small business

Need Business Credit? Build Your Personal Credit First

Elaine Pofeldt — Wed, 04 Apr 2018 08:30:09 +0000

The most exciting opportunities in a small business often arrive unexpectedly. And sometimes, taking advantage of them requires money — more than you may have at the moment. Whether you need to fill a big retail order or hire contractors to complete a professional services contract, you'll be able to act a lot more quickly if you have business credit lined up.

Many small business owners don't realize that their personal credit plays a big role in obtaining the business credit they need until they actually apply for it. Entrepreneurs are often surprised to discover that for both small-business loans and business credit cards, lenders typically require a personal guarantee.

It's very difficult to get credit based solely on the business's credit profile unless you run a very substantial-sized business. So how can you get business credit if you have a limited personal credit history or made mistakes with your personal credit in the past? There's really only one answer if you want to borrow at attractive interest rates. It's buffing up your personal credit.

Fortunately, you can make a difference in your credit profile quickly if you start doing the right things today. Here are some strategies to put into action ASAP.

Create a wall between your business and personal finances

If you've been using your personal checking account to deposit payments from clients, make this the week you get serious about your finances and open a separate business checking account. To do so, your bank will probably require you to have an employer identification number (EIN), so make getting one your first step, if you don't have one already. You can apply online for an EIN from the IRS.

Keeping a separate business bank account will help you to maintain the protections that come with your business entity, if you have set one up, safeguarding you from financial liability. It will also force you to bring valuable discipline to how you manage your business and personal finances. If you are constantly raiding your business bank account to pay personal bills or vice versa, you probably don't really know where you stand in either area. Getting clear will help you to make better financial decisions in both arenas, which should ultimately lead to better credit.

Know your personal credit score

If you have poor personal credit, it will be hard to get a business loan. Many people don't know their score, so take a few minutes to find out what yours is this week. You can buy your personal credit scores from each of the three major credit bureaus (Experian, TransUnion, and Equifax), and at MyFICO.com. It usually costs less than $20.

Many credit cards also offer free credit scores for cardholders. While each paid and free credit score will be slightly different from the one ultimately used by your business lender, they can give you a good estimate of what that score will be. (See also: Are Free Credit Scores from Credit Cards the Real Thing?)

Your FICO credit scores — the ones used most often by lenders — reflect five factors, including your payment history, the amounts owed, the length of your credit history, your credit mix, and new credit (opening a lot of new cards can be considered risky behavior).

FICO scores range from 300 to 850. If you're going after a small-business loan, most lenders want to see a FICO score of 700 or better. If yours is below that, take the time to rebuild your credit before applying for business credit.

Take charge of your personal debt

Pay down any balances on your personal credit cards as quickly as you can. It will be hard to get business credit if you are maxed out personally.

Focus on the cards with the highest interest rates and highest credit utilization to improve your situation most quickly. (With revolving credit, lenders look at the ratio of your current balance to your available credit to come up with a credit utilization ratio. The lower your credit utilization, the better.)

If you have maxed out one personal card but other cards are empty, consider spreading the debt among those other cards by doing a balance transfer. Ideally, look for a 0% APR balance transfer deal.

Limit use of your personal cards

If you know you'll need business credit in the next three to six months, do all you can to limit your current spending on personal credit cards, unless you're paying off the balance each month. Make sure to pay all of your credit card bills on time, as well.

Running a business inevitably comes with financial surprises. The more work you do to keep your personal credit in shape, the easier it will be to handle the unexpected — and the more peaceful your life will be.

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This article is from Elaine Pofeldt of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What Does Your Personal Guarantee On a Business Credit Card Mean?

Jason Steele — Fri, 12 Jan 2018 09:30:05 +0000

Millions of Americans own their own businesses, and each one of them can potentially qualify for a small business credit card. Small business credit card holders need to be aware that they are personally liable for repayment of their charges, but what does this mean?

What your personal guarantee means

Your small business may be incorporated in different ways, or it may just be a sole proprietorship. But regardless of your company's legal structure, you will almost always be personally liable for the charges on your business credit card. (See also: When You Should Get a Business Credit Card Over a Consumer Card)

Wording in the card's terms and conditions will usually state that both the business and whoever signed for the account are liable for all transactions made with all cards (including those of authorized users) and convenience checks on the account. It may also say that if you leave your company, you will continue to be responsible for outstanding balances on the account. (See also: How Small-Business Credit Cards Affect Your Personal Credit)

These personal guarantees mean that you will always have to pay the charges on your business credit card account. You can't claim that you aren't responsible for paying the charges of your business partner or your employees. You can't say that the debt is part of "the company" and that you no longer work there. In short, you are just as responsible for all of the charges to your small-business credit card account as you would be if they were made by you on your personal credit card. (See also: Best Credit Cards for Small Businesses)

There is a type of business card that doesn't require a personal guarantee, but that's a corporate card designed for larger companies, nonprofits, and government organizations.

Can you get a business credit card without a personal guarantee?

It's possible to get a small business credit card without a personal guarantee, but it's not easy and it takes time and patience. It helps if you keep your personal credit record pristine, while building your business credit scores. FICO, Equifax, and Experian all have their own business credit scores, but the Dun and Bradstreet score known as Paydex is one of the most widely used. To get a Paydex number, you have to file for a DUNS number through the D&B website, and the bureau must have payment records from at least four vendors.

You build your business scores over time, by using small business credit cards responsibly, keeping your credit utilization ratio low, and paying on time every month. But not all small business credit cards report activity to the credit bureaus. Some only report negative activity such as delinquencies, and others don't report at all. Check with any credit card you're considering applying for to see if and how they report to the credit bureaus.

If you get a small-business loan, line of credit, or trade line from a vendor who reports to the business credit bureaus, that also helps build your business credit. Loans backed by the Small Business Administration are guaranteed by the SBA and are therefore very attractive, but they're also hard to get.

Once you have built a solid business credit score, you can ask your credit card issuer if they will remove the guarantor from the account. The bank will conduct a review of the account, and may check both your personal and business credit reports. The bank wants to see that losing the personal guarantee won't increase the risk of nonpayment. If they agree, great, you're on your way to a guarantee-free account. But some banks never remove guarantors as a matter of policy. (See also: 5 Ways to Build Business Credit When You're Self-Employed)

Another way to get credit without a personal guarantee is to grow the business to the point where it meets the revenue and size requirements of some creditors. For example, one major retailer offers a business card that doesn't require a personal guarantee for businesses with at least $5 million in revenue. Others may also require collateral such as business equipment.

Getting business credit without a personal guarantee is not a quick process. Count on needing a personal guarantee for the first three to five years of your business. In the meantime, focus on growing your company, building your business credit score, and making all payments on time.

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This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is Your Small Business Targeting the Wrong Customer?

Elaine Pofeldt — Thu, 04 Jan 2018 09:30:11 +0000

You've met with a potential client, had a couple of great conversations by phone, and followed up. So why isn't your prospect ready to start work? The problem may not be you. It may be that you're talking to someone who will never buy what you're selling.

There could be many reasons. Maybe you're talking with a serial researcher who may never make a decision. Or perhaps the person has no budget to spend or an unrealistic understanding of what services like yours cost to deliver. It's easy to waste hours by spending too much time with tire kickers, so the sooner you recognize you're talking to the wrong customer and move on, the better. Here's how.

Know how to spot your ideal clients

Regardless of your industry, your ideal clients will probably have two characteristics: They're great to work with, and they're profitable. In many cases, they may also be repeat buyers.

Look beyond these factors to identify if there are any common threads in your customers' industries, company size, or location, so it's easy to spot them when they're in front of you. You can use popular accounting software programs like FreshBooks and QuickBooks to sort your clients this way. You may spot some interesting patterns you had not noticed, like one particular state where you get a lot of business.

Look a little deeper. If, for instance, you sell marketing services and most of your clients are big companies, peruse the job titles of the clients who have signed contracts with you. Perhaps buyers in these firms tend to have a certain level of seniority in their organization. This doesn't mean you should ignore prospects with more junior titles, but if those junior buyers seem to be moving slowly, you may need to involve more senior people on their team to move a project along. (See also: 8 Common Myths About Starting a Small Business)

Ask qualifying questions

Learning as much as possible about why clients are considering buying your product or services can save you from spending a lot of time with someone who is highly unlikely to move ahead or won't turn out to be a good fit.

I do this when people ask me to ghostwrite books for them — a process that takes a lot of time and energy for both the author and myself. In our first conversation, I might ask: "Why do you want to write a book?" If the author is eager to share ideas they're passionate about with the world and says they've already done a rough outline of the book or lectures on the topic, those are positive indicators.

However, if someone says that colleagues, a spouse, or friends keep nudging them to write the book, I'll suggest a smaller project first to make sure they are truly motivated. Even if someone has the budget to hire me, I don't want to work with someone who is likely to lose steam and see the project fail.

There are many other qualifying questions you can ask to weed out people who are not serious. You might, for instance, ask if they need a project by a certain deadline — which will naturally give them an incentive to hire you. You might also ask what their expectations are. If they would like to receive certain services you don't offer and that you don't want to start providing, that's a disqualifier. (See also: 6 Helpful Tools to Manage Your Small Business)

Be transparent about pricing

Many business owners hesitate to talk about what they charge because they're afraid of scaring clients away. That can be a big mistake. Many potential clients could be price-sensitive, so being direct and upfront about what you charge, by sharing it early in your conversations, can save you a lot of time.

If someone's budget is too small to afford your highest-end products or services, be prepared to suggest other creative alternatives. For instance, instead of the yearlong retainer contract you usually offer, what about a three-month version? That way you won't have to turn away clients who you might otherwise enjoy working with.

Watch out for clients who don't value your time

When you hire outside professionals — whether to do your social media or clean your house — do you expect them to donate their time? I didn't think so.

One sign that you're talking to the wrong clients is that they want you to "prove" yourself by doing a project for free. Someone who does not understand that you need to get paid for your work now will never respect your time and is likely to become a nonpaying client later. If prospects want to get a chance to see what it is like to work with you, suggest they work with you on a very small, paid project instead. (See also: How to Get a Small Business Loan)

There's one exception. If you're selling clients access to a service many people haven't tried yet, such as a specialized type of fitness class, there's nothing wrong with offering one free trial class or even a discounted monthly membership to make sure they know what they're buying. Just make sure you're offering an experience they will value enough that they want to come back when they have to pay full price.

Relying too heavily on bargain hunters for your cash flow could lead to a crowded atmosphere that drives away clients who would be willing to pay you a little extra for some elbow room and tranquillity. Experiment until you find the right approach to attract great new customers and keep your ideal ones coming back. Once you find the right balance, you'll enjoy your business a lot more.

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This article is from Elaine Pofeldt of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Small Business Credit Cards Affect Your Personal Credit

Jason Steele — Tue, 21 Nov 2017 09:30:10 +0000

If you're looking for a new credit card, then you’ve probably noticed that many cards are offered in both personal and small business versions. Business credit cards can offer rewards and benefits more suited to the needs of small companies, but how does their use affect your personal credit?

Business credit card basics

When you apply for a small business credit card, the card issuer will check your personal credit report and credit score to see if you qualify for a new account. It doesn’t matter whether you supply an Employer Identification Number (EIN) or a Social Security Number, your personal credit information will be checked, since nearly all small business credit cards require your personal guarantee of repayment. This means that even if your business dissolves, gets sold, or goes into bankruptcy, you’re still responsible for paying off the credit card debt. The credit card may have your business name on it, but as part of the application, you agree to be personally responsible for it. (See also: 5 Ways to Build Business Credit When You’re Self-Employed)

How applying for a business credit card affects your credit

When you apply for any new credit card, it has several effects on your credit. To grasp these, it helps to understand the five main factors that go into your FICO score — the most commonly used personal credit score. These factors are:

Payment history (35 percent of the total credit score): On-time payments are the most important part of your credit score. (See also: How Late Payments Affect Your Credit)

Credit utilization (30 percent of the total score): It’s best to keep your credit utilization ratio — the amount you owe compared to how much total credit you have available — as low as possible.

Length of credit history (15 percent of the total score): The higher the average age of your accounts, the better. (See also: Why the Age of Your Credit History Matters)

New credit: (10 percent of the total score): Opening too many credit lines at once could suggest you’re having financial trouble.

Credit mix: (10 percent of the total score): Lenders like to see that you can handle a variety of debt types, such as installment loans and credit cards. (See also: How Credit Inquiries Affect Your Credit Score)

When you apply for a new card, it affects the new credit part of your score because the application will result in a new inquiry on your credit report — a so-called hard inquiry. Applying for a single line of credit will have very little effect on your credit score, but applying for multiple new lines of credit in a short period of time could cause a small, temporary drop in your score.

How business credit cards may affect your personal credit differently

In most ways, a small business credit card will affect your credit just like a personal credit card. However, some credit card issuers only report your business credit card account if it’s delinquent and don’t report balance and payment information at all. Therefore, your use of business credit card accounts may or may not affect your credit one way or another. (See also: When to Get a Business Credit Card Over a Consumer Card)

Assuming you have a card that does report regularly to your personal credit, once approved, the new account will affect the credit history part of your score. It will lower the average age of your lines of credit, which on its own might cause a small drop in your score, especially if you have a very limited credit history.

Your monthly balances and payment for this new account will appear on your credit report as well. So long as you make your payments on time, this new account will help build your credit history, which is good for your credit score.

Finally, having a new line of credit may or may not help to reduce your credit utilization ratio. A card with a large credit limit (and business cards tend to have higher limits than personal cards) raises your amount of available credit. But in order to keep your utilization ratio low, you have to keep your balances low. If you quickly max out the new card, you could actually hurt your credit utilization ratio.

If you get a business credit card that doesn’t report to your personal credit, then the small dip in your credit from the hard inquiry will bounce back and nothing else will happen to your credit, unless you default on the business credit card. Then it will appear on your credit report as a loan in default.

The only way to know for sure if your business credit card accounts are reporting your balance and payment information is to look at a copy of your credit report. You can obtain a free credit report each year from each of the three major consumer credit bureaus by going to AnnualCreditReport.com.

How business credit cards affect your business credit report

In addition to possibly affecting your personal credit report, your small business credit card may also affect your business credit reports. Your issuer may report your balance and payment information to companies that compile credit reports on small businesses. The main business credit reporting agencies are Dun & Bradstreet, Experian, and Equifax. For many small businesses, having a strong business credit report is vital to securing future lines of credit and favorable payment terms from suppliers. It’ll also benefit you to be able to get funding without a personal guarantee, which can only happen by building a strong business credit history first.

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This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Build Business Credit When You're Self-Employed

Elaine Pofeldt — Tue, 07 Nov 2017 08:30:20 +0000

It's hard to beat the freedoms of being self-employed. But with the joys of being your own boss and creating your own schedule come some trade-offs. One trade-off can be unsteady income.

Even if you are very careful about your finances, it's possible that a great business opportunity will present itself that you simply don't have the cash for. If you've built good business credit and have access to a business credit card or line of credit, it will be easier to jump on those opportunities.

Building good business credit can seem like a mysterious process if you've never done it before. Here's how to get started. (See also: Best Credit Cards for Small Businesses)

1. Establish strong personal credit first

The vast majority of small business credit cards require you to personally guarantee the charges you make — even if the card is issued in your business's name. That means if the business fails, you will still be responsible for the debt.

Because you ultimately will be the one who pays the balance, expect lenders to pay attention to your personal credit when you seek business credit. Under the Fair Credit Reporting Act, when you apply for business credit, a lender has the right to look at your personal credit profile to evaluate whether to issue it to you.

To make sure you have a full array of options when it comes to business credit cards, make sure you are paying your personal cards on time and not maxing them out. A high credit utilization ratio — that is, using a large percentage of the credit available to you — can cause your credit score to drop. (See also: 5 Ways to Improve Your Credit Score Fast)

2. Run your business like a business

If you want to get business credit in the future, keep good financial records by using accounting software such as FreshBooks, QuickBooks or Xero. Using software designed for this is much easier than using spreadsheets and reduces the chance that you'll make mistakes.

Many accounting software programs have a "reports" function that allows you to create a profit and loss (P&L) statement with the click of a button. A P&L statement shows all of your sales and expenses for a set period, such as a year. To get a business line of credit with your bank, you will very likely have to produce one of these statements, so this feature is a huge timesaver. (See also: 5 Free Accounting Tools for Freelancers)

3. Keep your business finances separate

Before you try to open a line of credit with your bank or apply for business credit cards, open a business checking account. This will show lenders you are serious about running your business.

Maintaining a business checking account also gives you an opportunity to develop a relationship with your banker. If money is flowing into your account regularly, you are maintaining more than the minimum balance, and you are handling the account responsibly (i.e., the checks you write are clearing), chances are that your banker will begin to offer you products such as a business credit card and possibly a line of credit.

Don't use your business checking account to pay your personal bills. You need to establish separation between your business and personal finances and keep accurate records.

To open a business checking account, you will generally need a federal Employer Identification Number (EIN). You can apply for one online through the IRS.

4. Use your business credit card strategically

If you don't have strong personal credit, you may still be able to get a business credit card. There are some higher-interest cards designed for people with a "fair" credit score.

While paying higher interest isn't ideal, if you use the card responsibly, you'll be able to improve your credit profile and should qualify for better deals in the future.

Once you get a business credit card, use it regularly to make business purchases and pay the bill on time — ideally in full — to build a history of using it responsibly. Don't use the card for personal spending. If you connect this card to your accounting software, it will be easy to enter your business expenses, saving you a lot of time.

5. Monitor your business credit report

How do you know if you are actually building good business credit once you make these efforts? Use the free searches on Experian, Equifax, or D&B to see if your business's credit is being tracked. (You will have to pay to get the actual report).

There's a different system for business credit card scores than for personal ones. Business credit scores go from 0 or 1 to 100. Each of the major credit bureaus uses its own formula, but factors such as how long you've been in business, your credit utilization, and the lines of credit you have opened in the last six months are likely to affect your score.

If you find your business isn't on the radar screen of the major credit bureaus and you have already gotten your EIN, try applying for a free D-U-N-S number with Dun & Bradstreet, which should get the ball rolling.

All of these steps take some work and can't be done overnight, so start early — ideally a few months before you think you'll need business credit. It'll pay off. Having strong business credit is a valuable asset that you'll greatly appreciate if you ever get into a cash crunch.

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This article is from Elaine Pofeldt of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Grow Your Solo Business Without Hiring Employees

Elaine Pofeldt — Thu, 12 Oct 2017 08:30:10 +0000

The conventional wisdom is that to "scale" a business, you have to do it the traditional way — by hiring employees. Otherwise, the thinking goes, you'll be limited to whatever revenue you can generate personally.

That presents a conundrum. What if you really don't want to hire employees because you're not the managerial type — or can't pull it off financially? Creating jobs does a lot of good for society, but it is a big responsibility. For very small businesses that have uneven cash flow, it can be unmanageable. You can't just opt out of cutting paychecks one month if a big client pays you late. Employees depend on getting paid on time.

Fortunately, there's another option. In the digital age, it's increasingly possible to grow revenue in a one-person business or partnership without hiring traditional W-2 employees. In researching my upcoming book, The Million-Dollar, One-Person Business, I came across many people who were approaching or breaking $1 million in revenue without adding employees. They are among the 35,584 owners of "nonemployer" businesses that the U.S. Census Bureau found were hitting or breaking $1 million in revenue in 2014. (Nonemployer businesses are those staffed only by the owners.)

So what are they doing? It runs the gamut. Entrepreneurs are breaking $1 million while running internet retail sites, professional services firms, real estate investment firms, healthy cooking online courses, and many other businesses. It's not necessarily the type of businesses they run, but the way they run them that has enabled them to scale. Here are three growth strategies they are using that anyone in a one-person business can start using today to greatly increase revenue.

Outsource

In many small businesses, your time is your currency. If you waste it on nonproductive activities that don't add to the bottom line, you'll never maximize your revenue. The conventional wisdom is you need to hire staff so you can offload tasks that can be delegated, but many of the million-dollar entrepreneurs I interviewed used another approach. They outsourced whatever they could to make their business more efficient.

One example was Camille and Ben Arneberg. They started Willow & Everett, a store with its own website and a presence on Amazon, in 2015. Neither was a retail veteran. Camille had worked in the corporate sustainability field, while Ben had been in the military. But they loved home entertaining and had a knack for selecting products other people like, such as decorative tea kettles.

The couple started small, investing $5,000 in inventory, and reinvested in new products as they went along. By April 2016, they had grown the business to $1 million in revenue, one year and four days after their launch.

One secret to their rapid growth was hiring the right kind of service to help them. After trying to pack a bunch of early orders themselves and finding their home buried in boxes of mugs, they switched to using a fulfillment service offered by Amazon. Although there is a small cost for this, the service handles tasks like labeling and fulfillment, freeing the Arnebergs to focus on growing their business.

Contract it out

One of the myths about running a one-person business is that it's an isolated affair. In reality, many smart solopreneurs rely on a team of trusted contractors to expand their capabilities. One entrepreneur I interviewed, Dan Mezheritsky, founder and president of Fitness on the Go in Vancouver, follows this model. As a former junior national champion decathlete in Canada, Mezheritsky founded his one-person, in-home personal training franchise in 2005 and grew his own annual revenue to $1.5 million in 2016. He did it by building a network of 180 personal trainers, who are all contractors.

Mezheritsky got burned out on the idea of bringing on traditional employees after finding out that many of his original hires were not motivated to help him grow the business. Because they were paid on salary, they didn't share in the financial gains the business made in a tangible way. When he switched to hiring them as contractors, that changed. Now that they had their own businesses, they saw a direct financial benefit if he brought on new customers — whom they would get to serve.

Mezheritsky provides help to the trainers that makes it more advantageous for them to work for him than on their own entirely. He licenses the right to use the company's brand name to the trainers and provides support with business management, leads, continuing education and other areas of the business for $400 a month. The company sets prices for the training sessions and the trainers keep about 91 percent. "It was a no brainer for the trainers, when they took a look at what they were receiving," Mezheritsky told me. "It was simpler than trying to do everything on their own."

Automate

Like many of the million-dollar entrepreneurs I interviewed, Mezheritsky is passionate about finding ways to automate repetitive tasks in his business. For instance, he hired a pro to help him build customized software that handles billing for all of his trainers, acts as a customer relationship management platform, handles his client rewards program, and more.

But you don't have to build your own software in most one-person businesses. For instance, you can save several hours a week on scheduling tasks by using inexpensive tools like ScheduleOnce or Calendly — scheduling programs that let you send business contacts a link to your public calendar so they can book a time to meet with you without emailing back and forth.

My new favorite app is Everlance, which tracks your mileage automatically from a smartphone. That way, you don't have to keep a written journal in your car.

Incorporate a couple of other time savers like that and you can easily free up a day every week to recharge and figure out new ways to grow your business — while enjoying the pleasures of running an ultra-lean operation.

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This article is from Elaine Pofeldt of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Hire Your First Employee

Annie Mueller — Fri, 28 Jul 2017 08:30:10 +0000

Hiring your first employee is exciting! And also pretty intimidating. You don't need a complicated system in place to make your first hire, but you do need to take a few essential steps along the way. Here are some ways to simplify the process of hiring your first employee.

Decide what your employee will do

First things first: You know you're busy and you have more on your plate than you can accomplish alone. However, do you know exactly what your employee will take off your hands? Before you write an ad or think about a salary, make a list of the tasks and responsibilities you'd like to hand off to an employee. This list will help you hire the right person, and will also help you know exactly how to get them to full productivity quickly.

Write that employee handbook

Writing an employee handbook sounds like an overly complicated, formal process. It doesn't have to be! An employee handbook can be direct, casual, whimsical, full of pictures, and even interactive. It can also be a simple document of a few pages that covers the important values and rules you need to have in place for all employees, present and future. The U.S. Small Business Administration has a thorough guide to writing a handbook, or you can find free templates online.

Set up a payroll service

In hiring an employee, what's most important to you is getting work done. What's most important to your first employee is getting a paycheck. Take some friendly advice: Hire a payroll service to handle the paycheck part of the equation. You will save yourself countless dollars in time and headaches. A good payroll service will provide necessary tax withholdings according to federal and state rules, keep accurate documentation, allow customizable withholdings to be set as needed, and ensure that your employee gets paid on time. All you have to do is go through the initial setup process and put a salary in place.

And for the record: It's a really, really good idea to pay yourself through a payroll service, too. Missing tax documentation will always come back to haunt you.

Advertise for a great employee

Now you're ready to start seeking your first employee. Start by writing a great job listing ad. How, you ask? The keys to a great employment ad are specificity and authenticity.

Specificity means that you'll list the exact tasks and responsibilities that your employee will take on. Don't use a vague term like "Office Manager" or "Production Assistant" without stating exactly what that means in your business. By making your ad specific, you will automatically filter out the applicants who aren't qualified or interested in completing the work you actually need done.

Authenticity means that your employment ad should be like you, and like your business. If you're a casual, mom-and-pop kind of place, don't write an ad with formal language and overblown requirements for employment. Use first-person language, for example: "We're looking for someone to work at the front counter."

On the other hand, if your business is a more formal establishment with a dress code and high-end clientele, reflect that accurately in your advertisement. Use a more formal tone: "Bobkin, Bobkin, and Butters, LLP, seek a qualified office assistant." The language and tone you use in your initial ad help you attract the type of applicant that will fit well and work well in your business.

Provide initial training

While you're waiting for the pre-filtered applications to roll in, thanks to your stellar employment ad, get your training materials in place. Do this by going back to that list of tasks and responsibilities that you want your first employee to handle. For each major task, write down the step-by-step process to complete it, well, completely. For each responsibility, list the tasks to be completed and, as appropriate, the timelines, resources, contacts, and other pertinent information.

When you make that first hire, you'll have the information to start their training. As a general rule, it's a good idea to do two things: First, provide a copy of the complete training material to your employee, so they can go over it and get a big picture of the role they're taking. Second, prioritize the tasks and responsibilities and work with your new employee on each one in order of importance.

Set up a system for performance reviews

Ah, the dreaded performance review! Employees don't tend to love them, and frankly, neither do employers. However, when done well and frequently, reviews can create a working relationship that's much more beneficial for everyone involved.

Start by letting your employee know that you will provide weekly feedback in their first month, or quarter. This is important as new employees often have no way to gauge if they're doing the job right and meeting your standards, or not. Not knowing leads to anxiety and tension, which leads to more mistakes, and can create an ugly cycle of stress and mess-ups. Provide clear, regular, weekly (at a minimum) feedback for your new employee for at least their first month.

Thereafter, feedback sessions on a quarterly, monthly, or even a continued weekly basis are the most effective. Annual reviews are too few and far-between to be effective; they have the fun effect of making employees feel blindsided and betrayed. Don't do that! Instead, provide ongoing, informal feedback to your employee, either in face-to-face meetings or via phone, email, or messaging.

You can provide feedback on a scheduled basis (weekly or monthly, for example) or after the completion of a task or project. In both cases, shorter, more frequent meetings tend to be more helpful. For best results, focus less on "what you did wrong" criticism and more on "specific steps to improve" instruction.

A last note: It's a great idea to get feedback from your employee, as well as giving feedback to your employee. It's your first hire, but it probably won't be your last. Ask your new employee how you can make the process easier and be a better boss; you'll be even better prepared when it's time for your second hire.

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

13 Businesses Your Tween Can Start

Carrie Kirby — Fri, 10 Mar 2017 11:00:10 +0000

Somewhere between childhood and teendom, many kids have an epiphany. I remember having it myself. They realize that money gets you things — movie tickets, clothes, and ice cream cones. And you don't have to just ask your parents for money. You can get out there and make it.

For my 12-year-old, the epiphany has been very specific. If she had a few hundred dollars, she could get tickets to Hamilton. Lately, every conversation is peppered with information on how her current entrepreneurial efforts are going, and ideas for new businesses. She's a tweentrepreneur, basically.

Tweens are in a sweet spot for running their own businesses, because unlike little kids, they may have developed near-adult competencies in certain areas — like growing a strong social media presence — but unlike older teens and adults, they probably have a lot of free time on their hands. With all these ideas, it's important to use common caution: Don't let tweens go to strangers' homes unaccompanied, or distribute their personal phone numbers, addresses, or email.

Here are some ideas that she (and I) have thought of.

1. Dog Walking

This is one of the first things my tween has ever gotten paid for. It's a good "starter responsibility" because the tween only has to be responsible for the dog for a short amount of time, and because there is a lot of latent demand out there from people who wish their dogs got more exercise but don't want to pay the $35 per walk that some professional dog walkers charge in my area.

My tween got her first dog walking gig when I answered an ad on a local email group from someone looking for a few days of backup for her regular walker. She earned about $20 for an hour of her time two days in a row.

Now that she has a reference, she plans to solicit more customers through the same list and through friends and family.

2. Petsitting

This can be combined with idea above for an overall pet care business. So far, my tween's petsitting jobs have been unsolicited — a neighbor asked her to come to her house to feed and play with their cats while the family was out of town. This is a step up in responsibility, because besides ensuring the animals' welfare, my tween has to be careful to lock the door behind her every time she visits. She has gone the extra mile by emailing photos and a report to the pet owner every time she visits their home. She gets paid $10 a visit.

3. Pet Cleanup

This could be added to a full-service pet care business. Lots of people hate scooping dog poop out of their backyards or cleaning the cat's litter box. Teach your tween precautions to avoid spreading bacteria.

4. Babysitting

The age when kids can start babysitting is not universally agreed upon, but my daughter's Girl Scout handbook suggested 12, and the Red Cross offers a training course for her age, so I felt my mature seventh-grader was ready.

Luckily, we have a neighbor who was looking for help with her twins, and was willing to train my daughter. My daughter spends much of her time in "mother's helper" mode, reading to one twin while the other gets a bath or vice versa, but she is working up to being alone with the kids for short periods of time. It's also lucky that I am able to be nearby, next door, as my daughter gets her babysitting legs under her.

My tween earns $5 an hour for this job. There is a lot of demand in our neighborhood, since more teens are busy with after-school activities than in the past. She could easily build up a large clientele if she wanted to.

Most kids get babysitting jobs through word of mouth, but if your child is 14 or older, you can help them set up a parent-monitored account on Care.com.

5. Making Something to Sell

So far, my kids have only sold handmade items for charity, but the results were eye-popping. A mom who knows how to make jewelry donated a load of earring hooks and baubles, and taught my daughter's Girl Scout troop to make earrings. During the holiday season, they set up a table downtown and sold dozens of pairs of earrings for $10 each, in just a few hours, netting hundreds of dollars for their cause.

Kids can also sell their wares online with parental supervision. Another girl we know hand-sewed blankets and other items, and sold them on Etsy to raise money for charity. If they make a high quality product, they could even get it carried by a local store.

More ideas for products that a tween can competently make at home: slime, soap (with supervision), greeting cards, crafty gifts, tie-dyed items, food products (in states that allow selling things made in home kitchens), bath products, personalized items, and knitted or crocheted items.

6. Mowing the Lawn

This has not been my kid's speed, but it's a time-honored tradition to hire a neighbor kid to mow your lawn, rake your leaves, or shovel your snow. If you can lend them your mower or shovel, it gives them a leg up. Weeding and watering are also tasks that are hard to mess up.

7. Running Errands

Nowadays, many of us are raising children in car-dominated suburbs or cities where we don't feel safe letting kids out of our sight. But if you're like me, lucky enough to live in a small city that is bikeable and walkable, but also has very low crime, your tween should be able to make a few bucks by picking things up at the grocery store for neighbors, returning library books, and the like.

8. Wrapping Gifts

My tween has been charging family members to wrap presents for the past couple of years, and she does a brisk trade. She saves money on materials by keeping fancy bows from gifts she receives. Next year, she plans to open her business to the public. In our town, a local bookstore allowed Girl Scouts to set up a wrapping table, just for tips, during the holiday season. Especially if her business aims to raise money for charity, local stores might allow this for your tween.

9. Performing at or Planning Kids' Birthday Parties

When I was a child, children's author Florence Parry Heide lived in my town. Through the grapevine, my mother heard that the author was looking for someone to dress up as a clown to entertain at her grandchild's birthday party at her lakefront mansion. Since I enjoyed acting, and needed money, I gave it a try. I checked out some books on how to be a party clown from the public library, put together a costume with my grandmother's help, and showed up at the party to do a few dopey magic tricks, act silly, and generally entertain the kids. I got a rave review from Ms. Heide, and ended up performing at a few other parties around town.

My tween, on the other hand, excels at planning party themes and making pretty cakes. She has seriously considered offering to put together theme parties for families who don't want to do the work themselves, but also don't want to spend $300 or more to host a party at an event space or hire a professional party planner.

10. Assisting the Technologically Impaired

For some tweens, using the Internet to do everything from creating a photo book to setting up a new cell phone line comes naturally. If you have technophobe neighbors, your tween could help out with such tasks for a small fee. Teens who are really computer savvy could even charge for on-call tech support.

11. Garage Sale Concessions

This is a favorite with all my kids, including the littler ones. Whenever we have a yard sale, they set up a table and sell cotton candy, lemonade, baked goods, whatever edibles they can come up with. In fact, the kids beg me to hold a sale just so they can do this.

12. Tutoring

If your tween has the patience and is a good student, they could help a younger child with homework after school or offer extra help in a specific subject. Some parents would pay just to have someone read to their young child for half an hour a day.

13. Becoming a YouTuber

Believe it or not, there are children making six figures a month by posting videos on YouTube. From the looks of that channel, the top cooking show on the site, making it probably involves full-time adult help. But it's possible for kids to make videos of playing Minecraft, reviewing, playing with, and even unboxing toys, or something based on their own ideas, with little to no adult help, and make some money.

If your child wants to make YouTube videos, you should do a safety check on each video before it's uploaded. Make sure there are no clues as to your physical residence, and that they don't share their full name, for instance. It's probably also a good idea to turn off the comments.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Get Paid for Paying Early with The Plum Card® from American Express

Kris Majaski — Sat, 11 Feb 2017 02:00:24 +0000

Editor's note: This offer is currently unavailable.

The Plum Card® from American Express is a unique business charge card that offers flexibility and options for the small business owner that isn't offered by other cards on the market. You can earn a 1.5% discount on your purchases when you pay early, or get up to 60 days to pay off your balance with no interest.

How This Card Works

This card is a charge card which means there’s no preset spending limit and your balance usually must be paid in full each month. However, unlike other charge cards, this card includes the option to pay at least the minimum payment (10% of the balance from new activity plus any previously deferred balance) by the payment due date, to defer payment of the remainder of the balance until the new payment due date. This gives you up to 60 days from your statement date to pay your balance, which isn’t an option you get with most other business credit cards. (See also: Should You Get a Business Card or a Consumer Card?)

You also earn a 1.5% Early Pay Discount on the portion of your balance that you pay within 10 days of receiving your bill. You do have to pay at least your minimum payment by your payment due date, but there is no cap on what you can earn back. (See also: Best Credit Cards for Small Businesses)

Terms apply.

Other Benefits

Spend Manager^SM. This card includes Spend Manager^SM which allows you to keep track of your expenses by allowing you to add receipts and notes to your transactions, either via desktop or your mobile device.

Costs

$250 Annual Fee ($0 introductory annual fee your first year)

Considerations

No rewards program. Although you can earn a 1.5% discount on the portion of the balance you pay within 10 days of receiving your bill, there is no rewards program or additional bonuses for purchases. Other business credit cards may offer bonus rewards for office supply, telecommunications, travel, or even advertisement purchases. (See also: Best Credit Cards for Office Supplies)

Charge card limitations. For some business owners, it can be difficult having to pay the entire balance in full each month, even with the special feature this card offers extending it to 60 days. If you rather have the option to carry your balance from month to month for a longer term, you should choose a standard business credit card instead.

Annual fee. After the first year, the annual fee to carry this card can get expensive, especially considering how light it is on the rewards and business benefits. If you aren’t able to pay your balance early each month for the 1.5% discount, you could find this card costly.

Who This Card Is Best For

Although it doesn’t come with some of the features you get with other business cards, this card could still be worth carrying if you can pay your balance in full and pay at least your minimum monthly payment within 10 days of your statement closing date. However, if you need to have the option carry a balance from month to month or prefer a more significant rewards program and lower annual fee, you should consider one of the many other business credit cards that are available.

Terms apply.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Freelance Your Way to More Income and Flexibility

Amanda Gokee — Wed, 01 Feb 2017 10:00:09 +0000

Freelancing is nothing new, but digital technology has made it easier than ever to work as an independent contractor from home — or the road. A 2016 survey by UpWork, a website matching freelancers with companies looking to hire, found that more people are freelancing than ever before, with 35% of the U.S. workforce now made up of freelancers.

Why the growth? Employers like to hire freelancers, especially for temporary or project work, because the arrangement is more flexible, and they save on employee benefits and extra office space. Freelance workers gain by getting to choose the projects they want and working flexible hours. It's a work model that offers greater choice for both parties.

Challenges to Being a Freelancer

While freelancing offers concrete advantages, many people worry about giving up the stability and benefits of a traditional job. Losing company-sponsored health insurance, paid vacations and retirement contributions are indeed valid concerns, especially since it takes time to attract new clients and develop relationships with them.

For this reason, some people do a combination of both types of work, retaining stability with a part- or full-time traditional job, while also following their passions and earning more money through additional freelance projects.

For others, according to the UpWork survey, full-time freelance work actually feels more secure because they have several different clients, rather than relying on one employer for their income.

Another major concern that freelancers share is receiving fair compensation for the work being done, as well as losing out on a reliable pay schedule. Freelancers often have to balance a "feast or famine" phenomenon, when they may either have too much work or not enough.

Still, the UpWork survey showed 79% of freelancers viewed freelance work as better than working in a traditional setting, and half of them even said they wouldn't take back a traditional job, regardless of the compensation that was offered to them.

That's not to say that freelancing is for everyone or for every type of job, but many of those who have decided to pursue this path have found it extremely rewarding.

Greater Freedom and Flexibility

Freedom and flexibility are two of the biggest draws that attract people to work as freelancers, according to UpWork's survey findings. They feel they have more control over their work schedule by being their own boss. Long weekends are no longer reserved for holidays and special occasions.

Many also enjoy the freedom to choose what type of work they want to do and, in many cases, where they do that work. Especially for people who have been commuting long distances or in heavy traffic to get to their workplace, working in a home office can be truly liberating.

Plus, if you're just freelancing on the side, the extra cash may help alleviate stress about saving for retirement, travel or education.

Getting Started as a Freelancer

If you think the freelance lifestyle might be right for you, the first step is to identify a marketable skill you have that you can use to attract potential clients. Some examples include writing, editing, computer programming, business or financial consulting, and photography, just to name a few. Picking a clearly defined skill and, even better, a niche that you want to focus on will help you to cater to your potential clients and make you an attractive candidate. (See also: 11 Freelance Jobs That Pay Surprisingly Well.)

Make a Portfolio

Gather a portfolio to showcase related projects you've worked on. These may be projects from your current full-time job, or from classes you've taken, or pro bono work you've done to gain experience in the field you want to pursue. A portfolio allows potential clients to see examples of your work to decide if they want to work with you. The better portfolio you're able to put together, the easier it will be to find clients.

Depending on what type of freelance work you are going to do, you may want to make a website to showcase your portfolio online. You can also create a portfolio on UpWork, LinkedIn, or specialist websites like Contently and ClearVoice, which focus on content marketing.

Create a Network

Like any job, networking is a very important part of finding freelance gigs. You can do this using social media, but you should also focus on real-life networking opportunities through conferences, professional organizations and Meetup groups. There is nothing that can replace the value of meeting people face-to-face.

Even social gatherings in your everyday life could lead to valuable contacts. Bring up the work that you do in casual conversations and you'll be surprised how many doors may open for you.

Pitch Your Best Ideas

If you have a great idea for a project, now is the time to reach out to potential clients and, in a professional manner, pitch your idea to them. There's an art to writing a great pitch. Especially if you're contacting an editor or CEO you don't know personally, you will need to make as good of an impression as possible over email.

This is the equivalent of cold calling, so you need to have your pitch polished and well thought out. For writing gigs, it's often recommended to provide a specific outline and an article title. Think about the company's needs, and then send them your best ideas, not run-of-the- mill ideas that anyone could have thought of.

Remember, You're Running a Business

Once you've made the leap to freelancing, whether it's full time or as a side gig, remember you are running a business. You'll need to track your business spending (a dedicated business credit card can help with this), as well as organize your billing, taxes and retirement savings. This all takes time that you'll need to work into your schedule. (See also: The 5 Biggest Mistakes Freelancers Make.)

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This article is from Amanda Gokee of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Extra Cash for Your Small Business: Capital One® Spark® Cash Select for Business

Kris Majaski — Wed, 11 May 2016 21:18:26 +0000

Editor's note: This offer is currently unavailable.

If you prefer flat rate rewards programs over rotating categories, the Capital One® Spark® Cash Select for Business is one of simplest and most convenient, no-fee business rewards credit cards available. (See also: 5 Best Credit Cards for Small Businesses)

Why We Like This Card

$200 one-time cash back bonus
1.5% cash back on all purchases

How This Card Works

This card awards a flat rate of 1.5% cash back on all purchases made with the card. You can earn an unlimited amount of cash back, which does not expire for the life of the account.

One-time bonus: Earn a one-time $200 cash bonus after spending $3,000 on purchases within 3 months from account opening. (See also: 5 Best Credit Cards That Offer Bonus Cash for Sign-Up)

You can request your cash back as a statement credit or check in any amount, with no minimum requirements.

Other Benefits

Free employee cards. Add employees to your account, set limits, and track spending at no additional charge. Employee cards also earn unlimited 1.5% cash back on all purchases.

Business tools. Capital One provides tools which can assist in managing and organizing your business expenses such as quarterly and year-end custom itemized reports of your spending and purchase records that you can download into formats such as QuickBooks and Excel.

Visa SavingsEdge. Take advantage of savings and discounts of as much as 15 percent with retailers such as La Quinta Inns & Suites and Stamps.com.

Travel assistance services. These services are available 24 hours a day, every day of the year and are helpful when you are traveling for business and include assistance with services such as ticket replacement, and legal or medical referrals.

Considerations

Low rate of rewards. If the majority of your spending falls into a particular category such as gasoline or office supplies, you can earn more rewards with credit cards that award those purchases. (See also 5 Best Credit Cards for Office Supply Purchases)

Who This Card Is Best For

The Capital One® Spark® Cash Select for Business is best for small business owners whose spending varies and does not fall into any specific category from month to month. This card is also one of the best available for small businesses because it is essentially fee-free and is especially ideal if you frequently travel abroad or need to make international purchases.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Unlimited Cash Rewards for Your Business: Capital One Spark Cash for Business Credit Card Review

Kris Majaski — Mon, 18 Apr 2016 22:24:06 +0000

Editor's note: This offer is currently unavailable.

The Capital One® Spark® Cash for Business offers the opportunity to earn cash back for your business purchases. Here are the features that separate it from other business cards, to help you determine if this card is best for your business. (See also: 5 Best Credit Cards for Small Businesses)

Why We Like This Card

Bonus offer: $500 cash bonus after meeting requirements
2% cash back for all purchases

How This Card Works

This card awards 2% cash back on all purchases made with the card. There is no limit to the amount of cash back you can earn, and your rewards do not expire for the life of the account.

Bonus offer. Earn a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening.

You can redeem your cash back in any amount without any minimum requirements, in the form of a statement credit or check.

Other Benefits

Free employee cards. You can add employee cards to your account, set individual limits, and track spending at no additional cost, which will allow you to earn unlimited 2% cash back on the purchases they make.

Small business tools. Create and download quarterly and year-end summaries of custom, itemized reports, to help manage and organize your finances.

Visa business benefits. This card includes Visa business benefits such as auto rental collision damage waiver, purchase security and extended protection, and travel and emergency assistance services for help with services such as legal or medical referrals or ticket replacement when you are traveling.

Pros

Valuable bonus. The bonus is more than the amount that credit cards usually offer. If you need to make a large business purchase right away, you can essentially receive a discount just for using your credit card. (See also: 5 Best Credit Cards That Offer Bonus Cash for Sign-Up)

No balance transfer fee. If you need to transfer and pay down a balance currently on a credit card with a higher APR, you can do so without paying the fee typically charged by most business credit cards. (See also: 5 Best Credit Cards with No Balance Transfer Fees)

Flat rate rewards. There are no spending categories or quarterly rotating categories to sign-up for or manage. Every purchase made with the card, regardless of the type of purchase, conveniently earns a flat rate cash back.

No foreign transaction fee. If you frequently travel abroad, or you need to make purchases outside of the United States, a foreign transaction fee would cancel out any rewards earned from the card. Not all business cards do not charge a foreign transaction fee. (See also: 5 Credit Cards with No Foreign Transaction Fees)

Cons

Annual fee. Although the annual fee is waived the first year, you should make sure you earn enough rewards each year to help pay for carrying the credit card and still benefit. If you won't use the card enough to cover the annual fee, credit cards without annual fees can be more cost effective choices. (See also: 5 Best Credit Cards with No Annual Fees)

Higher APR. The APR on this card is quite high when compared to many other business credit cards. The APR is less of an issue if you typically pay your balance in full rather than carry balances from month to month. But, if you regularly carry a balance, you should select the card that offers the lowest APR possible, even it means sacrificing a rewards program. (See also: 5 Best Low Interest Rate Credit Cards)

Who This Card Is Best For

The Spark Cash for Business is best if you can spend enough every year to earn the rewards needed to cover your annual fee. This card is also best for consumers who prefer a flat rate rewards program, generally pay balances in full each month, and for those who may need to use the card for foreign transactions.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Easy Business Rewards: Capital One Spark Miles for Business

Kris Majaski — Wed, 13 Apr 2016 23:13:24 +0000

Editor's note: This offer is currently unavailable.

The Capital One® Spark® Miles for Business credit card offers a flat rate for all purchases. This card includes valuable business and travel benefits that can come in handy for any sized business. (See also: 5 Best Credit Cards for Small Businesses)

Why We Like This Card

Double miles on every purchase made with the card
Bonus offer of 50,000 miles after meeting requirements

How This Card Works

This card awards unlimited double miles for every dollar spent with your card on all purchases, and 5X miles on hotel and rental car bookings through Capital One Travel^SM. Miles do not expire for the life of the account.

Bonus offer: Earn a one-time bonus of 50,000 miles equal to $500 in travel once you spend $4,500 on purchases within the first 3 months from account opening.

You can redeem your miles in a couple different ways. For example, you can use Purchase Eraser feature to redeem your miles as credit toward travel purchases such as car rentals, hotels, airlines, taxi cabs, and limo services, made within the last 90 days. You can also redeem miles through the Capital One Rewards Center, for flights, car rentals, or hotel stays. In addition to the travel options, you can redeem miles for cash in the form of a check or account credit and gift cards. Another option is to transfer your miles to 10+ leading travel loyalty programs like JetBlue ™, Air Canada, and Emirates™

Other Benefits

Free employee cards. You can request additional employee cards, set individual spending limits, and allow employees earn 2x miles on all purchases, at no additional cost to you.

Quarterly and year-end summaries. Includes time-saving features designed to help manage your business more efficiently. Create and download custom itemized reports of your spending, which helps in planning, budgeting, and preparing for tax time.

Pros

Bonus offer. The bonus is worth $500 in travel. Plus, the annual fee is waived the first year. (See also: 5 Best Credit Cards That Offer Bonus Cash for Sign-Up)

Double miles without categories. There are no special purchase categories or rotating categories that change every quarter. Instead, you earn a flat rate of two miles for every dollar spent with the card regardless of the type of purchase you make. Flat rate rewards programs are often easier to manage and less of a hassle than wondering each time you use your card if you are making a purchase that earns rewards. Furthermore, this card offers one of the highest flat rates. There are also very few business rewards cards that offer flat rate rewards. (See also: 5 Best Travel Rewards Credit Cards)

No balance transfer fee. If you need to transfer a balance from another card, you can transfer to this card without paying the usual fee of 3%-5%. While this can save you money, it is important that you also consider the APR before transferring to make sure you don’t end up paying more in interest and cancel out the savings from transferring without an additional fee. (See also: 5 Best Credit Cards with No Balance Transfer Fees)

No foreign transaction fee. There is also no foreign transaction fee with this card, which makes it ideal for those who frequently travel abroad and plan on making purchases in foreign countries. (See also: 5 Best Credit Cards with No Foreign Transaction Fees)

Cons

Annual fee of $95. If you don’t plan to make a large purchase within your first three months and miss earning the bonus, you will have to make sure you earn enough rewards throughout the year to help pay for the annual fee beginning after the first waived year. If you can’t guarantee that you’ll be able to cover the annual fee, you should instead consider a card with no annual fee. (See also: 5 Best Credit Cards with No Annual Fees)

Higher APR than other travel cards. The APR is a bit higher than the APR offered with other travel rewards credit cards. However, if you typically pay your balance in full each month, the high APR is less of a concern. (See also: 5 Best Low Interest Rate Credit Cards)

No introductory APR. Although there is no balance transfer fee, you won’t benefit from transferring a balance to this card unless you transfer from a card charging a higher APR. There is also no introductory APR for purchases, which often helps small business owners save money while stocking up on business supplies. (See also: 5 Best Credit Cards with 0% Intro APRs for Balance Transfers)

Who This Card Is Best For

The Capital One Spark Miles for Business Credit Card is best for small business owners whose purchases include travel-related expenses that you can cover with the miles earned. It is also best for those whose purchases might be foreign, and if you prefer a card awarding a decent flat rate on purchases. Although it is important you spend enough each year to cover the annual fee, this card is especially ideal if you have a big purchase planned and can earn the bonus currently being offered.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Helpful Tools to Manage Your Small Business

Qiana Chavaia — Thu, 17 Dec 2015 18:00:08 +0000

It takes great discipline and organization to successfully manage a small business. But if you're able to do so, being your own boss is only one of the perks. A lot of things can get in your way, though: procrastination, learning how to cope with isolation (if you do most of your business alone), accumulating a steady workflow, and learning how to manage finances. And there's also the challenge of maximizing time and being your most productive self.

You will burn yourself out trying to please clients and meet a bunch of deadlines without the proper tools in your arsenal. Try these tools and strategies in order to automate your workflow and increase productivity.

1. Find the Right CRM and Project Management Tools

You need customer relationship management (CRM) and project management software (PMS) systems to successfully manage your freelance jobs. Zoho, Trello, and Asana offer a free solution that comes with a suite of business apps to help you automate your workflow. The apps integrate directly into the product dashboards, making tracking projects and customer satisfaction even easier.

2. If You Sell Products, add an E-Commerce Solution

In today's business environment, doing business without an e-commerce solution is almost impossible, and downright bad for business. Always-connected consumers expect the convenience of being able to make online purchases and mobile payments. Make sure you get a responsive website that adapts across devices with an integrated e-commerce solution.

If your sales volume is low or you don't want the hassle of complicated software, use a readymade solution for professional services and online storefronts, like 3dcart, Shopify, Bigcommerce, and Magento and sync it to your Stripe, Square, or PayPal payment gateway.

3. Offer Customer Support

According to Gartner, a marketing research firm, customers expect real-time 24/7 customer support. Of course it sounds ridiculous to provide around-the-clock customer support when you have a million other things on your plate each day, but unfortunately, that is not something clients should have to recognize if they are to do business with you. Your correspondence must be timely.

Partner with a call center and/or web chat provider and add contact and support ticket forms to your website. ZenDesk is a full customer service solutions provider, including 24/7 customer support, email management, and support tickets. LivePerson offers affordable web chat solutions, as well.

4. Utilize Social Media and Email Marketing

Hootsuite and SproutSocial are two popular SMM systems for automating social media marketing campaigns. They each enable its users the ability to schedule posts and publish across multiple social media platforms. And now, a new feature; social customer service, deepens the automation rabbit hole even further by providing real-time customer support across social pages. The dashboard includes powerful analytics tools for measuring social reach and engagement. Get these same great automation features for your email marketing campaigns with well-known email marketing providers like: Constant Contact, MailChimp, and Campaign Monitor.

5. Take Advantage of Cloud Storage and File Sharing

Small businesses can use file sharing and storage solutions like Dropbox and Google Drive to secure e-signatures on contracts and agreements using the HelloSign (Google Drive) and RightSignature (Dropbox) add-ons. The many app integration options add lots of dynamic features. For instance, Merge by MailChimp is an app that lets you send Google docs as email campaigns and Pixsta by SweetLabs is a discoverable app that loads Instagram content directly onto your device.

6. Master Financial Management

One of the most important processes of running a business is managing finances. Cloud-based accounting and bookkeeping software solutions make it easy. Xero and QuickBooks Online help you streamline invoicing, reporting, and bank reconciliations. You can eliminate the grueling tasks of having to export and email spreadsheets to your accountant by inviting them to have limited access to your account.

These tools should help you feel more confident about increasing your workflow by taking on more projects. The more discipline and control you have, the more successful you (and your company) will be.

Are you a small business owner? What tools do you use? Share with us in the comments below!

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This article is from Qiana Chavaia of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Protect Your Business During a Divorce

Carrie Smith — Tue, 01 Sep 2015 09:02:44 +0000

Getting a divorce can be one of the most emotionally devastating times in your life. Combine this with running your own business and next thing you know, your life has become extremely stressful. I know, because I've been there.

If you're going through the a divorce, here are some important financial steps to take to protect yourself and your business.

1. Get Organized

The first step when dealing with a divorce as a business owner is to get organized and find a lawyer who can help you take the right steps.

Gather all your financial documents, business and bank statements, agreements, and other information that pertains to your business and marriage. Any debts and assets you and the business owns will have to be calculated and divided up. Examine all the bank accounts and documents, as you don't want to be out of the loop in a situation like this.

Depending on the state you live in, and whether or not you signed a prenup, you and your spouse could be forced to split the business profits — and everything else — 50/50. If you and your spouse work in the business together, the operating agreements should outline directions for each spouse to protect themselves during a divorce or other separation.

2. Fill In the Details

What assets or savings did you bring into the relationship? How much do you have personally invested into the business? What are the balances of your personal, joint, and business accounts, investments, credit cards, and loans?

Work with your spouse (or a lawyer if you need help mediating) to fill in all these details. Put the information on paper, or in a spreadsheet, so you're both on the same page. Ask your accountant for all the financial reports, profit and loss statements, and balance sheets for the business, too. Everything needs to be accounted for.

3. Protect Yourself

The next step involves dividing up the assets and agreeing on whether to sell the business, dissolve it, or keep it up and running. If you jointly own a home, the mortgage will have to be refinanced into your or your spouse's name, unless you both agree to sell it.

By the end of the divorce process you want all of your assets divided fairly. Leaving joint accounts after a divorce can lead to credit reporting inaccuracies and even fraud.

Take steps to protect yourself and your business during this process by separating all joint accounts, assets, and debts. Until a property is sold or refinanced into your name, you're still liable for the entire mortgage or rental payment — whether or not your spouse helps split the bill.

4. Keep a Paper Trail

Any conversations you have with your spouse need to be in writing. Save all your emails, notes, and text messages. This is especially important when it comes to figuring out the important details of how you'll handle the business together.

In the event that you and your ex can't discuss things in a calm fashion, you'll need written proof of what each other has agreed upon so you can move forward with the divorce. Keep a paper trail of all the bank accounts you've dissolved, assets you sell, debt settlements, loan refinances, and any other financial paperwork. You may need written proof of these transactions in the future.

5. Start Fresh

Continue protecting yourself as you move forward and rebuild your life. This means opening up new bank accounts in your name only, for both personal and business, and making a plan to get back on track.

Check your credit report using a secure site like annualcreditreport.com, to make sure everything is accurate. If you see any incorrect accounts, numbers, or names, reach out to the top three credit bureaus and get it corrected.

When my divorce was finalized I was left with over $14,000 of consumer debt that we accumulated during our marriage. I had to find a new job and start making a plan to pay it down. Our credit was also conjoined since we had shared accounts, and these took some time to separate. It was rough to say the least.

You don't have to lose your business just because you and your ex aren't on speaking terms. Work with a legal representative you trust and make sure everything's in writing.

Have you ever gone through a divorce as a business owner? What was your experience?

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This article is from Carrie Smith of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: