2.75% for each swiped, dipped, or tapped transaction. If you opt for one of Square’s all-in-one hardware systems, such as Square Terminal or Square Register, you’ll pay slightly different rates. With Square Terminal, swiped, dipped, or tapped transactions process at 2.6% + $0.10 per transaction. If you want to know more about all of Square’s different card readers and hardware, check out A Guide to Square’s Credit Card Readers and POS Bundles.
Considering that these are pretty low rates to begin with, and there are so many additional built-in features like dashboard analytics, invoicing, the customer database, and inventory management, we think that is a pretty sweet deal for any grocery store looking to expand.
If you are curious and want to dig even deeper, check out our Square review or visit the Square Point of Sale page and sign up for free to see how it all works for yourself!
Reader
eCommerce
Retail
Food Service
Free App & Reader
Square eCommerce
Square for Retail
Square for Restaurants
Get Started
Get Started
Get Started
Get Started
Free, general-purpose POS software and reader for iOS and Android
Easy integration with popular platforms plus API for customization
Specialized software for more complex retail stores
Specialized software for full-service restaurants
$0/month
$0/month
$60/month
$60/month
Always Free
Always Free
Free Trial
Free Trial
The post Why Square Is A Great Free POS For Markets And Grocery Stores appeared first on Merchant Maverick.
