The United States is home to some of the most fertile grounds for starting, running, and growing businesses. Even if you don't employ workers — like 81% of the country's 31.7 million businesses — your entrepreneurial endeavors are still very much part of a business. Getting paid has long been one of the most difficult parts of small business management. When properly implemented and used together, these tips should improve the efficiency of your day-to-day business management efforts.
Credit Card Processing
Americans trust credit cards as their preferred payment option, using them for 38% of all in-store payments in 2020; including debit cards, plastic accounts for 67% of all in-store transactions. Card payments account for 58% of U.S. e-commerce transactions, a share that's expected to hold steady through 2023.
One major reason for consumers' trust in credit cards lies in card issuers' openness to accepting disputes. Losing revenue from disputed transactions is an undeniable reality for virtually all entrepreneurs. On average, you can expect to pay a chargeback fee ranging between $25 and $30 per refunded transaction. Although doing away with cards would undoubtedly scare customers away, you can still limit chargebacks and associated fees.
One option is to find payment processors that offer chargeback protection. You can also hire a third-party chargeback management service provider. Ultimately, such providers deliver lower chargeback rates and fewer associated fees without limiting your revenues.
Invest in Accounting Software
Even if you're able to keep track of your business's sales and expenses manually, you can't go wrong by investing in accounting software. On average, small businesses can typically buy full access to suitable accounting software for anywhere from $20 to $50 per month.
Accounting software automatically records invoice templates, saving you time when billing repeat clients. Your software should seamlessly integrate with online payment portals, giving clients secure payment options without you needing to design or implement a web app.
Accounting Software Offers Invoice Tracking
Every modern business accounting platform that's worth its salt includes invoice tracking, yet another valuable tool your business can benefit from. If you don't receive payments by due dates included on invoices, invoice-tracking tools can automatically remind clients to pay outstanding invoices. Your business's accounting software can even send invoices on its own if you forget to send them out manually.
Forming an LLC
It's possible to run a business without legally incorporating it. Doing so comes with several downsides, all of which are avoided by formally structuring your business. One of the most popular business structures is the limited liability company (LLC). After all, limited liability companies offer several benefits, including added legal protections, lower tax rates, and flexible management structures. No two states have identical rules regarding LLC formation. Make sure to study your state's regulations around forming an LLC before moving forward. Since these regulations can be so complex, often requiring substantial legwork from business owners, there's no shame in outsourcing your needs to a business formation service or registered agent NJ.
Seeking Professional Help With a Business Plan
Before implementing any of these suggestions, record them all in a written business plan to ensure a clean, hassle-free execution. Don't go at it alone — seek professional help with writing your business plan from the Institute for Entrepreneurial Leadership.
About the Author Ted James is a husband, father, dog owner, and rock climber living in the Pacific Northwest who devotes a large chunk of his time helping people get back in the driver’s seat of their finances. He created his site, Ted Knows Money, to share money tips and help people get complete control of their finances. tedknowsmoney.com.
