Sunday, January 20, 2019

Small Business Growth Strategies: 6 Ways to Grow and Measure Growth

Small businesses, like people, don’t necessarily grow all at once. Just as we use many measures to show a person’s growth—in height, weight, age, and accomplishments—we evaluate business growth using a variety of factors. Similarly, small business growth can be measured with a whole host of metrics.

From external factors, like customer demand and sales trends, to internal measures like financial records, employee headcount, and company culture, there are many ways to measure small business growth. And each of these measurements will provide a unique snapshot of one aspect of your business. Together, these business growth indicators provide a composite view of how your company is doing, and where it’s projected to go.

We’ve compiled a guide to the ins and outs of the six best small business growth indicators to look at. Plus, we’ve thrown in a business growth strategies to help you expedite your small business growth and move the needle on each of these key measurements.

What Is Small Business Growth?

First, the basics: What is small business growth, exactly? Beyond the general concept of expansion, there’s no solid, objective answer to this. Because small business growth is such a broad concept, it’s hard to land on an exact business growth definition. For this very reason, most of the industry will look to numbers to define small business growth. This is why business growth indicators are so important: You’ll only really be able to know whether or not your small business is growing if you look to the concrete numbers.

So, let’s see what numbers define small business growth and some top strategies for improving those numbers.

How to Accurately Estimate Growth

Before you can start measuring your business’s growth as a comprehensive whole, it’s important to determine how you’re measuring your growth. That’s where KPIs, or key performance indicators, come into play—they’re specific, measurable values that indicate how well, or poorly, your business is achieving its goals. By honing in on your business’s KPIs, you can more effectively track each quarter, and chart your progress using consistent metrics.

Your business’s KPIs are dependent upon your company’s specific goals, and you should set several KPIs for all aspects of your business—like sales, marketing, and finances. To give you a clearer picture of what we mean, though, here are some common KPI examples:

  • Monthly signups
  • New accounts created
  • Deals finalized by your sales team
  • Leads generated  
  • New customers per month
  • Debt-to-equity ratio
  • Organic search traffic

Ultimately, your profits and losses alone can’t tell the whole story—keeping track of targets specific to your industry and business helps contextualize your growth.

And don’t base your growth projections on inference alone. If you or someone on your team has accounting experience, this is the perfect time to flex your analyst muscles. Depending on your purposes for evaluating your company’s growth, consulting a professional might be a worthwhile investment. That’s especially true if you’re presenting this information to lenders or potential investors.

business growth

6 Small Business Growth Indicators

Tracking KPIs on a monthly and quarterly basis will help you identify where you’re growing, and any areas that need work, in addition to creating a consistent reporting structure. There are many quantifiable indicators of growth worth evaluating, even though they don’t correlate directly to profit and revenue, like social media engagement, website traffic, and search rankings. The most relevant indicators of growth will vary depending on what kind of business you own, so take the time to assess which factors are the most crucial to your success.

Once you establish your growth priorities and KPIs, you’ll be able to apply these general principles to your business and its growth.

1. Demand

The foundational law of “supply and demand” is foundational for a reason: Your growth potential depends in large part on how much demand there is for your business—whether that’s a service, product, or experience. Assessing your business’s demand is crucial if you’re thinking about expanding your business, or making a hiring plan.

Here are four key indicators of business growth for demand:

Your customer base is loyal—and growing. If you focus on serving your clientele, you know what your customers expect, and can anticipate what they’ll want next. As a result, you’ve cultivated a dedicated, diverse customer base that is loyal to your business, and vocal about their support.

Not quite there yet with your customers? One way to boost customer engagement is to include clients or customers in your business strategy planning. Try creating opportunities for customers to leave comments and feedback. If you have a brick-and-mortar storefront, you can provide feedback opportunities with written comment cards. Create an online survey—you can even just use Google Forms—and add the links to a user survey to your website, and email signature for salespeople and customer service representatives. You can also record sales and service calls, and provide a voluntary short survey at the end of calls.

Inventory is turning over rapidly. If you literally can’t keep your shelves stocked, it might be time to expand your business—one of the most demonstrable ways to measure your growth is by looking at turnover rate for inventory.

The team is busy. Not selling goods or holding inventory? For demand growth indicators in the service industry, look at how full your bookings are, how busy your salespeople and account managers are, and how much people are working overtime.

You’re attracting outside attention. Whether it’s an investor showing interest, or an enthusiastic customer base begging you to expand your business, listen to the feedback you get from clients, friends, and advisors as an indicator of your popularity.

2. Profit and Losses

“Profit” is your net income after essential expenses, like payroll, equipment, and inventory; and “losses” are the costs that exceed revenue. Obviously, a healthy business needs to have more profits than losses—a business with less of the former and more of the latter runs the risk of untenable debt and, potentially, bankruptcy. To determine your business’s profits and losses, you’ll need to collect a few crucial financial records, including income statements, a cash flow statement, and a balance sheet.

Then, check your margins. Your profit margin is the percent of revenue left over after costs and expenses. The calculation is relatively straightforward, once you collect your income and expenses data. To some extent, the best way to determine a good profit margin for your business is dependent on industry, so your profit margin value is relative to the average for businesses in your location and sector.

3. Revenue

When you’re looking for indicators of business growth, calculating your annual revenue growth rate is a good next step once you’ve analyzed your profit and losses. If you’ve been in business for fewer than three years, or are a venture-backed company that hasn’t become profitable yet, cash might be tight or business might vary month to month. Revenue can help indicate growth, even if your profits aren’t increasing right now.

That said, if your revenue is high or steadily increasing, yet profits are stagnant, you can use this opportunity to analyze where you can lower operating costs or losses to bridge the gap.

If your revenue indicates healthy year-over-year growth, but profits aren’t budging, zero in on your expenditure to see if there are any costs you can eliminate to free up more cash to put back in your business.

4. Sales

Revenue and profit usually get all the attention for indicators of business growth, but if you’re tracking success, it’s essential to also evaluate the sales that are driving your revenue.

Your sales team is the frontline of your business, and you have insights into the trends and changes from month to month that will impact revenue. So, it’s worth aligning your company’s KPIs with sales goals. Especially for small business owners hoping to increase sales, it’s important to consistently report on sales performance.

When a sales team has more leads than they can call, or are working exclusively on inbound leads, there’s a good chance the wider market is expanding—and with it, the potential for your business. And if your team is closing more deals than your product and account managers can handle, that might indicate growth potential for your business specifically. Just beware of churn due to over-selling.

With few exceptions, successful revenue models rely on sales—whether it’s subscriptions, services, or products—so booming sale can indicate it’s time to expand in order to accommodate new customers or accounts.  

5. Workforce and Network Health

From headcount, to hiring patterns, to vendor relations, your employees and partners determine a large part of your success as a manager and owner. Yes, creating jobs can drain cash, especially if you’re in the early stages of your company. But a growing team indicates that your business demand is high enough to justify adding roles.

It’s a good sign if you’re hiring because you have to. An uptick in hiring is a great indicator of growth, particularly for small businesses, because there is typically limited cash on hand, which restricts hiring flexibility. And often before you start to see major profit increases, you’ll have to start hiring out of necessity—as in, account managers are maxed out, salespeople have more leads than they can keep track of, or you’re filling multiple roles yourself.

Also, excluding issues of productivity or mismatched roles, sometimes the best way to boost your business’s growth is to invest in a much-needed hire. Talk to your team about their bandwidth and needs. Their input can help you identify which aspects of your business are the most in need of extra hands.

People want to work for you. An engaged, active workforce will drive productivity and create a great culture. Dedicated employees who get your mission and share your values can help take you to the next level of success.

6. Market Share

Depending on your industry and geographical location, your portion of the local market could be an additional key indicator of how much your company has grown, and how much growth potential there is in the existing market.

Observe peer companies of a similar size, or better yet, direct competitors. If it’s relevant, check your competitors’ recent updates, keeping an eye out for new locations, products, or partner integrations—try checking a company’s blog if you need somewhere to start.

A healthy competitive market will actually help your business grow, so you want to see activity in the space outside of your own business. In the case of small businesses, this indicates demand in the market for the good or service you provide.

Next, try to figure out how big the potential market is, and whether or not that base of potential customers is growing. For many industries, you can find independent reports from analytics companies like Gartner, as well as free market research guides and resources. If you have more business than you can accommodate, too many sales leads to handle, and competitors in your space, there is a good chance the market for your business is strong—and growing.

business growth

6 Small Business Growth Strategies to Move the Needle

Knowing how to measure small business growth is really only half the equation for success. Now that you’re familiar with six of the very best indicators of small business growth, it’s time to start thinking about how exactly you’re going to ramp up these indicators.

Here are six business growth strategies—one to move the needle for each key business growth indicator we highlight above:

  1. Increase demand through strategic partnerships. Strategic partnerships can really be anything your business needs them to be, from something as minor as another company mentioning yours in a blog post, to something as major as offer an integrated product. Strategic partnerships will open up your small business to your partner’s audience.
  2. Improve your profit by removing unprofitable products and services. Run an analysis of the costs and revenues of each individual product or service your small business offers. If a given product or service isn’t turning a profit, then it’s time to seriously reconsider: You’ll want to either diminish the costs involved in providing this product or service or even stop offering it altogether.
  3. Rev up revenue by improving your conversion rate. Only a portion of the audience that your small business gets in front of every day ends up converting. So, a crucial part of small business growth in revenue is improving your business’s conversion rate. To improve your business’s conversion rate, take to your business website, as it will be the easiest place to measure this stat. Turn to tried-and-true tactics like performing A/B tests and setting up clear, concise call-to-action buttons.
  4. Increase sales by creating a sales funnel. To grow your business’s sales, we suggest you set up a codified sales funnel. Delineating the steps that each customer has to take before buying your product or service can help you identify drop off and success. With this insight, you’ll be able to see and improve the stages at which most costumers decide not to convert.
  5. Fortify your workforce with new recruiting tactics. If you’re eager to measure your small business growth based on your number of employees, then it’s time to start getting creative with how you approach recruiting. To ramp up your business’s workforce, you need to harness creative ways to find employees beyond sharing the job descriptions on LinkedIn. Always carry your business card with you, and don’t be afraid to recruit at any given moment.
  6. Shore up market share with a customer relationship management system. Market share is far from static. And if you’re going to use this stat to measure your small business growth, then you need to make sure you’re maintaining the customer base you already have, even as you grow. Setting up CRM systems will help ensure your hold on your market share, even as you expand beyond your core customer base.

Small Business Growth: The Big Picture

A comprehensive assessment of your business, from day-to-day operations to annual revenue, should indicate to you how much your business is growing over time, and help you identify patterns in demand and spending. Demand, profit and revenue, and headcount might indicate growth from a numerical perspective, but true growth is largely a self-fulfilling prophecy. If demand indicates that your customer base is growing, for instance, act accordingly: Put your effort behind cultivating and expanding that following, and making necessary expansions and hires to support that base.

And whatever your financial statements are telling you, try to capitalize on what’s going well, be it quality products or services, a great sales team, or simply an excellent operation—while working on areas that could use improvement. Because one of the most powerful uses of growth analysis is to identify what’s holding you back. Unsuccessful services or products, inefficient spending, or making the wrong hires can be hard to identify in the moment. These factors are all easier to pinpoint when taken into consideration with financial data and your company KPIs.

In short, if you see indicators of business growth, act quickly capitalize on that growth. Look into small business financing to seize opportunities if they present yourself. At the same time, be sure to remove inhibiting factors, like bad hires and unnecessary spending, from its path. Once you’ve done your homework, and developed an idea of how your business is changing and growing, you can draw from countless free tools to help grow your small business.

Keep in mind, growth is also a risk. It’s tempting to see all growth as good growth—and you should celebrate these wins—but, above all, it’s important to stay focused on delivering quality and operating efficiently.

The post Small Business Growth Strategies: 6 Ways to Grow and Measure Growth appeared first on Fundera Ledger.

from Fundera Ledger

Debt Refinancing 101: Graduating to Better Loans

Having access to easy capital is remarkably enticing. With so many online lenders offering quick business loans, taking on expensive debt with frequent payments is almost too easy—especially considering just how difficult it is to keep up with the daily payments attached to most short-term business debt. Luckily, there’s a remarkably feasible solution to getting out of this common financial hole—debt refinancing.

We’ll walk you through what it is, why you might need it, and how it works. We’ve seen so many debt refinancing success stories, some of which involve small business owners saving thousands of dollars a month. As such, we’ve compiled a guide to all things debt refinancing to let you in on one of the most powerful money-saving tactics a business owner can have in their toolbox. 

Debt Refinancing Definition

Debt refinancing is defined as the act of using the proceeds of one loan to pay off pre-existing debt.

Although it might sound a bit intimidating (or confusing) to use one loan to pay for another, there’s one important thing to understand:

When you refinance your first loan with a second one, that newer loan is better in some way—it should offer lower rates, extra capital, less frequent payments, and or some combination of the three.

Whether you’re refinancing your debt in a big way or just taking a small step up, this is a smart and efficient strategy for small business owners to get capital and grow their companies.

Why Refinance to Pay Off Pre-Existing Debt?

There are plenty of reasons to refinance your existing debt, but let’s take a look at the three most prominent ones.

1. Debt Refinancing Can Offer Lower Rates

Taking out a second loan to pay off your first one might make sense if, say, that second loan comes with a lower interest rate.

All of a sudden, debt refinancing can make your business debt more affordable.

We’ll talk more about this later on, but depending on when you’re able to refinance that loan, you could be paying substantially less interest on the principal—which is the amount you borrowed from a lender.

In other words, debt refinancing can lower your overall rate. You’re borrowing for less.

And there are especially expensive loan products—like merchant cash advances—that are great choices to refinance into more affordable kinds of debt. The option to refinance gives you the chance to limit the damage that pricey short-term borrowing can do to your bank account or cash flow.

2. Debt Refinancing Can Offer Longer Terms

Another reason to take out a business debt consolidation loan is if that second loan comes with a longer term.

In other words, you’ll have more time to pay off the money you borrowed (plus interest).

You might look for a longer term because your current loan’s payments are cutting into your cash flow, you want to lower each payment amount, or you want less frequent payments—like weekly or monthly instead of daily payments.

Regardless of the exact benefit you’d want, a longer loan term is one reason why plenty of business owners search for debt refinancing.

3. Debt Refinancing Can Offer More Money

This one is pretty straightforward: That second loan comes with a bigger pile of cash you can use to grow your business.

By refinancing your debt with a larger loan amount, you can invest more capital into your business without taking out multiple loans at once or waiting to finish paying off your first round of funding.

Of course, a portion of that second loan will go toward paying off your first loan, but so long as what’s left over is more money than you would’ve had otherwise, refinancing makes perfect sense.

debt refinancing

More often than not, you would refinance because of some combination of these reasons—maybe even all three.

Now that you understand why you might want to refinance your debt, let’s take a look at the different kinds of business loan debt refinancing, and how each can make a big impact on the success of your business.

Refinancing Debt in 3 Different Ways

Do any of the above reasons to refinance debt sound like they could be useful for your small business?

If so, now is a good time to figure out which kind of debt refinancing you should start looking into.

Here are the three main types of refinancing out there.

1. Incremental Refinancing

This is a common—but useful and important—way to use debt refinancing.

Let’s say your business’s details and financials haven’t changed too much since you took out your last loan. Maybe it’s been a few months and you’ve put that extra capital to good use, growing your inventory a little or launching a new marketing campaign.

In other words, it’s been business as usual, but you were still able to snag a better deal on a business loan when you applied for debt refinancing.

Whether in terms of more favorable rates, longer terms, or more capital, the refinancing loan you can qualify for is somehow a step up from your current debt.

This might not be a groundbreaking change—maybe you’re moving from $40,000 to $60,000 in financing, for example, or from a loan term of 18 to 24 months—but you’re still expanding your possibilities for growth, building credit, and keeping the financing cycle going.

This kind of refinancing isn’t for everyone, and if you don’t need a second loan then you shouldn’t take one out.

But if you’re looking to continue your business growth, refinancing your current debt with a better loan will help.

Refinancing Short-Term Debt With Short-Term Debt Can Get Expensive

There is a potential danger with this sort of refinancing that you should be aware of, though.

If you choose to refinance short-term debt with other short-term debt—even if it’s a bit more affordable—then you risk getting “stuck” in a cycle that can be hard to climb out of.

When you refinance one short-term loan with another, you’re paying a good deal of interest on interest. Sometimes that’s a necessary evil if you’re getting much better financing, but it’s not necessarily the most cost-effective option.

In short, if you’re considering refinancing current debt with a similar form of debt, make sure the benefits are truly worth the costs.

2. “Graduation” Debt Refinancing

On the other hand, maybe your business hit a certain milestone since your last business loan.

If that’s the case, you might very well qualify for a whole new set of better loan options for debt refinancing. 

These larger and more affordable loans, with longer terms and less frequent repayments, can change the way your business operates—in a big way.

You can save money, breathe easier with a more flexible cash flow, worry less about more manageable payments, and use that extra cash to substantially develop your business.

Here are just a few standard milestones that could indicate your business might qualify for better financing:

  • Reaching the 5 years in business mark. 50% of newly created businesses fail within their first five years, so making it to five years proves to lenders that your business model is pretty sustainable. The more confident lenders are in your business, the better their loan offers will be.
  • Making 6 figures in annual revenue. The more money your business takes in, the more lenders will expect it to continue taking in. From a lender’s point of view, a proven successful business is a better investment.
  • Hitting a 700 personal credit score. Your personal credit score is very closely tied to both what loans you qualify for and how much they cost, and getting a 700 credit score or above could make a huge difference in the financing available to your business.  

Been in business for long enough? Medium-term lenders might all of a sudden seem more interested in your loan application. Or you finally got that higher credit score? Now you might qualify for a long-term, low-cost loan from the Small Business Administration.

You should note that these aren’t hard-and-fast rules—hitting one of these benchmarks won’t necessarily qualify you for a better loan, but they are common guidelines that a lot of lenders tend to follow.

So if you’re able to, graduating from one loan into a substantially better product can make a big difference to your business.

Just imagine refinancing your relatively small and expensive short-term loan with a bigger, more affordable medium-term loan—and then refinancing that into a long-term, single-digit interest rate SBA loan.

By making some smart choices and thinking seriously about your business financing, you’ve potentially moved from an 18-month loan of $40,000 with daily payments and 20% APR to a 10-year loan of $120,000 with monthly payments and 6% APR.

Of course, that’s just an example—but we’ve seen it happen plenty of times.

Debt refinancing is an incredibly powerful tool that all small business owners have at their disposal. It requires some planning ahead and thoughtful financial management, but that extra work is worth the potential benefits to your small business’s growth.

3. Debt Consolidation

Debt refinancing and debt consolidation are often used interchangeably, but that’s not quite correct.

Instead, debt consolidation is a kind of debt refinancing.

Debt consolidation loans help you take out one loan to pay off multiple smaller loans (as opposed to one smaller loan, as with the above examples).

For example, say you’ve taken out several small loans over the course of a year to pay for an expense here, to cover an accident there but those payments add up.

With debt consolidation, you can roll up all those different daily payments into a larger weekly payment.

In terms of how it can help your business, debt consolidation brings all the same advantages of normal debt financing: you’ll save money, get more capital, have longer to pay off your debt, and be able to spend more flexibly.

Plus, you get to establish a more regular payment schedule and bring together your various sources of business credit. You can worry less about forgetting to make a payment and hurting your credit score, too.

One Debt Refinancing Caveat: Prepayment Penalties

When you’re refinancing debt, you’re essentially paying it all off early—with the proceeds of another loan.

That’s all well and good, but some lenders actually attach prepayment penalties to their loans—and these should be a factor in your decision whether or not to refinance.

What Is a Prepayment Penalty?

As you might be able to guess, a prepayment penalty is when you’re penalized for paying a loan off before its term ends.

This might sound counterintuitive—why would a lender want to wait if you have their money now?

Well, what actually happens when you pay off early is that your lender loses out on some interest they expected to receive. They’re not making as much money as they thought, in other words.

Some lenders will charge extra for prepayment in order to make up some of that lost capital. Others offer prepayment “incentives” where they’ll forgive a portion of your interest when you pay early—but only a portion.

Either way, debt refinancing will trigger that prepayment penalty, so watch out. Make sure you’re aware of whether your loan has a prepayment penalty—and how much it is—before you refinance.  

Accounting for Your Prepayment Penalty Before Refinancing Debt

Since your current loan’s prepayment penalty will come into effect when you refinance, you’ll have to carefully consider the costs of debt refinancing.

It’s not necessarily a tough calculation:

Is what you’ll save by debt refinancing into a better loan greater than what you’ll spend by paying that prepayment penalty?

If so, debt refinancing might be worth your while.

If not, you might be better off sticking to your loan’s agreed-upon term and taking out a second loan afterwards.

Make sure to consider the differences in loan terms and amounts as well, though. Debt refinancing might cost more, but having extra capital for longer could be an important factor in your decision.

debt refinancing

3 Debt Refinancing Success Stories

Here at Fundera, we’ve seen a number of incredible success stories with debt refinancing—especially when it comes to graduating small business owners from expensive short-term financing to bigger and better loans.

Let’s take a look at a few examples of entrepreneurs who saved thousands or dug themselves out of dangerous short-term debt with refinancing.

This Veteran Saved $3,000 a Month by Refinancing His Debt

Brian Williams is the owner of Under Control Technologies, a business that helps install audio/visual equipment like television, internet, heating, and air conditioning in homes.

Looking to grow, Brian took out a loan with a short-term lender—but was soon stuck in a cycle of expensive debt. High daily payments were slowing down his cash flow, but even though he had a stellar credit score and strong revenue, banks wouldn’t give him a cent.

“I was paying $200-and-something a day, five days a week. It totaled over $5,000 a month. My cash flow was sucked dry,” Brian said.

Refinancing would prove to be his answer.

Brian qualified for financing from a medium-term online lender offering two- to five-year loans. Suddenly, he was spending less on financing in a month than he had been paying weekly.

And soon after, Brian qualified for an even larger and more affordable SBA loan—getting even more money at the same rate.

This was Brian’s path of debt refinancing:

  • Short-term loan: $5,000 per month for $55,000
  • Medium-term loan: $1,700 per month for $57,000 over 4 years
  • SBA loan: $1,700 per month for $150,000 over 10 years

He saved over $3,000 per month—while tripling his loan amount and stretching the length of his loan by more than 5 times.

This Business Owner Saved $15,000 a Month With Debt Refinancing

Brian’s story is great—but not the only one of its kind.

Emilie Christenson, owner of umbrella company Carlie Devon, is another example of a business owner who escaped short-term debt and climbed the ladder all the way up to an SBA loan, saving money and opening up her business to tons of new opportunities.

In order to escape a cycle of short-term debt, Emilie also looked to refinancing.

Since her business had strong revenues and good credit, she qualified for an SBA loan right away.

However, that would take a long time to apply for and receive funds from. SBA loans are slower, more effort-intensive applications. And Emilie had an upcoming inventory purchase to make.

Instead, she opted for a medium-term loan first, then refinanced that funding with an SBA loan soon after. By taking advantage of her strong financials, Emilie was able to save money and get financing when she needed it.

All told, Emilie wound up saving $15,000 a month for her small business through refinancing.  

This Entrepreneur Escaped a Shady Broker With Debt Refinancing

Serial entrepreneur Kevin Krabill was stuck in a bad bind.

Because of the recession, he was forced to take back some of his franchised restaurants from its current owners… While also pursuing his next business idea. In order to deal with this burden, Kevin took out a short-term loan to tide his businesses over.

He looked to refinance that debt out—but even though his financials were strong, he was rejected by a medium-term lender.

What happened?

Kevin suspected that his small business loan broker had actually sabotaged the refinancing deal, because a more affordable business loan would cut into the broker’s own profits.

And he was right.

In fact, his broker forged Kevin’s signature on a false loan application. But when Kevin found out, he worked around the broker and proved that his business would benefit from refinancing.

In the end, Kevin refinanced his debt—and saved his cash flow.

The moral of the story?

Even when you’re looking for refinancing, be careful who you work with. Loan sharks and shady brokers rarely care about your needs—and refinancing debt isn’t usually in their best interest, even though it might be in yours.

Debt Refinancing: Some Final Thoughts

Taking out a loan to refinance the debt you have can be a serious game-changer for your small business.

Whether you’re making incremental improvements or reaching for the stars, graduating into a significantly better kind of loan, refinancing can give you more time to access more capital at a more affordable rate.

That’s a lot more—for a lot less.

Here’s the bottom line:

Refinancing doesn’t always make sense for every business…

But it’s a powerful option for small businesses looking to grow in a big way.

So think carefully about your debt situation, your business’s needs, and how your financials have changed since your last loan. Debt refinancing might be just what you need.

The post Debt Refinancing 101: Graduating to Better Loans appeared first on Fundera Ledger.

from Fundera Ledger

Should Your Restaurant Offer Online Ordering? 4 Things to Consider

Dining today is all about creating an experience. From the moment a customer walks into your doors, to picking up a menu, to paying the bill, it’s all about how you make them feel. In the age of the internet, that experience extends beyond the walls of your restaurant.

For new restaurants, it can be difficult to balance offering an elevated experience while managing your bottom line. Rounding out your exceptional customer experience with an online ordering solution is a natural next step for a small business that’s interested in reaching customers outside of its brick-and-mortar location, but while keeping finances in check.

We broke down the state of restaurant online ordering and what you should do if you want to start offering pick up and delivery to your loyal customers in 2019.

Online Ordering Trends You Should Know About

Mobile-friendly everything is on the rise.

According to the Marketwatch, 50% of emails are opened on mobile devices, making a mobile-optimized website and mobile-friendly marketing strategy increasingly important. With today’s consumers spending more time on their smartphones, online ordering makes takeout and delivery more convenient. Restaurants with online ordering are catering to a generation of consumers that are not used to waiting.

Restaurant analytics are the key to success.

Nearly 60% of consumers have ordered food online in the last six months, which means if you’re not offering it, you’re missing out. Just because your online diners aren’t in your restaurant doesn’t mean you don’t have a chance to market to them and keep them coming back. Gathering customer insights into how your online users behave can prove valuable and help grow your restaurant.

Phone call ordering is a thing of the past.

A Fortune restaurant technology survey found that now more people order their food via an app on their smartphone or tablet than through a phone call. To cater to these customers, it’s essential that your website, and restaurant, have the tools and technology in place to meet a growing demand.

restaurant online ordering

4 Things to Consider Before Offering Online Ordering

Expect an Increase in Volume

Once you begin to offer online ordering, you should be prepared to handle an uptick in orders. In a best-case scenario, you will see an increase in business and a busier front-of-house staff and back-of-house staff.  this has the potential to create new jobs in your community as your restaurant grows, it’s also essential that you prepare ahead of time so you’re not disappointing customers.

Test Your Current website

Is your website mobile-friendly? Open up your cell phone’s internet browser and take a look at how your website responds on your device. Is it easy to find your menu and other important information about your business? A mobile-optimized website (or a mobile app) that’s ready take online orders is a smart investment in a fast-growing market.

Start Small

If you’re not ready to jump into the world of delivery, take a small step into online ordering by offering a takeout option for customers. This allows your customers to order food without ever picking up a phone, but doesn’t require you to hire delivery staff.

Integrate Your Online Ordering

Online ordering platforms that operate alongside your existing systems can create unnecessary headaches for managers, servers, and chefs. By integrating your online ordering with your current restaurant management system, your online orders will arrive in your existing point of sale, ready to be fired to the kitchen just like an order from a table or the bar.

restaurant online ordering

How Online Ordering Helped a Ramen Restaurant Thrive

When Kenn Pluard, owner of Kenji’s Ramen in Vancouver, Washington, became aware of just how high the demand was for online ordering, he knew one thing: He didn’t want to pay upward of 35% in commission and lose revenue for his ramen shop. Instead, Kenn turned to an owned online ordering solution that integrated with his point of sale system, and used a third-party service for deliveries.

Within just a couple months, Kenji’s saw online orders climb to 10% of their monthly revenue.

In addition to a boost in revenue, Kenn immediately noticed efficiency in his staff’s time by having an integrated solution. Instead of manually entering when an online order is placed, it drops into the POS that his team works on every day.

There’s no transcribing orders from fax, email or a separate tablet into the point of sale for Kenn and his team. “Five minutes saved that we don’t have to take an order by phone, plus five minutes we don’t have to spend taking payment when the customer comes in to pick up. With 10 orders/day, that’s over an hour saved per employee per day. It really adds up.”

The post Should Your Restaurant Offer Online Ordering? 4 Things to Consider appeared first on Fundera Ledger.

from Fundera Ledger

How to Start an Import/Export Business in 6 Crucial Steps

What Is an Import/Export Business?

For nearly as long as there’s been people, there’s been trade. In the long history of humanity, when we aren’t at war, we’ve been interested in buying and selling various goods from each other. Imports and exports are how the potato came to Ireland, and in a more modern sense it’s how we’re able to buy food, drinks, furniture, clothes, and nearly everything else, from all around the world today.

There’s a very simple but important distinction that trips up high school students and functioning adults alike: The difference between imports and exports. Imports are any good or service brought in from one country to another, while exports are goods and services produced in the home country for sale to other markets. Thus, whether you’re importing or exporting a product (or both) depends on your orientation to the transaction.

The modern system of international trade is a complex web of import/export businesses that handle the sale, distribution, and delivery of goods from one nation to another. There is more than one type of import/export business. You could focus just on importing or just on exporting. You could be a manufacturer’s representative, specializing in a certain industry, or you could be an import/export merchant or agent, which is more of a freelance broker.

Starting an Import/Export Business

If you’re interested in starting an import/export business, there are a ton of considerations you need to make. Indeed, this is true for starting a business in any industry. For an import/export business, specifically, it’s helpful to have a background in business, international relations, or global finance. This should give you an understanding of the myriad hoops one must jump through to sell or buy a product from an overseas supplier.

“The compliances make it so complex that even if you did know how to do it, you’re still going to have to keep in mind a lot of random considerations,” says Selena Cuffe, co-founder of Heritage Link Brands, a company that imports, exports, and produces wine, and other high-end products like tea and honey.

Cuffe worked for years in brand management for Procter & Gamble, among other trade-related positions, before starting her company in 2005. She was inspired after going to South Africa, where she attended the first Soweto Wine Festival.

“At that festival were literally the first black winemakers and vineyard owners post-apartheid, showcasing their products for the first time to the world,” says Cuffe. “It was serendipity and enlightenment when I had my first glass. That’s how I got into the wine business—when I found there was no distribution into the U.S. market, and they were barely distributing in their own country.” 

Heritage Link Brands now operates within the wine industry in different ways: It imports wine from South Africa into the U.S. wine market, and it exports grapes from its own South African vineyard to the U.S. as well as the Philippines and Hong Kong. It also exports wine to airlines for use on international flights

But in order to understand exactly how Heritage Link Brands does business, it’s important to start from the beginning. Here are the steps you need to take to start an import/export business. 

how to start an import export business

1. Get Your Business Basics in Order

Anyone starting a business in the 21st century needs to cover certain bases, like creating a website as well as social media channels like Facebook, Twitter, and a host of others.

So here’s your first step: Get the basics in order. This means registering your business with the state in which your headquarters will be located, registering a domain name, getting any business licenses you need to legally operate, and so on.

You’ll need a business plan, too. Part of that business plan needs to cover how to handle the rules and regulations of the markets you want to work in. For example, to bring alcohol and tobacco products into the U.S., you need an Alcohol and Tobacco Trade and Tax Bureau permit, which is free but can take months to acquire. Similar research needs to be done when doing business with other countries, taking into account everything from various legal back label requirements in each nation to insurance.

Perhaps most importantly, you need access to capital. Startup costs can vary greatly depending on the type of imports/exports business you start. Everyone knows it takes money to make money, so it’s helpful to have capital on hand when you’re getting started.

“The first thing I recommend for anyone is to have your capital upfront,” says Cuffe. “That’s so you can protect your business from not only a legal standpoint but also the equity of the brand that you create and to make sure you invest in the quality of whatever you launch. Test a market, or test a city, then a state, then a region. Then I think that there are greater chances for success and sustainability long term.”

The ratio that Cuffe cited for success in the wine industry—”In order to make $1 million, you need to invest $7 million”—demonstrates the kind of capital needed to start a business comfortably (if one can ever be “comfortable” as an entrepreneur) and be prepared for whatever occurs, from issues with sourcing to changes in trade regulations.

2. Pick a Product to Import or Export 

The next step in starting an import/export business is to find a product or industry you are passionate about and that you think could sell in international markets.

For Cuffe, that product turned out to be wine. She felt a connection to the product not just from a quality and taste standpoint but from a social justice standpoint as well.

“When I first entered the industry in 2005, there was just one black winemaker and five black-owned brands,” she says. “Today there are 17 black winemakers and 31 black-owned brands.” 

Though the South African wine industry still deals with injustices like poor working conditions and unequal access to capital, Cuffe says things have improved since the previous decade thanks to the increased sales and notoriety of South African wines worldwide.

“The biggest thing that we’ve enabled is the financing of black businesses. When we first got started, in order for even these brands to create their own wine, they had to source it from existing white wineries, because they didn’t own any land,” Cuffe says.

Once you find your product, you also need to identify the right market for it. After all, you need someone to sell it to! This is where your trend-spotting skills come into play. The best products for an import/export business are products that are just starting to become popular, or show some promise to being so in the future. 

You can conduct research with resources like GlobalEDGE’s Market Potential Index or by checking with local government officials and websites, such as the Department of Commerce International Trade Administration’s Data and Analysis. You can also find reports on the state of the imports/exports industry with the Census Bureau Foreign Trade

From there, it’s best to start “slow and steady.”

“Test your ideas,” says Cuffe. “Don’t assume that what you think will sell because you love it will catch fire in the market. What catches fire in the market is more than just the way it tastes—it’s who you know, and the packaging and serendipity of timing, and all of the indirect soft stuff that makes the difference.”

3. Source Your Suppliers

Once you have a product you’d like to trade internationally, you need to find a local manufacturer or other producer that makes your product and can lead to a strong partnership. A good relationship with a supplier is crucial to long-running success in an imports/exports business.

Generally, you can find suppliers through companies like Alibaba, Global Sources, and Thomas Register. You will need to convince the supplier of the benefits of entering the U.S. market (or another market you wish to sell to), and figure out the logistics of taking their product from their local warehouse or production facility to another one, potentially on the other side of the globe.

You might also be your own supplier—in some cases, as Cuffe occasionally is for herself.

“We own an interest in a vineyard in South Africa called Silkbush,” she says. “My orientation when I do business to them is, 80% of the grapes that we pick we send off to domestic wineries who use our grapes to produce their own proprietary high-end wine. The remaining 20% is used to create our proprietary label Silkbush, which we export to foreign markets.”

4. Price Your Product

You know what product you want to work with and you’ve identified your target market. Next up, figuring out how much to charge.

Typically, the business model on an imports/exports business includes two key understandings: The volume of units sold, and the commission made on that volume.

Be sure to price your product such that your markup on the product (what ends up being your commission) doesn’t exceed what a customer is willing to pay. But you don’t want to make it too low such that you aren’t ever going to make a profit.

In the imports/exports industry, importers and exporters typically take 10% to 15% markup above what the manufacturer charges you when you buy the raw product.

5. Find Your Customers

Next up on how to start an imports/exports business? Finding customers to sell to.

Deciding on a market is not the same as finding your customers. You can’t just send your products to the Port of New York and start selling your wares on the docks to whoever walks by. You usually need to find distributors and clients who will take on your product and sell to others.

If you have a quality website that includes digital marketing campaigns, your customers may end up finding you. But to get started, Cuffe suggests doing things the old-fashioned way—by cold-calling. Check with any local contacts you have in the area, contact the area’s Chamber of Commerce, trade consulates, embassies, and so on. These entities might be able to give you a local contact list that could be vital help in starting a imports/exports business. 

“I cold-called the local Cambridge, Massachusetts, Whole Foods store, and they gave me a chance. And now we do display programs and regional programs with Whole Foods,” says Cuffe. “A lot of what I did in the beginning and even today involves cold calls.”

6. Get the Logistics Down

Perhaps the most complex aspect of importing and exporting is the logistics of taking a product created somewhere and selling it somewhere else. How does the product make the trip from the vineyard of South Africa to the wine glasses of drinkers in California, for example?

“When you are operating within a supply chain where your customer is different than your client, which is different than your consumer, it requires an extraordinary amount of coordination,” says Cuffe. “I use a freight forwarder that on my behalf reaches out to shipping lines, like Maersk.”

Hiring a global freight forwarder is generally a good idea for all imports/exports businesses, as they’ll serve as a transport agent for moving cargo—saving you a lot of time and worry about getting your products from the factory to a warehouse. Essentially, you’ll give them information about your business and your intentions for the product, and they’ll arrange the shipping agreements, insurance, and oftentimes the licenses, permits, tariffs, and quotas of working within another country. This can remove a lot of the headache associated with starting an imports/exports business in an international trade market.

how to start an import export business

How to Start an Import/Export Business: The Bottom Line

The world of importing and exporting is a dazzling, complex system that balances both emotional and economic needs. If we want something that is grown or produced in another part of the world, how can we get our hands on it? How can we give others the opportunity to enjoy it, while still creating a sustainable lifestyle for those producing it and for those who transport it from point A to B?

If you’re interested in answering these questions, don’t let the enormity of the task overwhelm you. Just do it.  

The post How to Start an Import/Export Business in 6 Crucial Steps appeared first on Fundera Ledger.

from Fundera Ledger

The 10 Best Banks for Small Business in 2019

If you’re serious about running and growing your small business, you’ll want to set up a business bank account as soon as possible so you can start managing your finances (and, eventually, apply for a small business loan).

But when you start searching for a bank to work with, you’ll quickly realize that finding the right small business bank is easier said than done: It takes more than just knocking on the door of the bank nearest your business. It can be overwhelming to sort through the fine print on bank websites and really figure out if they can offer the products and services your business truly needs.   

Lucky for you, we’re here to do some of the heavy lifting for you—we’ve scoured the banking landscape and put together this definitive guide on small business banks. First, we’ll cover the 10 best banks for small businesses in 2019, and then tell you how to find the best bank for your company.

The 10 Best Banks for Small Business in 2019

Wells Fargo Best Banks for Small Business

Photo credit: Wells Fargo

1. Wells Fargo

Wells Fargo has about $2 trillion in assets, making it the third-largest bank based on total deposits. Despite that huge number, Wells Fargo doesn’t just think big picture: they’re also very focused on small businesses. Here’s why Wells Fargo makes the list of the best banks for small business:

Wells Fargo Small Business Lending

We’re willing to bet that, at some point in your small business’s lifetime, you’ll need to take out a small business loan to finance its growth. And when that time comes, you’ll be glad you have an established relationship with a bank, so you can take advantage of bank loans’ excellent terms.

Unlike most traditional banks, Wells Fargo offers more than just medium-term loans and lines of credit. They also offer short-term loans, SBA loans, and equipment finance, making their lending program incredibly flexible for small business owners.

Depending on the type of loan you’re going for with Wells Fargo, your small business can secure anywhere from $10,000 to $100,000 in financing, at a starting interest rate of 6.75%. And because you’ll already have a business account open with the bank, your business loan application for any of the Wells Fargo small business loans will be fast and easy.

Here’s why we think Wells Fargo lending really stands out: It’s the most active SBA lender in the United States. Just take a look at the numbers: In 2016 alone, Wells Fargo issued 6,587 loans from the SBA 7(a) loan program—lending a total of $1,363,161,100 to small businesses.

So, if you find yourself wanting an SBA loan down the line, you’ll be happy to have a bank account with Wells Fargo—aka “American’s leading small business lender”—in place.

Wells Fargo Small Business Checking Accounts

There are four different Wells Fargo business checking accounts, which vary according to your business’s size, needs, and banking capacities: Business Choice Checking, Platinum Business Checking, Simple Business Checking, and Analyzed Business Checking.

The business checking account you choose to use will depend on what kind of small business you run and your needs. But let’s run through the details of Wells Fargo’s most popular and versatile small business checking account: Business Choice Checking.

Wells Fargo Business Choice Checking includes:

  • 200 transactions per month
  • $7,500 in cash deposits per month
  • Text and mobile banking
  • $14 monthly service fee, which is easily waived with one of several qualifying transactions

The Business Choice Checking account is a particularly good fit for small businesses that deal largely in cash, because you can make cash deposits of up to $7,500 a month with no extra charge. (That’s almost twice the amount other big banks will give you!) Once you’ve hit the $7,500 limit, there’s a charge of 30 cents for every extra $100 in cash deposits.  

Extra Banking Features at Wells Fargo

Wells Fargo offers robust lending and checking accounts for small business owners. But you can also take advantage of the bank’s additional features, like:

  • Full-service payroll solutions, employee benefits, human resources, and tax programs
  • A variety of merchant services and new payment technologies to run your business more efficiently
  • Business credit cards
  • Wells Fargo small business insurance coverage to protect your business, assets, and employees
  • Manage your account online with Wells Fargo online banking. Wells Fargo offers a variety of online tools that can help you keep on top of your business expenses, deposits, and cash flow.

Wells Fargo also allows you to integrate your QuickBooks accounting software so you can easily and safely maintain all your financials online. But if you prefer to do your banking in person, you can visit one of Wells Fargo’s 6,000 locations nationwide.

The Bottom Line on Banking With Wells Fargo

Across the board, Wells Fargo is particularly small business-friendly. It’s an especially good option for small business owners who are looking for a strong lending program from their bank. As an account-holder with Wells Fargo, you can easily apply to lots of different loan products with low rates. 

Chase Best Bank for Small Business

Photo credit: Chase Bank

2. Chase Bank

With $2.39 trillion in assets, Chase has the biggest banking presence in the United States. In fact, Chase serves almost half of all American households. But Chase isn’t only focused on the consumer—it also has a significant small business banking program. Here’s why Chase bank might be the best bank for your small business.

Chase Small Business Lending

Chase offers a variety of loan options for small business owners, like term loans, lines of credit, SBA loans, commercial real estate loans, and equipment financing. While Chase is starting to offer more alternative lending products, it’s best known for those traditional small business loans.

And, for qualified borrowers, Chase small business loans can fetch huge amounts of capital. With a Chase line of credit, you can get as little as $10,000, or as much as $500,000 for your small business. And if you want an SBA loan, you have three options: A classic SBA 7(a) loan, an SBA Express term loan, or an SBA 504 loan.

Chase Small Business Checking Accounts

With its three Chase business checking accounts—Total Business Checking, Performance Business Checking, and Platinum Business Checking—Chase can easily meet your business’s checking needs.

Each account is designed for the different stages in a business’s lifetime. The one that’s best suited for small businesses, though, is probably the Chase Total Business Checking account.

Some fundamental features of the Chase Total Business Checking account include:

  • A monthly service fee of $12 when you enroll in Paperless Statements (or $15 for paper statements)
  • Service fee can be waived if you maintain a $1,500 minimum daily balance in your account
  • 200 free transactions per month
  • You can deposit $7,500 in cash each month without a fee.

Extra Banking Features at Chase

If Chase’s established small business lending program and business checking accounts aren’t reason enough to sign up for account, here are some other advantages to consider:

  • Some of the Chase business credit cards are some of the best on the market
  • Both human resources and payroll programs for businesses of any size. With the full-service payroll program, you can manage your payroll (and payroll tax filing) completely online
  • Access to a Chase merchant services account that can make your checkout process as streamlined as possible
  • A Mobile Banking system that’s easily accessible from any mobile device. One of the best features of Chase Mobile Banking is QuickDeposit, where users can scan and deposit checks electronically without visiting a branch
  • 5,300 branches and 15,500 ATMs countrywide
  • When you sign up for Chase’s small business banking, you’ll be given access to free business debit cards for you and your employees.

The Bottom Line on Banking With Chase

Your small business will absolutely benefit from the well-established Chase lending program and their several low-cost business checking accounts. But we think Chase really shines with their small business credit card. In particular, Chase offers some of the most substantial cash back and rewards points earnings on business credit cards.

best bank for small business capital one

Photo credit: Capital One

3. Capital One

Although Capital One has substantial consumer and commercial banking programs, their comprehensive suite of financing solutions proves that they’re equally devoted to small business owners.

Capital One Small Business Lending

Capital One wants to be a partner for your small business, not just your bank. When you need to grow your business and smooth out your cash flow along the way, Capital One has a few different loan products for you to consider.

There are a variety of Capital One small business loan options: you could take out a working capital line of credit, equipment or business auto loan, business installment loan, or SBA loan from Capital One. With a wide variety of loan products available, they’re sure to meet any financing need that comes up as your business grows.

Capital One truly prioritizes your banking relationship. If you have an established Capital One business account and apply for a loan with the bank, you might qualify for what Capital One calls “relationship-based” business loan rates. Simply put, Capital One might give you a lower-cost loan if you already have an established relationship with the bank.

Capital One Small Business Checking Accounts

Capital One offers a straightforward small business checking account system. You have two Capital One business checking options to choose from: the Spark Business Basic Checking and the Spark Business Unlimited Checking.

Here’s what you can expect with a Spark Business Basic Checking account:

  • Unlimited transactions each month
  • Deposit up to $5,000 in cash each month with no extra fee
  • $15 monthly service fee, waived if you maintain the minimum 30- or 90-day average monthly balance of $2,000, or, if you have two other Capital One products open
  • Free business debit card, online bill pay, and online and mobile checking

It’s hard to find a business checking account that has unlimited transactions and a high number of free cash deposits. So, if you run a business that has a high number of monthly transactions and cash deposits, banking with Capital One is a smart choice.

The Capital One Business Advantage Savings Account is a stellar choice for a first savings account for many businesses, too, which requires a minimum initial deposit of just $250.

Extra Banking Features at Capital One

When you sign up for a business account with Capital One, you’ll find that their Spark Business program has a lot to offer. Here are some of the features you can take advantage of:

  • Capital One has a pretty great array of business credit cards, and they’re easy to sign up for if you already have a business account open.
  • Spark Business has a comprehensive online banking program, so you can do all your banking online
  • If you use Capital One’s online banking, you’ll have access to different cash flow management tools that can help you analyze and control your business’s cash flow

The Bottom Line on Banking With Capital One

With a strong lending program and low-cost business checking accounts, Capital One is one of the best banks for small business. But Capital One really sets itself apart by being totally devoted to small businesses. No two small businesses are alike, and Capital One recognizes that by tailoring their Spark Business program to meet various banking needs across various industries.

But here’s where Capital One really shines: When you bank with Capital One, you’ll have access to Spark Business IQ—a program designed to help entrepreneurs manage their business’s operations, finances, and cash flow. You can tap into Spark Business IQ to access valuable guides and share ideas on how to grow your business.

Bank of America best bank for small business

Photo credit: Bank of America

4. Bank of America

In their 200-year history, Bank of America has supported more than 3 million small business owners with easy-to-use banking products and services. With that much influence, Bank of America might just be the best bank for small business. Here’s why it could be a good fit for your small business.

Bank of America Small Business Lending

You won’t have to worry about a lack of small business lending capacity with Bank of America: The bank secured almost $10.7 billion in new credit to small business owners in 2015.

Bank of America offers traditional bank financing, like secured business term loans and lines of credit, along with commercial real estate loans, equipment and vehicle financing, and SBA loans. And, as with any small business loans from major banks, you can get long-term financing at a low rate.

In particular, you’ll definitely want to check out Bank of America if you run a healthcare business, since the bank offers tailored financing solutions specifically for that industry.

Bank of America Small Business Checking Accounts

There are two solid Bank of America business checking account options for small business owners: the Business Fundamentals account and the Business Advantage account.

Here are some major features of the Business Fundamentals Checking account, which offers all the essentials your small business needs:

  • $18 monthly fee that can be waived if:
    • You charge at least $250 per month on a business debit or credit card
    • Maintain an average monthly balance above $5,000
    • Have a combined average of linked Bank of America accounts of $15,000, or
    • Keep a minimum daily balance of $3,000.
  • Free cash deposits, up to $10,000 per month
  • Free mobile and online banking
  • Business and employee debit cards

If your small business mainly deals in cash, you’ll definitely want to consider a Bank of America business account—of the top four small business banks on this list, Bank of America charges the lowest fees on cash deposits.

Extra Banking Features at Bank of America

When you sign up for a small business account with Bank of America, you can take advantage of the bank’s additional features and services, like:

  • An award-winning online and mobile banking service
  • Payroll and express tax services with Intuit
  • Clover Solutions, the bank’s advanced point of sale devices designed to cut down your workload and make your business work more efficiently. Clover products can help organize your payment processing, inventory management, and employee scheduling.

The Bottom Line on Banking With Bank of America

As far as the best bank for small business goes, BoA is a tried-and-true banking option, with a solid Bank of America business lending program and intuitive checking accounts. And if you want to be absolutely sure that you’ll waive a checking account monthly fee, Bank of America is probably your best bet, since it offers the most ways to waive that extra charge.

best bank for small business azlo

Photo credit: Azlo

5. Azlo

When you think about the best bank for small business, you’re probably thinking of the brick-and-mortar banks dotting your area. But with Azlo Business Checking, you don’t need to step foot into a traditional bank to have a positive banking experience.

Created especially for freelancers, self-employed individuals, and side-hustlers, Azlo Business Checking stands out from the pack for two very obvious reasons: This bank account is completely digital, and it’s completely fee-free. Azlo was launched with the backing with BBVA Compass Bank, which holds all accounts on this platform and ensures that all deposits are FDIC-insured.

Azlo Small Business Checking Account

Azlo offers one tier of business checking account, and that account comes with no attached fees on any of its transactions. Some key features on Azlo’s app and dashboard include:

  • Free bank-to-bank ACH transfers (domestic banks only, with free international transfers coming soon)
  • Free debit card with free ATM access at select AllPoint ATMs (there’s an ATM locator in the app) and no foreign transaction fees
  • Mobile check deposit
  • Receive domestic and international wires for free
  • No minimum balance requirement

Since there are no fees and only one checking account tier involved, Azlo’s platform doesn’t come with the (admittedly complicated) fine print that some other checking account terms do. The model is super-simple: Without any minimum balance requirements or tier caps, Azlo offers users a free space to deposit, store, and transfer as much cash as they need.  

Extra Banking Features With Azlo

In addition to all the capabilities you’d expect from a business checking account, Azlo streamlines expense tracking and management through their app and dashboard. Some additional tools on Azlo’s platform include:

  • FDIC-insured accounts
  • Fast and free application
  • Create and send invoices to request payment
  • Connect your business’s Stripe payment processing system (other providers are coming soon)
  • Electronic bill payment  
  • Pay others via mail with digital checks
  • Instant, free payments between Azlo users

The Bottom Line on Banking With Azlo

If it’s convenience that you’re seeking, then Azlo might be the perfect bank for your small business. Azlo offers a completely digital banking experience for small business owners. Some features, such as check deposit, that you could get with a physical bank are missing. Azlo’s target customer is the busy small business owner who needs to access their account online and handle transactions electronically.


best bank for small business

Photo credit: Citibank

6. Citibank

Citibank is concentrated in six urban centers of the United States: New York City, Washington, D.C., Chicago, Miami, Los Angeles, and San Francisco. That covers a wide net of small businesses, but even if you’re not located in one of those cities, there’s a lot you can accomplish with the bank’s digital footprint. Although Citibank is best known for their credit cards, their checking accounts are what really stand out for small business owners.

Citibank Checking Accounts

There are four different Citibank business checking accounts, while most large banks (except Bank of America) only offer two or three:

  • CitiBusiness Streamlined Checking Account: An entry-level checking account. Waive the monthly fee with a $5,000 minimum balance.
  • CitiBusiness Flexible Checking Account: This checking account is perfect for fast-growing businesses. You get 500 free transactions per month, and you can avoid fees with a $10,000 minimum balance.
  • CitiBusiness Checking Account: This account is good for medium-sized businesses and has an earnings credit to offset fees.
  • CitiBusiness Interest Checking Account: Interest-bearing checking account for businesses that can maintain a $10,000 or higher average balance.

With so many checking options, you’re almost guaranteed to find something that works for your small business. And you can stay with the same bank, upgrading to a different checking account as your company grows. Citibank also offers savings accounts, a money market account, and certificates of deposit.

Citibank Business Loans and Credit Cards

You can also use Citibank for business loans and business credit cards. For longer-term financing, Citibank offers commercial mortgages and installment loans, ideal for buying equipment or expanding operations. For shorter-term financing, there are two Citibank business credit cards. One is a business travel credit card that earns you American Airlines bonus miles for spending. The other is a card designed for Costco members.

Extra Banking Features at Citibank

When banking with Citibank, you can access all of the following additional features and services:

  • FDIC-insured accounts
  • Secure CitiBusiness online account access
  • Mobile banking
  • Fraud protection
  • Industry-based banking packages
  • Merchant services
  • Global business solutions

The Bottom Line on Banking With Citibank

Citibank is one of the overall best banks for small business, with something to offer for nearly every type of company and every stage of growth. When just starting out, you can try Citibank’s travel business credit card for quick, convenient financing. As you grow, you might need a longer-term loan or merchant services account. And their four business checking accounts mean that your bank can stay the same even as your business evolves.

best bank for small business Photo credit: Live Oak Bank

7. Live Oak Bank

Many small businesses aren’t familiar with Live Oak Bank because this bank has no physical branches. A completely digital bank, Live Oak offers both business and personal banking. On the business side, the bank focuses on SBA loans, certificates of deposit, and savings accounts. Although Live Oak Bank offers many different types of business loans, they have a great deal of success and experience with SBA loans. If you’re on the market for an SBA loan, this is definitely a bank that you should contact.

Live Oak Bank SBA Lending

Live Oak Bank is an SBA Preferred Lender, which means the SBA has granted them the authority to approve SBA loan applications on an expedited basis. Compared to other SBA lenders, going with Live Oak gives you a speed advantage. You also get the experience of bankers who have facilitated over $850 million in SBA funding.

Live Oak can work with you on any of the following SBA loan programs:

  • SBA 7(a) Loans: These general purpose loans can be used for working capital or a more targeted purpose
  • SBA 504 Loans: These loans are for the purchase or upgrade of fixed assets, such as real estate and equipment
  • SBA 504 Green Loans: These loans fall under the 504 umbrella but provide more favorable terms for sustainable, green businesses.

In addition to SBA loans, Live Oak has also helped small businesses with other government small business loans, such as USDA business loans.

Live Oak Bank Business Banking

Live Oak also provides certificates of deposit and savings accounts for small business customers. The Business Online Savings Account is a high-yield account, currently at a 1.09% interest rate, which you can open and manage online. The yield, according to Live Oak, is 12 times higher than the national average. There are no monthly maintenance fees. Certificate of deposit rates currently range from 2.45% to 3.15%,  depending on how long you keep your money locked in.

Extra Banking Features at Live Oak Bank

When you open a small business loan or account with Live Oak Bank, you can take advantage of the bank’s additional features and services, like:

  • Industry experts to service your loan quickly
  • No monthly maintenance fees
  • FDIC-insured accounts
  • Online application and account opening
  • Access account anytime with mobile app
  • Secure electronic statements

The Bottom Line on Banking With Live Oak Bank

Live Oak Bank is a great option for small business loans, certificates of deposit, and savings accounts. You can get started online, and the bank has a team of industry and banking experts to help you accomplish your company’s financial goals. If you are looking for a checking account, you’ll need to go elsewhere for that, as Live Oak currently doesn’t offer checking accounts. However, with a commitment to service and technology, Live Oak is definitely one of the best banks for small business in 2019.

Santander Bank best bank for small business

Photo credit: Santander Bank

8. Santander Bank

Santander Bank is an FDIC-insured bank with branches and clients located mostly in the northeast. This bank often appears in the news in connection with equity financing, hedge funds, and risk management solutions. Indeed, this is one of the largest banks in the world, with over $13 billion in assets. They have branches in dozens of countries, including the United States, Brazil, Spain, Germany, and Mexico. With over 100 million customers and 14,400 branches, this is one of the best banks for small business if you transact business internationally.

Santander Bank Foreign Exchange Services

If your business does transactions in multiple countries, then you already appreciate the challenge of working with the regulations and currencies of different nations. Santander Bank can make things easier for you with services designed to protect against currency volatility. For example, Santander has trading desks in all major financial markets throughout the world, helping you get the most competitive exchange rates.

Santander commercial customers can send payment via bank drafts for international customers. The payments will be deposited directly into the customer’s overseas bank account. In addition, you can present checks for deposit whether they are in USD or another currency.

Santander Bank Foreign Trade Solutions

Santander Bank also offers a range of solutions for businesses that trade overseas. The services are designed to help your company minimize risk, increase working capital, and negotiate more favorable contract terms.

For exporters, Santander Bank can help you obtain letters of credit from overseas customers. Santander will even work with your buyer’s international bank to ensure payment winds up in your account before your payment deadline. They also with the U.S. Export-Import Bank and the SBA on SBA export loans to help you expand your export business and fulfill orders.

For importers, Santander will issue letters of credit on your behalf to increase the confidence of sellers in current and untapped markets. They’ll also offer banker’s acceptances, which are similar to short-term import business loans. These allow you to defer payments to sellers or break them into installments.

Extra Banking Features at Santander Bank

Working with Santander lets you take advantage of the bank’s additional features and services for multinational businesses, such as:

  • FDIC-insured accounts
  • Variety of lending solutions, including loans and lines of credit
  • Foreign exchange, interest rate hedgings, swaps, and options
  • Santander International Desk team
  • Santander Trade Portal
  • Santander Trade Club and Network

The Bottom Line on Banking With Santander

Businesses that have stepped onto the world stage have unique challenges, and you need a bank equipped to handle these. Santander has a presence in multiple countries and their staff have the experience of working with importers and exporters. Just keep in mind that the bank has branches only in the Northeast. Whether it’s something as simple as getting the best rate on currency exchange or a complicated import/export transaction with multiple buyers and sellers, Santander has you covered. This makes Santander one of the best banks for small business in 2019.

TD Bank Best Bank for Small Business

Photo credit: TD Bank

9. TD Bank

TD Bank, like Santander Bank, has branches across the East Coast. This bank has a diverse range of solutions for small business owners, including checking accounts, savings accounts, credit cards, merchant services, and business loans. However, they really stand out because they provide a lot of opportunities for business owners who want to purchase, upgrade, or invest in commercial real estate.

TD Bank Commercial Real Estate Loans

TD Bank offers multiple options in commercial real estate lending:

  • SBA 504 Loans: Government-guaranteed loans for the purchase and upgrade of real estate
  • Unsecured Term Loans: Provide no collateral for five-year and seven-year term loans
  • Secured Term Loans: Collateral-backed loans of up to 10 years
  • Bridge Loans: These loans can help you transition from short-term, hard money loans to longer-term bank financing.
  • Construction Loans: Long-term loans for the construction of new properties

A variety of business customers are eligible for these loans. Whether you’re a new fix and flipper or an experienced real estate developer, TD Bank likely has a commercial real estate solution that’s right for you. And for other business needs, TD offers other types of business loans.

TD Bank Banking Services

In addition to loans, TD Bank offers other small business banking services. For example, there are TD Bank business checking accounts, with low, waivable monthly maintenance fees. Their entry-level checking account comes with a $10 monthly maintenance fee. Depending on the checking account that you choose, you get up to $30,000 in free monthly cash deposits and up to 500 free monthly transactions.

Extra Banking Features at TD Bank

TD Bank offers a range of value-added features and services for small businesses, including:

  • FDIC-insured accounts
  • Low monthly maintenance fees
  • Merchant services solutions
  • Mobile banking and mobile check deposit
  • Open account online
  • Unlimited cash back on select business credit cards

The Bottom Line on Banking With TD Bank

TD Bank has a full-service bank perfect for businesses located on the East Coast. If you don’t transact in cash, it could be a good bank for you even if you’re not on the East Coast. But you’ll probably want a branch near you, especially if your goal is to have one bank for all your business needs. You can use TD Bank for your checking account, savings account, merchant services, and business loans. The multitude of options makes TD Bank a strong contender among the best banks for small business.

Consumers Credit Union Best Bank for Small Business

Photo credit: Consumers Credit Union

10. Consumers Credit Union

Credit unions have many of the same financial offerings as banks, but their structure is slightly different. Credit unions are member-owned and operated, and their products are available only to members. Credit unions are often a good choice for business owners because their products come with lower fees, higher interest yield, and better service.

Although the name of this credit union might suggest otherwise, this credit union is not just for personal banking. In fact, Consumers Credit Union provides a range of both personal and business banking services. Plus, Consumers Credit Union is easy to join. To join this credit union, you simply have to pay a $5 membership fee and open a savings account with a minimum deposit of $5.

Consumers Credit Union Business Banking

Consumers Credit Union offers checking and savings accounts for small businesses. Even the entry-level checking account waives the monthly $15 maintenance fee as long as you maintain a $1,000 minimum deposit. And you can open an interest-bearing savings account with as little as $5 (though you have to deposit at least $100 to avoid a monthly fee).

Consumers Credit Union Business Loans

There are also a variety of loan options available through Consumers Credit Union. These include owner-occupied and investment property commercial real estate loans, equipment loans, and lines of credit. There are also secured personal loans that you can use for business purposes.

Consumers Credit Union Business Credit Cards

Consumers Credit Union offers a Visa credit card and Visa debit card for small business owners, perfect for separating your business from personal finances or for authorizing employee purchases. Individualized credit limits are available for different cards, so these can be used by you and your entire team. If you get their debit card, you can access ATMs in the credit union’s nationwide network at no cost.

Extra Banking Features at Consumers Credit Union

Consumers Credit Union offers a range of value-added services for small business owners, similar to what you’d expect at a bank:

  • Federally insured bank accounts
  • Nationwide ATM access with CO-OP ATM Network
  • Merchant services solutions available
  • Online bill pay and mobile banking
  • Free online transfers

The Bottom Line on Banking With Consumers Credit Union

If you’ve entrusted your money at bank all your life, it can be difficult to switch to a credit union. But many who’ve made the switch are pleasantly surprised with lower fees, higher interest yields, more affordable loans, and better customer service. The main hurdle is the eligibility to join a credit union. Fortunately, Consumers Credit Union requires just a one-time $5 fee and a $5 opening savings deposit to become a member.

Finding the Best Small Business Bank

At last count, there were 4,746 commercial banks in the United States. with physical branches. That doesn’t even include the dozens of online banks with a completely digital presence. That’s a lot of banks to sort through to find the one that works for your small business. 

Whether you opt for one of the 10 banks we listed above or another institution, your best option depends on what you need for your small business. To find the perfect fit, you’ll have to ask yourself a few questions:

  • Will your small business need financing in the future?
  • How much cash flow will you have moving in and out of your bank account on a monthly basis?
  • Do you prefer to bank in person, or do you want mobile and online capabilities?
  • Are you okay with paying monthly fees to access certain value-added services (such as more included transactions)?
  • Do you prefer to do all your banking at one bank, or are you okay with using different banks for different products?

When you’re answering these questions, be sure to have both your business’s current situation and future goals in mind. If you stay realistic and upfront with your banking needs, you’ll know exactly how to sort through the fine print and find the right small business bank for your company.

Before You Find a Bank, Find the Best Small Business Credit Card

You’re probably looking for a bank so you can open a business checking account, a business savings account, a business credit card, and, eventually, take out a small business loan.

The thing is, though, that finding banks with great checking and savings options will be easy—but finding a bank that will also lend you money can be tough, since bank lending to small businesses is down across the board. Additionally, credit cards are becoming a product you consider discretely, not necessarily based on which bank it’s attached to.

So, deciding on a small business bank will really come down to what you’ll be using that bank for the most: checking and savings accounts.

And if you don’t have a business credit card, start shopping for one now. Business credit cards are crucial financing tools for every small business, because they give you an immediate, flexible source of capital. The best way to find a business credit card is to search the market according to what your small business needs.

Here’s a list of a few of our favorite business credit cards, based on common needs.

1. 0% Intro APR Period

The Blue Business Plus from Amex is our favorite 0% intro APR period business credit card on the market. Why? That intro APR period is 15 months long, the longest we’ve ever seen. Keep in mind, though, that after your 15 interest-free months are up, a variable APR sets in at a rate depending on your creditworthiness. This rate will also vary with the market, so check the issuer’s terms and conditions for the latest APR information.

2. Travel

Chase’s Ink Business Preferred business credit card is hands-down the best travel card on the market right now thanks to their stellar signup bonus: You can earn 80,000 points after spending $5,000 in the first three months. If you use Chase cards for your personal spending, too, this card is even more powerful.

3. Building Credit

Capital One’s Spark Classic business credit card is great for business owners who are still building up their personal credit score, since you’ll only need a minimum credit score of 550 to apply—one of the lowest minimum credit card requirements you’ll find on a major credit card. Plus, you’ll get 1% cash back on all your spend, so you can earn while you build that credit score.

4. Cash Back

When you use a cash back card, you’re getting two financial solutions in one: a flexible line of credit, and the opportunity to receive cash back with every transaction. Check out Bank of America® Business Advantage Cash Rewards Mastercard® for a no-fee cash back card that gives you 3%, 2%, or 1% cash back, depending on where you spend.

The Best Bank for Small Business in 2019

The good news is that small business owners have a lot of options in 2019 about where to bank. The bad news is that all those choices might make it harder to narrow things down and figure out what works best for your company. Fortunately, your choice doesn’t need to be a permanent one. If you’re unhappy with rates or the customer service at your current bank, it might be time for a change. Try one of the 10 best banks for small business listed above. It might be just the thing to help your business grow to the next level.

The post The 10 Best Banks for Small Business in 2019 appeared first on Fundera Ledger.

from Fundera Ledger