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Take Credit When Starting Up a Business the Right Way

June 6, 2012 by Thomas 1 Comment

For the new small business person just starting out, putting necessary start-up costs on a credit card can be very tempting. It can also be financially damaging, leading the business owner to have to dig out for a long time to come.

In the event you’re about to open a small business, do things the right way when it comes to your business plans, avoiding placing yourself in a financial hole.

You will want to look at two facets of credit cards – potentially using one for some of your start-up costs, while also looking at accepting credit cards for purchases from your customers.

Among the things to focus on in getting a credit card:

  • Avoid running up credit – If needed; apply for a small business loan which normally will present smaller interest rates than a credit card would. This of course is provided that you do not have a bad credit history;
  • Pay off sizable credit card debt – In the event you have a lot of credit card debt, be sure to get it paid off. It should not come as a surprise that paying it off as quickly as possible is less expensive over the long haul since you’re not dealing with major interest rates. Among the ways to do this would be paying more than just the minimum each month, starting with paying down the card with the largest interest rate first;
  • Check your credit report – Make sure you periodically check in on your credit report to look for any mistakes that could negatively impact your credit along with your interest rate. In the event there are mistakes, be sure to report them to the credit-reporting agency;
  • Pay all bills on time – Nothing is worse for your credit record than being late with payments. In the event you are going to be late with a payment for whatever reason, contact the credit card company so they are alerted to the situation. In some cases, they may be willing to work with;
  • Shopping around – In the event you will be getting a new credit card, make sure you compare cash advance rates along with your balance transfer options. In some instances, banks will waive a transfer charge, meaning you can switch a present balance to a card with better rates;
  • Know the ramifications of failure – If your business does not take off and you are saddled with bills, there is a good chance you will still have to pay off your credit company credit cards. Check with the credit card issuer to see what their terms and rules are should this scenario present itself.

If you have your small business ready to roll and want to accept customer credit cards as a form of payment for purchases, here are some things to remember:

  • Credit card payments boost business – It is relatively well-known that those businesses accepting credit card purchases tend to finalize more sales from customers than those that do not. Along with aiding consumers when they are low on cash funds, credit cards can present them with rewards features and programs;
  • Determine pros and cons of merchant accounts versus third-party credit option – It is always a good idea to review the advantages and disadvantages of both. If you are an online business, utilizing a third party can lessen costs when it comes to setup charges for one. Saving on setup costs, however, typically means a large charge per transaction;
  • Know how to work the hardware – Lastly, make sure you and/or staff have proper training and support when it comes to terminal usage. The majority of merchant service providers will make available employee training workshops and manuals related to terminal usage. As for online third-party vendors, they generally are available on both e-mail and IM.

At the end of the day, credit card services for a small business start-up can be beneficial for both owner and customer.

But like with all things centered on money, know how to properly use the cards so that both owner and consumer are not left staring a massive debts.

Photo credit: ehow.com

Dave Thomas, who discusses subjects such as small business online marketing, writes extensively for San Diego-based Business.com.

Filed Under: Business Life, Successful Blog Tagged With: bc, credit cards, credit report, finances, small business

How to Manage Your Finances in the Cloud

March 23, 2012 by Liz 1 Comment

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Once upon a time, personal finances were relegated to stacks of messy piles that would often find its place next to a trashcan. Then came software packages like Quicken that allowed families and individuals to crunch financial information and make sense of it all through simple templates.

However, limitations soon become evident, as software’s ability to help users set budgets and manage personal finances day-to-day only went as far as the user’s own limited expertise.

Now there is a wave of new personal finance websites and applications like Mint that not only perform the tasks of conventional financial software, but that also serve to help individuals and families make day-to-day decisions about their finances.

This is the primary difference — and advantage — of these new cloud-based financial sites. While financial software passively absorbs the banalities of one’s utility bills and investment portfolio, sites like Mint actively advise users—effectively acting as a personal financial manager, helping users stick to monthly budgets and achieve long term financial goals.

Getting started with a personal finance site is also much easier than installing and inputting data into a software package. Logging in, a new user will be asked to provide either a bank account or credit card account number, the website then takes over to import all the relevant information about this primary account.

Many Americans already pay most of their bills through automatic payments drawn from their bank accounts, so sites like Mint are designed to prompt and actively acquire this information as well.

Users will be prompted to add more and more information about their financial lives to their personal page. This can include mortgages, investment portfolios, automobile payments, loans, and also things like projected spending on necessities, as well as the not so necessary.

What makes sites like Mint so extraordinary is that they not only process and aggregate this information; they also make sense of it and then take action.

Mint will calculate average spending and then lay it against a projected budget, providing comparative analysis with the deft and accuracy of a CPA with a Masters in Accounting . The site will not only alert users to the potential for overdraft fees, but will also alert them when spending threatens to overwhelm a budget or when expected income falls short.

Some still have lingering concerns about managing personal finances in the more ethereal realm of the cloud, where a faceless entity directs our most important financial decisions. But, of course, herein lies the true genius of sites like Mint.

Daily finance, budgeting and investing might seem like the more cut-and-dry, analytical parts of our lives, but actual personal finances are bound up with the most emotional decisions we make for ourselves, including how we support our families, and how we imagine our future. As such, these decisions are often made through the haze of our anxieties and desires rather than with a cool head, rationally calculating factors with an eye on the future.

Personal finance sites like Mint not only organize and simplify the various machinations of our financial lives; they also gently disengage monetary decisions from the sometimes-tumultuous emotional world of daily life.

—-
Author’s Bio:
Tony Radford writes for Accounting EDU, an online resource for individuals interested in career advancement, education, business, and finance tips.

–ME “Liz” Strauss
Work with Liz on your business!!

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Filed Under: Business Life, Successful Blog Tagged With: bc, finances, LinkedIn, Work at home

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