Avoid Overpaying for Everyday Business Expenses

You’re a small business. You probably don’t have the money-is-no-object budget of big businesses when it comes to every day expenses. In fact, you’re probably trying to pinch pennies while providing your employees the tools they need to do their best work. So how do other business owners save money on—well—everything? Here are a few ideas.

Don’t Hire. Contract!

Gone are the days where you have to bring on a part-time “employee.” Employees need an office and/or equipment, you’re on the hook for a portion of their taxes and insurances, and you have to invest a considerable amount into training.

Instead, hire a contractor or freelancer. They’ll require some training but outside of that, all you pay them is the cost of the job. No taxes, no worker’s comp. insurance—just a fair wage for outstanding work.

But be careful. The IRS has very strict rules when hiring a contractor. For the most part, you can’t have any control over their schedule, you can’t act as their manager, and you shouldn’t provide them with any type of company uniform, among others. If you break the rules, they’re an employee. If you’re not sure, use IRS form SS-8 to figure it out.

Cut the Office Supplies

Nobody is saying not to provide paper for the copier but if you’re still following the old playbook of stocking your closets with binder clips, post-it notes, and boxes of pens, there’s probably not a need. Technology has made offices much more paperless. Those to-do lists that were once kept on post-it notes can now be saved on an app. Filing cabinets have been replaced with Dropbox and Google Drive, and there’s no need to print everything out.

You also don’t need swanky, high-end desks. If you have an IKEA close by, head there and buy desks on the cheap.

Teleconference your Meetings

Is it essential that you’re all in the same room to hold a meeting? How about a teleconference? There are plenty of conferencing platforms on the market and some are pretty expensive but if you only have a few people in the meeting, consider Google Hangouts. For meetings of 10 or less, all your people need is an Internet connection. It’s completely free and easy to use.

If you need a more robust platform, platforms like GoToMeeting will cost $50 per month for up to 100 people but that’s still cheaper than flying people to one location.

Speaking of Technology

First, Internet. Depending on your type of business, you may not need business-class service. If you have a lot of employees or they’re doing high-end computing tasks that actually require a robust service, then business-class speed is a necessity. But if you only have a couple of employees and they’re performing basic computing tasks, you can probably get by with a slower speed at a lower price. Don’t buy more than what you need.

Second, no need to upgrade your equipment every time something new comes out. Purchase every other software update instead of each one unless there are large amounts of security updates. No need to buy the newest iGadget either. On the other hand, don’t be cheap. New features and faster, more efficient hardware could be a cost saver. Buy and update, skip an update, buy an update—that makes for a reasonable upgrade cycle.

Don’t be Too Loyal

In business, loyalty to vendors can be a plus but don’t be too loyal. That insurance agent you play golf with might not have the lowest rate. The vendor you’ve done business with for decades may not be the best deal. At least once per year, compare prices and don’t be afraid to do some haggling. Loyalty means giving your current vendors the opportunity to match prices. It doesn’t mean paying more for the same product.

Stop Paying Finance Charges

There’s no way around it—if you’re paying finance charges, late fees, or bank charges, you are throwing away money unnecessarily. If you’re paying annual fees on a credit card, unused gym membership fees, and strange fees from a vendor, it’s time to cut these out. Every business ends up having a bit of money bleed. Audit your books regularly. Ask questions about every charge, regardless of how small it is, and refuse to pay unnecessary fees. You can’t avoid taxes but fees are negotiable.

RELATED: 9 Ways to Fix Cash Flow Problems

Advertise Online

Advertising takes a lot of time and research to get right. That doesn’t mean you should pay for a mailing and hope it works. Online advertising gives you more control over the audience that will see your ad and you can spend as little as a few dollars each day if you want to. Carefully measure your advertising efforts and use the platform that converts the most people.

Partner with Other Businesses

Businesses are finding creative ways to cut expenses by sharing. Businesses sometimes rent a large office space and move in together. They can then share Internet service, other utilities, and office equipment. Companies like Uber have made “sharing economy” a household term. There’s no reason your business can’t take advantage of it too

Best Mobile Payment Systems for Retailers

The easier you make it for your customers to do business with you, the more likely they are to consider you first when they need something. According to Pew Research, 90% of Americans own a cell phone, 64% own a smartphone, and 57% use it for online banking. Your smartphone is likely more important to you than a wallet or anything else you would carry with you, according to research.

All of those facts illustrate why companies like Apple, Google, and numerous startups are so interested in mobile payments. It has not yet caught on en masse but it’s coming.

A quick search reveals plenty of options. Which should you choose?

Two Types

Using a mobile device to process payments isn’t new. Many companies have offered the technology for years. The “new” technology involves consumers using their phones in place of a credit card. If you’re not ready for the latter, here are some options to accept credit cards using your smartphone.

PayPal Here- A lot of companies have fallen victim to cybercrime. Despite the widespread attempts to infiltrate PayPal’s systems, it hasn’t happened. This is a company that has earned your trust. PayPal requires you to have a PayPal account and a small credit card reader that plugs into your smartphone. Download the app, and you’re in business. No monthly fees and 2.7% per swipe.

Square- Hats off to Square’s marketing team. In large part, when people think of scanning credit cards with smartphones, they think of Square. You’ve probably seen the commercials and know the brand. Like PayPal, simply plug a reader into your phone, download the app, and you’re set to go for only 2.75% per swipe.

Square is even ready for the switch to EMV and NFC technology. In the Fall of 2015, Square will ship its contactless reader.

Intuit GoPayment- If you use QuickBooks, and there’s a good chance that you do, look at Intuit GoPayment. You get the card reader and the app for free and swipe rates are 1.75% plus 25 cents if you pay the $19.95 per month fee or 2.4% plus 25 cents without the monthly fee.

Contactless Options

If you’re just now looking to get into mobile payments, the above options work, but from a technology perspective, they’re old. If you don’t want to get into contactless options, go with Square until the others have an EMV card reading device or take your chances with a third party EMV reader that hooks into a computer or mobile device.

But let’s talk contactless! Customers simply hold their phone or mobile device over a contactless reader and the payment is complete. It’s that fast—and the more tech savvy consumer is already using it and wants to use it more. There are two systems worth talking about.

Apple Pay- Apple knows how to market and it has the money to do it. If you’re even a little techie, or you watch TV, you’ve heard of Apple Pay. A customer loads their card into Apple’s payment app. When they visit a store that accepts Apple Pay, they simply authenticate the payment with their fingerprint, hold their device over the payment terminal and transaction is done. All you have to do is have a payment terminal that is NFC enabled and you have everything you need. NFC enabled terminals are as little as $250.

Signing up for Apple Pay is easy and free. All you do is contact your payment provider and they’ll do the rest. Apple Pay doesn’t charge you anything so whatever you were paying in credit card fees before you’ll pay the same with Apple Pay.

Contactless payment systems are more secure. Apple Pay assigns a unique number to your transaction instead of transmitting your card number—“Tokenization” in geek speak. This number is used only once so even if a cyber thief got the number, there’s nothing they can do with it.

Google Wallet- Google Wallet is Google’s mobile payment system. Enter your cards into the app, and you’re set to accept payments. Google Wallet is more geared towards e-commerce but works just fine with NFC terminals in your brick and mortar location. As soon as Android Pay is available to the masses, it will better compete with Apple Pay—likely being accepted everywhere consumers can use Apple Pay.

Samsung Pay- Samsung recently released its beta version of Samsung Pay, a payment platform to compete with Apple and Google. At the time of this article, it was only available to about 1,000 people in it’s home country of South Korea but early reports are positive

All About Calculate Your Net Worth

Do you know how much you’re worth? Most people don’t but as a business owner, your personal net worth may be important. Although your business is probably legally separate from your personal assets, a bank that considers giving you a business loan will likely ask for personal collateral if your business has little real value. Calculating your net worth gives you an accurate picture of how much of your personal worth you’re pledging to your business.

On a more personal level, having a clear picture of how much you’re worth helps with financial planning. Do you have enough saved for retirement; where is your debt and are there assets that could help you pay it down it down faster? What percentage of your net worth is in liquid investments and is it allocated appropriately? Your net worth is more than a single number—it’s an entire report full of important data.

Terms

Before diving into the calculations, you need to know a few terms:

Asset- Any property with real value. Real estate, a car, and jewelry or art are a few examples.

Illiquid Asset- Something that can’t be converted to cash quickly without a substantial loss. Remember the housing crisis that left people underwater on their homes? Homes became an illiquid asset for many.

Liability- Something you owe—a debt.

Liquid Asset- Something easily sold for profit. Stocks might be the best example.

Personal Property- Something you own that is movable—boats, cars, collectibles, and furniture are examples of personal property.

Real Property- Property permanently attached like a home, a barn, or detached garage.

Gather the Information

Probably the toughest part of calculating your net worth is gathering the information. Some of the information might be an estimate. Unless your real property was appraised recently, you won’t know it’s current value without paying an appraiser. In the case of your home, look up recent sales of similar homes in your neighborhood and use those as a guide for estimating your home’s worth. These are called “comps” or comparables in the real estate business.

If you have jewelry, some jewelry stores have appraisers on staff or they can recommend somebody.

For assets like your car or some collectibles, look at online guides that list their value. If you haven’t dug into the value of a 401(k) from a past employer or the cash value of a life insurance policy, set up online accounts with the firms holding these investments or call and request a current statement.

If you’re going to invest time into calculating your net worth, do the legwork to compile the most accurate data. The more you estimate, the more inaccurate your final calculation will be.

The Calculation

Calculating your net worth is simple once you have the information. It’s simply your assets (what you own) minus your liabilities (what you owe). Add everything you own including:

  • Money in savings or checking accounts
  • Actual cash
  • CDs or treasury bills
  • Annuities, bonds, mutual funds, pensions and other retirement plans, stocks
  • The cash value of any life insurance policies
  • The value of real and personal property
  • Anything else that you own that has sellable value.

Next, add your liabilities

  • Loans—car, mortgage, home equity, second mortgage, boat
  • Credit card debt
  • Medical bills
  • Student loans
  • Personal loans
  • Taxes due
  • Any other debt or outstanding bills

Subtract your total liabilities from your total assets. Now you know your net worth.

What’s Next?

Once you do the work the first time, the calculation is easier the next time around. If you haven’t already, use a free service like Mint.com to keep many of the numbers up to date in one place. Instead of having to compile the value of each of your investment accounts, credit cards, and everything else, you simply open Mint and copy the numbers into your spreadsheet.

In fact, Mint tracks the estimated value of many of your personal and real assets and gives you your net worth based on the information it has. It won’t be perfect but it will be pretty close