Author: Kristina Fonseca

There are both pros and cons to using Zelle for your small business. As a small business owner, one aspect to consider is the method of payment you will be utilizing to collect payments and invoices. Some small business owners utilize Zelle as their method of payment. Continue to read this article if you are interested in utilizing Zelle for your small business. We will discuss how to use Zelle, and its pros and cons.

What is Zelle? 

Zelle is a digital payment network that allows users to instantly transfer money. Zelle is used through certain financial institutions. In order to use Zelle as a method of payment, you would need to open a bank account. Essentially, you will be going through your bank to use Zelle. 

There are seven different US banks that own Zelle and it is used as a third-party payment method by most US banks and credit unions. In order to use Zelle for your small business, you just need to enroll by using your bank’s mobile app. The 11 major financial institutions in the US are eligible for Zelle. Additionally, Zelle offers their services to hundreds of financial institutions in the US. 

Although Zelle has extended their services to many different financial institutions in the US, they do not offer specific business features to business owners. The services that Zelle offers are the same for all users. However,  Zelle is a great way for businesses to receive payments, and it is free and contactless. Zelle offers free services, however, it is important to check with your bank if they charge fees for using Zelle. Additionally, it is not a service offered internationally and it does not have a purchase protection program.

Who Can Use Zelle?

Anyone who is interested in using Zelle needs to open a bank account. Both the business owner and customer or client need to have a bank account in order to use Zelle. Your customers and clients do not need to use the same bank as you, they just need to have a bank account open. 

For small businesses, you would need to open a business bank account with a financial institution that offers Zelle for businesses. Not all financial institutions offer Zelle to business accounts, so it’s important to make sure that you can use Zelle with the bank that you have opened your business account. To check if your bank offers Zelle as a method of payment, check your banking app about the specifics. If you can enroll in Zelle with your business banking account, you will use your mobile phone number and email address. This will be how customers and clients find your Zelle to send you their invoices and payments. If you already use Zelle for personal reasons, you may need to use different contact information when enrolling in Zelle for your small business. We will go more into detail about how to use Zelle later in this article. 

Here are the 11 financial institutions that offer business Zelle integration:

• • Chase Bank
  • Citi Bank
  • Bank of America
  • Frost 
  • FirstBank
  • Bank of the West
  • Truist Financial 
  • Wells Fargo
  • Morgan Stanley
  • US Bank
  • Investors Bank

How Do I Enroll in Zelle?

As previously mentioned, Zelle is a third-party method of payment and integration that some banks offer for small businesses. So, if you have opened a business account, you would just need to make sure your financial institution integrates Zelle with its services. If Zelle is not an option for you, but you would like to use Zelle as your preferred method of payment, you may want to open a business account with a financial institution that offers Zelle. The bank account that you enroll for Zelle with will be the account that money comes in to and goes out of. 

For example, Alex has a graphic design business. She enrolled in Zelle with her Chase Business Account. She designed a website for a client and has informed her client of the price. The client then sends Alex the money through Zelle, and the money is instantly transferred into the account that Alex enrolled her Zelle with. In order for Alex’s client to send the money, they had to access the mobile app of the bank account that they enrolled their Zelle with, and send the payment on Zelle through their bank’s mobile app. 

Prior to enrolling with Zelle, choose the bank account you would like to receive payments from and enroll through the financial institutions’ mobile app. On the banks’ mobile app,  you would just need to navigate to Zelle and enroll with your email or phone number. The email or phone number you use will be how customers and clients find you and send money to you. 

For example, Alex received a new client and sent the client the email that they used to enroll their Zelle with. To find Alex’s Zelle to send money to, the client needs to access their Zelle through their bank’s mobile app and search for Alex’s Zelle by inputting Alex’s email. This is how clients and customers find your business — via email or phone number. 

Make sure you are not using an unprofessional or complicated email. This will avoid complications when customers and clients search for your Zelle and will also avoid money loss. Additionally, don’t use a phone number that you want to be kept private or that you plan on using for another Zelle account for personal matters. 

How Does Zelle Work?

It is fairly easy for both small businesses and customers to use Zelle. It’s easy because most US banks have already integrated Zelle with their mobile apps. So the only course of action you need to take is to enroll in Zelle through your financial institution’s mobile app. This process is quick and easy. In order to send and receive money, both parties need to have a Zelle account. So keep in mind that your clients and customers will need to have a Zelle account in order to send payments. Though we touched on how Zelle works, here is a step-by-step process of how customers can pay small businesses for purchases and services:

1. 1.  The business provides its clients and customers with their Zelle contact information. This will either be the phone number or email address that they used to enroll in their business Zelle account. Never give customers, clients, and strangers your banking information. To send money via Zelle, bank information is not needed. 
   2. The customer or client inputs the given email or phone number, and the amount that they owe. They then send the payment to the business owner. For first-time recipients, Zelle may send a verification code via text message or phone call for verification purposes. 
   3. The recipient of the payment— in this case, the business owner— will be notified via email, text message, or bank mobile app notification that the payment has been received and is available in their bank account 

How Much Does Zelle Cost?

Zelle does not charge a fee for money transfers. However, there may be fees and transaction limits depending on your banks’ rules and regulations. While most major banks do not charge service fees, you may want to double-check prior to performing transactions for your small business. 

Additionally, your bank may limit the amount and how many times a Zelle transaction is done per day. Limits may differ depending on the type of account you have and whether you are sending or receiving the payment as well. Below is a list of Zelle limits for major banks:

Bank of America 

$15,000 per 24 hours 

$45,000 in a seven-day span

$60,000 every 30 days for small businesses

Up to 20 transactions per day

Up to 120 transactions per month 

No receiving limit

Chase Business Account

$5,000 per transaction 

$5,000 per day 

$40,000 per month 

No receiving limit 

Wells Fargo

$3,500 per day 

$20,00 per month 

Receive up to $10,000 per day 

Capital One 

$2,500 per day 

No receiving limit

Discover

$600 per day 

No receiving limit 

PNC Bank 

Varying sending limits that can be found on your mobile app or account information

No receiving limit 

US Bank

Varying sending limits that can be found on your mobile app or account information

Citizens Bank 

$1,000 per day 

$5,000 per month 

15 transactions per day

No receiving limits 

What Are The Pros of Using Zelle for Small Businesses?

There are pros to using Zelle as a method of payment for your small business, but ultimately it will be up to you, as a business owner, to decide if this method of payment is the best choice for you and your clients and customers. Read further to find out what the pros of using Zelle are.

Contactless

Zelle is a contactless payment method. Business owners do not need a transaction resource to process payments, and clients and customers do not need a physical form of payment. Cash or cards are not required — the only requirement to complete a transaction with Zelle is a phone, bank account, and Zelle enrollment. 

Instant pay

As many transactions take at least 24 hours to complete, if not longer, Zelle payments are instant. When transferring funds between two bank accounts through Zelle, payments take no more than a few minutes to process.

No fees

As we previously discussed, Zelle is free to use. Very few banks enforce a transaction fee. Check with your bank to learn about their transaction fees and transaction limitations. 

What Are The Cons of Using Zelle for Small Businesses?

As with any other method of payment, there are a few cons to using Zelle for your small business. Zelle may not be for every business owner, and it’s important to understand what the cons are so you can decide if it is a payment method that will make running a business easier for you. 

Only available in the US

Zelle is not available to international banks, it is only available to US banks. So if you are a business that will be in a tourist area, you will not be able to sell your goods and services to tourists who only bank with international financial institutions. The same goes for online shops. International customers will not be able to send you money when they buy your online products. Additionally, if you plan to expand your business outside of the US, this method of payment will not be a good fit for you.

No purchase protection program 

Sending money with Zelle can be risky. Zelle doesn’t protect any payments made through their network. Payments made through Zelle also can’t be canceled. Once a payment is sent, there is no way of getting it back. If your customer inputs your number or email wrong and sends the payment, they cannot reverse or cancel the transaction. Because of this, customers and business owners prefer a secure method of payment so there is no loss of money. 

Can’t use credit cards

Credit cards cannot be used for Zelle transactions because Zelle is a network that directly transfers funds between two bank accounts. As many customers prefer to use credit cards this may be an issue. 

What Types of Businesses Would Benefit From Using Zelle?

Zelle will mostly benefit small businesses. Because large businesses have customers and clients throughout the world, do not have a protection program, and do not allow customers to use credit cards, it would be more of a hassle than a benefit. However, there are many small businesses that can benefit from using Zelle. Below is a list of examples of small businesses that may benefit from using Zelle:

• • In-house nail services
  • Gardener or landscaper
  • Cleaning services 
  • Graphic Designer 
  • Freelancer
  • Car mobile wash and detailing services 
  • Photographer 
  • In-home or online tutor 

Alternative Payment Methods 

Transact 

Transact is an efficient payment method that allows businesses, small and big, to instantly send and collect payments via SMS without users having to create an account. Once a business receives an order or purchase, a text message is sent to the buyer and they can directly pay from there. Within the text is a link that directs customers and clients directly to their bills. They do not have to create an account, they are able to quickly pay and complete their purchase. 

Many business owners are willing to pay credit card annual fees because of the perks that come along with it. Additionally, annual fees on business credit cards are considered to be a tax-deductible expense. This may be worth it for businesses that have been in the industry for a long time. However, if you are a small business owner, the additional expense of annual credit card fees may become costly. As a small business owner, it’s important to save as much as you can, while still being efficient. Continue to read this article if you are interested in business credit cards that do not have an annual fee. 

Bank of America Business Advantage Travel Rewards World Mastercard Credit Card

If you are a small business owner that travels a lot and uses different airlines and hotels, then the Bank of America Business Advantage Travel Rewards World Mastercard Credit Card might be best for you. With this credit card, you can earn 1.5 points for every dollar spent on purchases and 3 points for every dollar spent on airline booking through the issuer’s Travel Center. The points you receive can be redeemed for credit on any purchases made for travel. There’s also a starter sign-up bonus. Upon being accepted for the credit card, spend $3,000 in net purchases within the first 90 days and receive 30,000 online bonus points. These points can be redeemed for a $300 statement credit toward dining and travel-related purchases. 

Bank of America Business Advantage Customized Cash Rewards Mastercard Credit Card

The Bank of America Business Advantage Customized Cash Rewards Mastercard Credit Card allows users to receive cash back. Receive 3% cash back in a specific category of expenses of your choice and 2% at restaurants. Receive up to $50,000 a year in combined 3%and 2% spending as well as 1% cash back on miscellaneous purchases. You can change the category for the 3% cash back system. These categories consist of travel, gas, TV, office supply stores, business consulting services, telecom and wireless, and computer services. As a sign-up bonus, receive $300 as a statement credit online bonus once you make $3,000 in net purchases within the first 90 days. This no annual fee credit card has cash rewards that do not expire. 

Chase Ink Business Unlimited Credit Card

If you are an entrepreneur who has noticed that you are spending your money that falls into certain categories, consider applying to the Ink Business Unlimted Credit Card. Get unlimited 1.5% cashback. This credit has a 0% introductory APR period and a large sign-up bonus. Spend $7,500 within the first 3 months of account opening and earn $750 in cash back. 

Chase Ink Business Cash Credit Card

With the Ink Business Cash Credit Card, earn 5% cash back after you spend $25,000 on combined purchases each anniversary year at office supplies stores, internet, cable, and phone services, and 2% back after spending $25,000 each anniversary on combined purchases at restaurants and gas stations. Additionally, earn 1% on miscellaneous purchases. This card has a 0% introductory APR period and a bonus offer of $750 after you spend $7500 on purchases within the first 3 months of account opening.

American Express Blue Business Cash Card

The American Express Blue Business Cash Card has a 0% introductory APR offer and 0% introductory APR on purchases for the first 12 months of account opening. After the first 12 months of account opening, this credit card has an APR of 13.99%-21.99% variable APR. Earn 2% cash back after you spend $50,000 on eligible purchases each year and 1% after that. Each month, the cash you earn is automatically applied to your statement as a credit. Terms and rates may apply.

American Express Blue Business Plus Credit Card  

The American Express Blue Business Plus Credit Card is similar to the American Express Blue Business Cash Credit Card. It has a 0% introductory APR offer and 0% introductory APR on purchases for 12 months from the date of account opening and an APR of 13.99%-21.99% variable APR. the difference between the two credit cards is the Blue Business Plus Credit Card gives users points instead of cashback. Earn 2 points for every dollar you spend on the first $50,000 in eligible purchases each year and 1 dollar point after that. 

Best Credit Card With No Annual Fee for Small Business Owners who Travel Often

Bank of America Business Advantage Travel Rewards World Mastercard Credit Card

Best Credit Card With No Annual Fee for Small Business Owners who Have Categorical Expenses 

Bank of America Business Advantage Customized Cash Rewards Mastercard Credit Card

Chase Ink Business Unlimited Credit Card

Best Credit Card With No Annual Fee for Small Business Owners who spend more than $25,000 Yearly

Chase Ink Business Cash Credit Card

Best Credit Card With No Annual Fee for Small Business Owners who spend more than $50,000 Yearly

American Express Blue Business Cash Card

American Express Blue Business Plus Credit Card 

There is internal revenue service (IRS) phone numbers that are worth jotting down for future reference. The main IRS customer service phone number is 800-829-1040.  However, there is a list of phone numbers you can call that are for individuals who need assistance with their specific situation. We understand paying taxes can be confusing and have created an easy-to-read list so you don’t have to search the internet for them. These phone numbers are a direct line where callers can speak to a human resource regarding their tax questions and problems. IRS customer service is open Monday-Friday, 7:00 am-7:00 pm.

For missing child tax credit payments:

800-908-4184

If you never received a stimulus check or it was the wrong amount:

800-919-9835

If you are a self-employed taxpayer with an account or have tax law questions:

800-829-4933

If you are an identity and refund theft victim and need a new IP PIN:

800-908-4490

If you are a victim of disaster:

866-563-5227

If you are a taxpayer who is overseas:

267-941-1000

If you have questions regarding the amount you owe:

800-829-0922

800-829-7650

800-829-3903

If you have tax questions regarding estates and gifts:

866-699-4083

If you have excise tax questions:

866-699-4096

If you need to report scams and phishing and confirm an IRS agent’s name and badge:

800-366-484

If you need to check the status of a tax refund:

900-829-1954

If you need to check the status of a tax refund that is being held:

866-897-3315

If you need to check the status of an amended tax return: 

866-897-3315

If you need to order a tax transcript: 

800-908-9946

If you need to make a payment through the Electronic Federal Tax Payment System:

English: 800-555-4477

Spanish: 800-244-4829

If you need to report incorrect income on a substitute return:

866-681-4271

If you need to verify, payoff, or resolve a tax lien:

800-923-6050

If you see bankruptcy has changed your tax debt

800-913-6050

For innocent spouse relief:

866-681-4271

To see which debts will offset your tax refund:

800-304-3107

For lost ITIN documents: 

800-908-9982

To check the status of an application for adoption Taxpayer Identification Number:

737-800-5511

For taxpayer advocate service:

877-777-4778

For international taxpayer advocates: 

English: 787-522-8601

Spanish: 787-522-8600

Tax assistance for the hard of hearing:

800-829-4059

If you need to schedule an appointment with a local IRS office:

844-545-5640

If you need to contact the whistleblower hotline:

800-829-0433

If you need to ask the IRS to mail you tax paper forms: 

800-829-3676

If you need to find a local free tax clinic: 

800-9069887

888-227-7669

For tax preparers and tax pros that have account or tax law questions:

800-829-8374

For tax preparers and tax pros with e-filling questions: 

866-255-0654

For tax practitioner priority service:

866-860-4259

For tax professionals who are overseas: 

512-416-7750

267-941-1000

For corporate taxpayers, partnerships, and nonprofits:

866-255-0654

For nonprofits with tax law or filling:

877-829-5500

For government and tax-exempt entities:

877-829-5500

For international businesses that want an Employer Identification Number (EIN):

267-941-1099

For domestic employers, payers, and transmitters who need e-file tech support:

866-455-7438

For international employers, payers, and transmitters who need e-file tech support:

305-263-8700

Ways to Contact a Real Person for Your IRS Questions and Concerns 

Though there is a list of numbers you can call to contact an IRS representative, these may be the best ways to get your questions answered and your problems solved.

Meet In-person with an IRS Assistant 

Every state has an IRS local Taxpayer Assistance Office (TAC). You can find the office with its address and phone number on the list of Taxpayer Assistance locations in your state. These locations do not accept walk-ins, so you will need to make an appointment ahead of time by calling the IRS number, 844-545-5640.

Call the Taxpayer Advocate Service

Every state has a Taxpayer Advocate Service center, where you can receive help with tax problems that you may be experiencing. The Taxpayer Advocate Service is an independent organization within the IRS. To find the location and phone numbers of your state’s Taxpayer Advocate Service you can visit the IRS website. 

State Tax Department Phone Numbers

If you need to contact the IRS regarding the state in which you reside for tax purposes, below is a list of each state’s phone numbers.

Alabama

334-242-1170

Alaska 

907-465-2300

Arizona 

602-255-3381

Arkansas

501-682-1100

California

800-582-5711

Colorado

303-238-7378

Connecticut 

860-297-5962

Delaware

302-577-8200

District of Columbia 

202-727-4829

Florida

850-488-6800

Georgia 

877-423-6711

Hawaii 

800-222-3229

Idaho 

208-334-7660

Illinois

217-782-3336

Indiana 

800-457-8283

Iowa 

515-281-3114

Kansas 

785-368-8222

Kentucky 

502-564-4581

Louisiana

855-307-3893

Maine

207-624-9620

Maryland

410-260-7980

Massachusetts 

617-887-6367

Michigan 

517-636-4486

Minnesota 

651-556-3000

Mississippi

601-923-7700

Missouri 

573-751-3505

Montana 

406-444-6900

Nebraska 

402-471-5729

Nevada 

866-962-3707

New Hampshire 

603-230-5000

New Jersey 

609-292-6748

New Mexico 

505-827-0700

New York 

518-457-5149

North Carolina 

877-252-3052

North Dakota 

701-328-7088

Ohio

800-282-1780

Oklahoma 

405-521-3160

Oregon 

503-378-4988

Pennsylvania 

888-PATAXES

Rhode Island 

401-574-8484

South Carolina 

844-898-8542 Opt. 1

South Dakota

800-829-9188

Tennessee

800-342-1003

Texas

888-334-4112

Utah 

801-297-2200

Vermont

802-828-2865

Virginia 

804-367-8031

Washington 

360-705-6705

West Virginia

304-558-333

Wisconsin 

608-266-2486

Wyoming 

307-777-5200

What is the IRS?

In simple terms, the Internal Revenue Service is a part of the U.S. Department of Treasury. The IRS is responsible for administering taxes, collecting taxes, and returning taxes within the United States. They enforce tax laws to ensure citizens are paying the amount they owe, help taxpayers better understand their responsibilities, and issue tax returns if necessary.

Why do I Need to Pay Taxes? 

Tax collections are required to fund the government and foster economic growth. Taxpayers pay for essential goods and services such as healthcare, education, and infrastructure. Additionally, the money you pay for taxes goes towards government workers, and public libraries and parks.

Be Cautious of Scammers 

Though you can call IRS for questions and concerns, it is important to keep in mind that the IRS will not call you. If the IRS needs to contact you, they will do so via United States Postal Services (USPS).  In some circumstances, the agency will call you, or come to your home for the following reasons:

• • Overdue tax bills
  • Secure a delinquent employment tax payment
  • Secure a delinquent tax return
  • For criminal investigations

The IRS will not call you and ask or demand the following information:

• • Demand an immediate payment
  • Text, email, or message you
  • Ask to pay your taxes with a wire, gift card, or prepaid card
  • Threaten to call the police if you do not provide them with information
  • Revoke your business license, driver’s license, or immigration status

If you have received a call from someone that is stating they are calling from the IRS, you can hang up and call the main IRS phone number at 800-829-1040 to confirm the caller and for any additional details.

Are you interested in starting a small business, but are unsure of what type of business would be the most profitable? While some business starters enter their journey of entrepreneurship knowing exactly which industry to go into, others don’t. Many people have goals of starting their own business, but find it difficult to decide on what kind of business and exactly how to start their own business. It’s hard to figure out a business idea you are confident in and one you are also willing to invest a significant amount of time and money in, in hopes that it will be a profitable business.

There are many different types of businesses you can conquer, however, it all falls down to What kind of business will provide me with a profitable income while growing quickly? Here is a list of profitable small businesses that do not require a lot of financing. Alternatively, you will need to be dedicated, persevering, and determined.

The Most Profitable Small Businesses

As technology continues to evolve, the number of online businesses will continue to increase. There are many profitable small businesses that can be run as online businesses, however, there are also small business ideas that require in-person production and performance. For example, there are online boutiques, bloggers, child caretakers who may travel to their clients, and barbershops that work in their own garages. There is a large list of ideas when it comes to deciding on a small business type. The decision you make will ultimately depend on your interests and preferences. Deciding on what you are interested in may be easy, but will it make a profit? Here are a few small business ideas that are considered to be the most profitable choices for 2022 in no particular order.

Car Wash Services

Car wash services can be a very profitable business. It is certain cars will be around for as long as our grandchildren are around, and possibly even our great-grandchildren and many generations after that. Additionally, you can expect the car scene to also be prevalent for many more years to come. There will always be a large number of individuals who are increasingly interested in cars. With that comes consistent care and maintenance. Starting a car wash business supplies customers with a service that is convenient to them— a car wash that is mobile. Instead of having to drive across town or wait in line, clients schedule an appointment and can have their car washed at their own home. Furthermore, many people prefer personalized car washes because of the accuracy and carefulness that comes along with them. Those who have upscale cars, will not take their car to a car wash. It runs the risk of scratches, dents, and breaks. As a mobile car wash service, you avoid the expense of a physical location and introducing strangers to your home.

Starting small is key to the car wash industry. Offer mobile car wash services to new clients. Once you build up a clientele, offer internal detailing. Later, you can make a large profit by externally detailing cars, which takes a lot of time, practice, and usually a few training classes. Regardless of what your business offers, there are online wholesalers that sell carwash and internal and external kits for you to provide clients with the best services possible.

Personal Wellness 

Are you a certified counselor, therapist, personal trainer, yoga instructor, life coach, etc.? If you are and enjoy personal wellness, consider a self-starter job within the realm of health and wealth. Earn additional income by teaching others what you have learned and know online. Create online courses, training sessions, or meetings with clients who are seeking a knowledgeable expert. If online courses do not spark your interest, start with in-person sessions, or written PDF documents to best help your clients. Starting small will help you understand if it is something you thoroughly enjoy. If it is, it will show with the service you are providing clients and the profit you are making. With mental and personal well-being on the rise now more than ever, you will continue to expand your business and increase clients.

Assisting First-Time Mothers 

Believe it or not, we have entered a generation full of women whose one and only dream is to become a mother. Though motherhood is an extraordinary role, first-time mothers are struggling. With circumstantial factors such as a worldwide pandemic, market crash, and health diagnoses, becoming a mother is risky. Though it has never been an easy task, first-time mothers are struggling now more than ever. Luckily, there are jobs that were created specifically for first-time mothers to assist them through their pregnancy journey as well as their post-pregnancy journey. These jobs have little to no requirements and you get to witness the full experience of motherhood at its beginning stages. These jobs are often referred to as lactation consultants and doulas.

Marketing Copywriter 

There are many jobs that seek proficient writers. The trick to this is becoming an independent contractor for companies who are seeking writers. Use your writing and grammar talents to write for a multitude of companies that need a talented writer for their marketing efforts. Whether you are writing small phrases for a website, or large descriptions in a newspaper, you will be making a profit from the services you provided each company. This is a small business that may require you to write for several different companies, however, you will be making a profit from your own efforts.

Repairing Electronics

Reflect on how many hours of your day were spent on an electronic device, whether it was for work or entertainment. A majority of the population uses some sort of electronic device throughout a long period of their day. Because of this, once their electronic device breaks or malfunctions, they want to get it fixed as soon as possible. Breaks and malfunctions are bound to happen eventually, and there is no better way to fix them than by calling a repair service that can repair electronics in the comfort of your own home in a timely manner. Mobile electronic services are very profitable and often respond to clients who are having difficulties with their iPhone screen, Wi-Fi, or electronic batteries. As electronic retailers such as Apple, have become known for their long wait times, mobile electronic repair services can be a small business that is on the rise. Though it can become a pricey business because of the supplies you may need to purchase, if you remain consistent with seeking customers, it could make a profitable small business.

Children’s Enrichment Activities 

Within the US, the number of children continues to increase. Unfortunately, so has education budget cuts. This has led to minimal, if at all, enrichment activities such as art, athletics, music, etc. With that being said, parents are turning to outside resources for their children’s extracurricular activities. This could make for a profitable small business. If you enjoy teaching young students and have a skill that may benefit the education system, consider how you can make it an enrichment activity for children.

Accounting and Bookkeeping 

With every business comes accounting and bookkeeping. They are unavoidable tasks for every company there is. Oftentimes, they are the most tedious and time-consuming jobs. Additionally, many companies don’t have the space to hire an additional employee for this specific position. This is where starting your own accounting and bookkeeping job would be a profitable small business idea. Focus solely on accounting and bookkeeping and become the best, most efficient bookkeeper. It is likely you will be able to do this job at home, giving you more time to perform this job for other companies. If you have specific licenses such as a CPA license, you can help businesses with more tasks, and increase the pay you receive. 

Auto Repair

While some individuals need an auto repair that requires a lot of time, money, and equipment, others require a few small tools and a little bit of time. Auto shops often take on large car repairs and sometimes even small repairs for a hefty price. When clients have run into an auto issue that requires a small repair they run into both inconvenience and costly service. If you are skilled in auto repairs, consider starting a mobile auto repair service. It can be an extremely profitable small business as you will likely receive a high number of calls each day. Make it a convenient service so you do receive a lot of calls, attending to customers at their homes or work parking lots. Auto repair services you may offer are fluid refills, oil changes, battery swaps, and headlight repairs.

Social Media Management 

Social media has taken on another level of detail. This is because of how effective it can be for marketing a company. Millions of people use social media each day, which means companies have the opportunity to reach millions of people through social media platforms. However, in order to effectively market a company on social media, they have to have a strong presence and a responsive team. This takes a lot of time and many business owners do not have the time or expertise to do so. If you are knowledgeable about the different social media platforms, social media management would be a great way to start your own profitable small business. Turn your knowledge and skills into a business venture by offering support to companies and businesses in need of a social media manager. Social media consulting agencies are on the rise because of social media usage in society, making it a profitable business to consider.

Personal Trainers

As previously mentioned, health and wellness are industries that have recently spiked. If you have a passion for fitness and are knowledgeable about the industry, begin offering mobile services to clients. It is no surprise many people now avoid leaving their homes at all costs. You can become a personal trainer by purchasing workout bands, a few weights and yoga mats, and a kettlebell or two, and take your fitness services on the road. Offer one-on-one sessions to your clients and take them to their homes. Otherwise, start group classes at parks or public community centers. There are many clients who are seeking personal training and are willing to travel nearby.

Vacation Rentals 

There are always going to be travelers and tourists in popular cities. If you don’t live in a popular city, research which one is closest to you and consider renting out sites for visitors to stay in during their vacation. Airbnb sites have made it easy for property owners to make a profit. Purchase a place in a popular tourist location and rent it out to visitors. You don’t necessarily have to live in the same city as the rental, however, it is convenient to live nearby the location in case of an emergency.

Graphic Design 

Almost every business, small and large, will need a graphic designer at some point and time. Some will need a graphic designer more often than not. Regardless, businesses need a proficient graphic designer to grab consumers’ attention, convey messages, and set the tone for their brand. Some graphic designers are assigned small projects while others are assigned large projects, each with differentiating pay. If you are someone who is knowledgeable in Photoshop, InDesign, or Illustrator, are creative, and have taken design classes before, consider turning your skills into a small business. Depending on the project, you can charge hourly rates at a high price, grow while doing so, and create a small profitable graphic design business.

Food Trucks 

Food trucks have been something that is seen more and more often. This may be because rent seems to increase with each year that passes, making it difficult for small food businesses to start their new venture in a high-traffic location. Food trucks are a great solution to this. You can start a small food truck business by parking in your preferred location, at farmers’ markets, local events, children’s sports events, etc. It is likely you will catch the attention of passers. In this regard, if you find a location that does not benefit your small business, you can try again somewhere else. If you decide to enter the food truck industry, ensure you meet the city and state requirements to do so.

IT Support 

Many people believe they are good with technology until an issue arises. Similar to electronics, many people need their tech issues fixed right away and don’t necessarily have the time to wait for tech support. If you are proficient in tech, then the best profitable small business for you might be providing IT support to your neighborhood. You can work remotely unless there is an issue that requires you to go to the customers’ location. In cases where you need to travel, you can charge more for the services you provide clients.

Business or Marketing Courses

Many college graduates aren’t aware of the many different directions their degree can take them. Regardless of your major, it is assured you have learned specific material which can be taught or tutored to others who are interested in this material. For example, if you were a marketing major, you can teach a course that focuses on WordPress, client proposals, or even how to write a cover letter. Likewise, if you were a business major there are many different concepts you can dedicate one course to. The possibilities are endless when it comes to online courses, especially if you already have a college degree.

Consulting

It is obvious more and more people are attempting to start a small business. If you’ve had experience in the business world for some time, many people are interested in seeking tips and tricks to start their own business. Alternatively, if you have increased knowledge about a specific topic, you can share your experience and get paid to do so. Turn your knowledge into a consulting small business. Research events and conferences to share useful information. Whatever your skill set is, you can use it to start a consulting business and make an income while sharing knowledge and working times that best fit your schedule.

Virtual Assistant 

Another profitable small business idea is working as a virtual assistant. Many entrepreneurs and small businesses have come to the realization that they may not need an assistant, but an assistant is very helpful not only for them but for their business as well. Though many business owners are aware of how beneficial it may be to hire an assistant, they don’t want to pay for a full-time employee. This is where virtual assistants are hired. As a virtual assistant, you can choose your employer, create your own schedule, manage emails and schedule meetings, book travel trips, and complete simple tasks. The requirements for this profitable job are to purchase your own laptop and Wi-Fi.

 Academic courses 

As we continue to grow with technology, online business owners are making a profit by offering courses through educational platforms, or their own websites. If you have a degree or are proficient in grade-level subjects such as science, reading, math, and history, you can teach students who are seeking online instruction. There are many ways you can utilize your educational skills. You can create review courses, home-based projects, and even college courses. This is a great way to make a profit while teaching others about a topic you enjoy.

Mobile Apps and Entertainment for Children 

If teaching grade-level students doesn’t spark your interest, but you are interested in the power of knowledge for students, consider entertainment resources for children. We have witnessed a shift in technology with children, where children are using electronic devices more than ever. Are you creative when it comes to thinking of games? What about educational games? Now is the best time to turn your big ideas into reality, and make a large profit off of your educational invention.

Cleaning Services

Are you someone who feels incomplete if something is dirty, or out of place? While a majority of the world works 40-60 hours per week, they neglect the cleanliness of their homes. There are always going to be clients with cleaning needs, especially in higher-income areas. Research which high-income neighborhoods are closest to you, and charge a considerable amount for the cleaning services you provide your clients with. If the services you provided clients with are exceptional, chances are your clients will continue to contact you for cleaning services. Cleaning products are cheap, and you will be making a profit each day that you clean.

Language Courses

As the world becomes more diverse, many people are interested in learning another language. If you speak more than one language, consider teaching online courses to individuals who are interested in speaking the language you speak. There are always going to be clients when it comes to language courses, as speaking more than one language is a benefit in many ways. For this reason, the rate you charge can be high, providing you with a profitable small business.

Courses in Other Hobbies

While there are many courses designed for teaching languages and academic subjects, there are also courses you can teach on pretty much any topic. If you have a unique hobby, passion, or interest, consider teaching that to others. For example, if you know calligraphy, have mastered cooking, or have become an expert at a certain video game, you can most definitely turn these into courses. You would be surprised at how much people are willing to pay for courses like such.

How to Start a Profitable Business 

After reviewing many different types of small businesses, you can expect each one has different requirements, skills, time commitments, and startup costs. However, regardless of the profitable small business, you are considering, there are a few tips every business will need before starting their venture. In the beginning stages of your small business journey, follow these tips.

Step 1: Do Your Research

Making a profitable small business starts with an idea you are excited about and confident in. once you have an idea, it is crucial to do an extensive amount of research instead of just jumping into it. The research will give you a clear plan to follow, an idea of how much money to save and budget, and the end goal of your business. Consider how you will market your business, who your competitors are, your financial situation, and review business forecasting methods. This is the most important step of starting your profitable small business to ensure it succeeds.

Step 2: Organize and Go for It 

Staying organized while opening and running a business is key. Begin by creating a thorough plan. Document the plan to refer to when you feel lost. Planning out a well-formulated plan will give you direction and make it official. Once you make a plan, register your business name, apply for an EIN, and complete all state requirements for opening a business.

Step 3: Find the Right Financing

In order to grow your small business, you may need to take out a loan, however, for start-ups, this may be difficult. If this occurs, we recommend opening a business credit card to help you grow and qualify for loans. Applying for a business credit card is quicker, and can help you increase your credit score (when used correctly,) kick off your business, and earn rewards.

Step 4: Payment Methods

When running a small business, you have to consider a method of payment for clients and customers. The payment method will contribute to the overall experience of customers, which can also determine if they would like to do business with you. Many customers nowadays do not carry cash and prefer a quick and easy method of payment. Research which method of payment would be convenient and quick for customers.

Choosing Your Small Business 

The most profitable small businesses for first-time business owners are those that have low starting costs, are easier to get started, and are a market need. There are many different ideas to choose from. At the end of the day, choosing an idea for your small business comes down to your own experiences, preferences, and interests. The only way to get your business to where you want it to be is simply by starting, remaining consistent, and you will watch your profits increase and your small business grow.

Business credit scores are crucial for the success of a business. If you own a business, you are probably aware of how beneficial business credit cards can be. Though they can be beneficial, they can also deteriorate your credit score if you aren’t careful. If you are interested in a credit card, pulling out a loan, or already have done so and need to improve your credit score as much as possible, continue to read this article to find out how to do so.

What is a Business Credit Score?

Similar to a business credit score, a business credit score is an overall score you receive regarding any credit cards you have opened under your business’s name. Credit reporting agencies calculate a score based on the following:

• • Number of trade experiences
  • Outstanding balances
  • Payment history
  • Time of payment

There are many components a credit reporting agency will consider. Business credit scores range anywhere from 0 to 100. The higher the number, the better the credit score.

Why is it Important to Improve a Business Credit Score?

 The main reason why you should improve your business credit score is to open the option of borrowing more money, whenever you need to. Your business credit score can dictate whether you can borrow more money or not. If you have a high business credit score, you can borrow more money. A lower business credit score can limit how much you borrow if you are able to borrow any at all.

How to Improve your Business Credit Score

Starting and owning your own business requires consistent investing. Regardless of your business, whether you are a caregiver or a car salesman, you can expect purchases to be consistent for your business. Oftentimes, they will be large purchases, and if they are not you can expect at some point to make a purchase requiring a large payment.  For example, you are a caregiver and purchase scrubs, gas, food, etc. for your job. You plan on opening a caregiver location one day. This will only be possible if you have a good credit score, where you will be able to borrow money to build and open the location. Here is how you can improve your credit score.

Check Your Credit Report 

First things first — check your credit score. See what you are working with and where your business’s credit is at. You can do so on credit report companies, such as Credit Karma and Equifax. There are many different credit reporting companies you can use to check your business’s credit score. Some are free, while others may require a payment or a fee. After you figure out your credit score, you can figure out which credit card accounts are raising your credit report and which ones are decreasing it.

Pay Your Bills on Time  

Paying your bills on time is obvious, however many people neglect this rule and it negatively impacts their credit score. This is the easiest way to improve your credit score and the most important one. If you are trying to improve your credit score in other ways, but forgetting to pay your credit cards on time, all other methods for improving your credit score will not matter.

Decrease Credit Card Usage

 When credit reporting agencies are reviewing your credit usage, they will look at both the amount of credit used and how much is remaining. This will determine your credit card score. A rule of thumb most credit card users go by is, to keep this ratio under 15%.

Here is how to keep your credit card ratio under 15%:

• Pay off your balance: Decrease your ratio by paying off the balances you have. If you are unable to do this at this time, pay them off as much as you can.
• Increase your credit limit: If you are able to, ask your credit card provider to increase the credit card limit. This will decrease the ratio and allow for a better credit score.
• Decrease spending: Decrease the amount you spend on your business credit card.
• Open a new credit card: If you are trying to improve a bad credit score, you might be thinking why would I open another credit card? Opening a new credit card and setting it aside will look good to credit reporting agencies. Technically, you have money available to you, but you are responsible for not using it.
• Pay your credit card bills more often: Another way to keep the ration down is by paying your credit card bill more than once a month. In this regard, expenses will not pile up over time.

Consider Credit Card Accounts With Suppliers

If you own a company that relies on suppliers, a good idea would be to open a credit card with them. This enforces good payment relationships because you can remain organized by increasing the number of payments on your file.

Add Positive Payments to Your Credit File

Opening a credit card with a supplier may not add nor take away from your credit report. Some suppliers do not share payment data with business credit reporting agencies. However, you can do it yourself. Submit these to your credit reporting agency manually to point out your positive credit habits. The more successful business credit experiences you can add to your file, the better.

Dispute Errors

With credit card companies and credit reporting agencies, you can report any errors made by someone else. This can only be done if what you are reporting is true, accurate, and up-to-date. The same goes for hard inquiries that negatively impact your credit score. If you notice any of these, call to dispute the error. This is an efficient way to improve the credit score of your business. 

“Pay for delete” Method

Pay for delete is a method used when the debt was sent to collections and credit users want it removed from their credit score. Though many agencies won’t allow this, it is always worth a try. In order to pay for delete, you will need to ask for this and it normally requires you to pay off the debt in whole. Make sure it will improve your credit score because you can still pay the debt off and be left with a bad business credit score. There’s no need to pay off the debt entirely if you do not come to an agreement about “pay to delete.” In the end, you need to have the negative account history removed to improve your credit score.

Recap

Don’t wait until you need to make a big business purchase to improve your credit score. It is guaranteed you will eventually run into a situation where you need a loan or a credit card for your business. There are many ways you can contribute to the improvement of your credit score. If you feel there is no going back, there are always ways you can improve your credit score, even if it is little by little. Try the above-mentioned tips and stay on top of payments.

Building a website for your small business can be very beneficial, regardless of what you offer customers and clients. Whether you are an electrician or photographer, building a website creates an online presence for your small business which can largely grow your company.

Starting a business is no longer a rare pursuit. With many different businesses in the industry, the internet can be a powerful marketing tool and reach many different people. With the way the world is responding to technological advancements, the rise of web users is only expected to increase even more. You can expect at least some purchases to occur online.

Though larger businesses hire agencies to build their websites for them, there are alternative options for small businesses who are interested in designing a website at a low cost. Here is a list of website builders that can help you jump-start your small business:

• • WordPress
  • Weebly
  • Sitey
  • Wix
  • Squarespace
  • Shopify
  • Jimdo
  • Duda
  • Webs
  • Yola
  • GoDaddy

Keep in mind that these websites are also used for large businesses and may be used for your small business long term. They are all great websites for beginner small business owners and are used by hundreds of small and large businesses. Now, let’s take a closer look at why the above-mentioned websites are favored by small business owners and what makes them comparable to each other.

1. WordPress

WordPress is used by over 30% of business owners, small and large. It is the best website builder for beginners. It has become well-known by users because of how easy it is to use and post content. For this reason, WordPress is great for business owners who have little to no experience with website building.

Within WordPress, there are over 300 templates for small business websites, free eCommerce WordPress themes, and customizable fonts, colors, logos, images, and many more. Additionally, WordPress is great for analyzing your website’s SEO capabilities. Once you become more familiar with running a business online, you will understand the importance of SEO and its analytics. In short, the SEO analysis of your website will provide you with statistics about how users are finding your small business website and how well it is performing on the internet. This way, you can determine what strategies to continue to use and which ones to leave behind.

WordPress Pricing

WordPress offers affordable plans and is great for small businesses that are just getting started. The more you pay for a plan, the more you will get out of it. WordPress offers the following plans:

• • Personal plan: Annual bill – $4 per month
  • Premium plan: Annual bill – $8 per month
  • Business plan: Annual bill- $25 per month
  • Ecommerce plan: Annual bill – $45 per month

2. Weebly 

Weebly is another website that has been recognized by small business owners. Weebly is the best free website builder for small businesses. Though the free plan does have limitations, it offers great features for starters. If you would like to incorporate an online store, and blogs on your small business website, Weebly is perfect for you. It offers more customizable website services with an effective drag-and-drop editor. They also have an App Market which is a tool that allows you to take the customization of your business website to another level.

App Market is a tool used for more than just building your website. It offers email marketing services, SEO strategies, eCommerce services, and blogging capabilities. Weebly is an excellent website builder for small businesses that offer services at little to no cost.

Weebly Pricing  

Because Weebly has a powerful plan that is free. Its competitors have a lot to compete with.  Weebly is a great option if you are running your business on a tight budget. However, if you are looking for advanced features, Weebly offers the following plans:

• • Connect plan – Connect to a domain: Annual bill – $5 per month
  • Pro plan: Annual bill – $12 per month
  • Business plan: Annual bill – $25 per month
  • Business plus: Annual bill – $38 per month

3. Sitey

Sitey is a simple small business website builder with many different power tools. This website builder is the best basic builder for small businesses. If you are looking for a functional and easy-to-use website, Sitey is the one for you. Sitey includes the following in its plans: Mobile development, E-commerce capabilities, a Google-friendly desktop, template options, 24-hour hosting, and much more.

Sitey Pricing

Sitey offers a free subscription plan with limited storage. On the other hand, they offer three exceptional plans.

• • Starter plan: Annual bill – $11 per month
  • Pro plan: Annual bill – $14 per month
  • Ecommerce plan: Annual bill – $20 per month

4. Wix

Wix is best for design template options. If you are more interested in a very unique website design for your small business, consider Wix. With the many different template options Wix offers, you can almost guarantee a template that will not match anyone else’s.  They offer hundreds of design templates that are free. With this website builder, you can browse their templates by categories, such as business, design, fashion, video, photo, etc.

The make things easier, Wix’s small business website builder has easy-to-use templates. Creating your website is as easy as dragging, which makes the process of building your website seamless. Wix also offers small business offers pertaining to mobile capabilities and secure online web hosting. 

Wix Pricing

You can get access to hundreds of website templates, unlimited pages, and web hosting for free. For a more advanced website, Wix offers subscriptions for small and large businesses.

• • Business basic plan: Annual bill – $23 per month
  • Business unlimited plan: Annual bill – $27 per month
  • Business VIP: Annual bill – $49 per month
  • Enterprise plan: $500 per month

5. Squarespace

Squarespace is the best small business website builder for creative companies and those who are starting an eCommerce business. They also offer unique services to small businesses such as visually appealing website design templates. Though they offer unique designs, they don’t allow as much customization as other website builders do. Squarespace is for companies who sell and specialize in specific crafts and want to represent their brand with a creative website design template.

Squarespace Pricing 

Squarespace is known to be on the pricey side for small businesses. If you are a crafty small business, this might be worth it. The Squarespace plans are:

• • Personal plan: $12 per month
  • Basic commerce: $26 per month
  • Advanced commerce: $40 per month

6. Shopify

Shopify is the best eCommerce website builder for small businesses because of its integrations. If you are creating an online store for your small business, Shopify allows you to sell your products through the website along with many other online shopping integrations such as Amazon, Facebook, etc. Additionally, Shopify provides you with tools that help you sell while out and about, so customers can clients can also pay in person.

Shopify Pricing  

Shopify offers a free 14-day trial. After the trial, you can choose from the following plans:

• • Basic Shopify plan: $29 per month
  • Shopify plan: $79 per month
  • Advanced Shopify plan: $299 per month

7. Jimdo

Jimdo has over 15 million websites and is great for small businesses that are building a new website. They are best known for their on-the-go eCommerce. With Jimdo, you can create a simple, single-page website, or an online store. If you own a retail business and are expecting to do half of the business online, this would be a good website for you. Their websites are mobile-friendly, and you can easily edit your website on your phone from their app.

Jimdo Pricing:

Jimdo’s biggest strength is their online store accessibility, however, access to this service is not free. Here are what their plans offer:

• • Start plan: $9 per month
  • Grow plan: $15 per month
  • Grow with business listings plan: $19 per month
  • Ecommerce plan: $19 per month
  • Unlimited plan: $39 per month

8. Duda

If you are specifically interested in mobile, desktop, and tablet capabilities, you might be interested in Duda and what they offer. You can convert your desktop small business website into a mobile website if you purchase a Duda plan. Alternatively, you can build your website from scratch. Duda is best for social media integrations as they have a social media analytic feature.

Duda Pricing:

• • Basic plan: Pay annually – $14 per month
  • Agency plan: Pay annually – $74 per month
  • Enterprise plan: Price determined upon the customization

9. Webs  

Webs also offer useful tools such as templates, drag and drop, social connectivity, and many more. However, they are best for businesses that are interested in increasing their small business website SEO. They teach you how to successfully set up your website’s search engine optimization and let you customize your website to reach your goals. Small business owners will benefit from Webs because of the SEO strategy, and their powerful tools.

Webs Pricing 

Webs has three different plans, all of which give you a free domain. They differ when it comes to storage space, store items, customer support, etc.

• • Starter plan: $5.99 per month
  • Enhanced plan: $12.99 per month
  • Pro plan $22.99 per month

These are the starting prices for the specified plan. With Webs, prices may vary.

10. Yola

If you are looking for minimal work when it comes to building your small business website, check out Yola. They provide the best user experience for small business owners. Yola was designed for individuals who have little to no experience with tech. They state clients can create their website within minutes and have many options when it comes to professional designs and custom templates.

Yola Pricing

You can use Yola’s free service, or consider one of their three options. As you increase your Yola plan, their levels of features and support increase. Here are the three plans they offer.

• • Bronze plan: Annual bill – $4.95 per month
  • Silver plan: Annual bill – $9.95 per month
  • Gold plan: Annual bill – $19.95 per month

11. GoDaddy

GoDaddy is known for the start of registering domain names and eventually creating a website builder for small and large businesses. They are best for registering domain names and offer eCommerce capabilities. Though they have low prices, capabilities are limited when it comes to GoDaddy.

GoDaddy Pricing

GoDaddy has several plans, some allow you to sell products while others don’t. The plans they offer are:

• • Basic plan: Annual bill – $10 per month
  • Standard plan: Annual bill – $15 per month
  • Premium plan: Annual bill – $20 per month
  • E-commerce: Annual bill – $25 per month

Finding the Best Website Builder for Your Small Business

Finding a website builder for your small business can be confusing. You want a website builder that will provide you with a unique design, is cost-efficient, and is easy to use; however, there are so many different options each with mixed reviews. Before choosing a website builder for your small business, consider the following:

• • Your budget
  • How often you will use the website
  • How many website visitors you are expecting

In summary, the website builder you choose for your small business should:

• • Allow you to choose a domain name without hassle
  • Offer a selection of website templates
  • Integrate social media
  • Offer shopping cart services
  • Have SEO capabilities
  • Be affordable
  • Allow you to easily upload photos
  • Offer mobile design services
  • Give you access to the customer support team

As a small business owner, you have probably realized you have very little time to get everything accomplished. Ensuring you choose the right website builder is important so it makes things easier for you instead of harder. Now that you have a list of website builders for small businesses, it is time to choose one that will best fit your needs as a small business owner.

There are many benefits to opening a credit card for your small business. Whether you are interested in getting a credit card for regular spending expenditures, or for capital needs, there is no better time than now to open a credit card. Though there are many benefits of credit cards, only 1 in 10 small business owners are aware of the perks and get paid to spend money on their credit cards. What this means is that if you choose the right credit card, your business is spending money, earning rewards and points, and in turn receiving money back.

It is important to choose a credit card that will benefit your small business. The right company credit card will help you as a business owner in the following ways:

• • Manage online expenses
  • Earn rewards and cashback
  • Give you access to capital

Continue to read this article if you are interested in how you find a company credit card that best suits your small business. We’ll go over the steps and tricks of how to do so.

1. Improve your Credit Score

Understanding your credit history is important when looking for a credit card for your business. Business credit cards can affect your credit score in different ways because it is considered to be different than your regular, personal credit score. Though they are different, they both indicate your risk as a borrower. Furthermore, your business credit score can affect your personal credit and vice versa. There are four important credit scores business owners should be familiar with and improve on:

• • Personal credit score
  • D&B PayDex
  • FICO Small Business Score
  • Experian Intelliscore

Your business credit score will determine which credit cards you are qualified for, and the interest rate and credit card limit you are eligible for. If you have a poor credit score, it is important you improve your credit score by making payments on time and resolving items on your credit report that are causing its score decrease.

2. Document Three Months’ Worth of Expenses

You may already be keeping a close eye on your expenses as a small business owner. This is something you will want to take an even closer look at when choosing a credit card that is best for your business. Categorize and document your expenses for a quarter to learn about what you spend your money on, and determine which type of credit card would be best for earning rewards based on your expenses. The following categories are business expenses you can consider for the documentation process:

• • Office supplies
  • Restaurants
  • Gas
  • Travel

After you have documented your expenses for a quarter, you will be able to compare credit cards and narrow down which one would be best for you, as they all have different offerings. For example, some credit cards offer travel rewards. After spending a specific amount of money on the credit card, the owner receives travel rewards that may include a paid flight or paid hotel room. This will come in handy for a small business owner who travels a lot. They are still buying what they need to buy for their business while accumulating points that save them money in the end. Alternatively, for a small business owner who owns an online boutique store where travel is minimal, this credit card would be useless, and they might want to look into a credit card that offers rewards tailored to their purchase category.

3. Find a Credit Card that Meets the Needs of Your Business

Finding a credit card that is best for your business can be overwhelming because of the number of credit cards that you are able to choose from. There are so many options, and you may be asking yourself: How do I choose the best credit card for my business? Additionally, there are many other considerations when looking for a credit card for your company. When deciding on a credit card, ensure you are familiar with how they work, why they are different than regular credit cards, and how your business can best benefit from them. Begin by determining the category your business falls under, and what the needs of your business are. Then, consider the following benefits of credit cards:

• 0% APR for starters: Many banks offer business credit cards with little to no interest rates upon opening your credit card account with them. Depending on the card, interest rates may hit 6 months to one year after the credit card was opened.
• The size of your business: A business that has less than 10 employees may want a credit card that offers analytical components, while a larger business may want a credit card that offers employee cards to progress growth.
• Foreign transaction fee: Will you be using this business credit card to travel internationally? If so, consider the foreign transaction fee.
• Credit card types: If you have a poor credit history, you may not be able to open a business credit card. For someone who cannot open a credit card for their business, there is an alternative option known as a secured business card. This card is secured by a security deposit prior to usage, but still functions like a credit card. The secured business card will have lower limits and must be paid in full each month.
• Travel points: As previously mentioned, some credit cards will offer travel rewards that can accumulate to a large amount and completely pay a travel fund so you do not have to. There are many different travel rewards such as miles and transportation points, restaurants and dining out, hotels, rentals, and many more.
• Welcome bonus offer: There are banks that will offer you a bonus for signing up with them, opening a new account, referring a friend, or spending a specific amount within a set amount of time. For example, some banks will offer $200 if you refer a friend and the friend acts upon the referral. Some banks may also offer you $400 if you spend $2,000 within the first 2 months of opening a new credit card with them.
• One card for multiple usages: If you need several cards for employees, but would like for them to have their own account, it is important to look for a credit card that offers this benefit. Be sure to be aware of fees in cases like so.
• Virtual cards: Virtual cards are best for businesses that shop online frequently, or who prefer to hold a virtual card rather than a physical one.
• Regulations: Business credit cards typically have stricter regulations than personal credit cards do. Examples may be changing the interest rate to a higher one, or large fees for late-payments
• Credit bureau reporting: Some credit card businesses will report to some business credit bureaus, while others will not. Determine which credit score service you are targeting and improving, and ensure you open business credit cards that report to the chosen credit score service to increase and improve your score.

There are many factors to consider when deciding which credit card would be best for your business. Pick two factors from the above-mentioned list that are most important to you and go from there.

4. Plan your Spendings

After reviewing what you spend on your business expenses on a quarterly basis, it will be easier for you to decide what kind of card you are looking for and what rewards you are most interested in. If you plan on using your credit card in a specific category, you should open a credit card with beneficial rewards regarding that specific category. If you plan on using it for one large purchase, consider a credit card with rewards that you may use on this purchase.

5. Calculate Annual Fees

There are business credit cards that do not have an annual fee. Opening a credit card that does not have an annual fee may sound enticing because it saves you money. You may think it is saving you and your company money however, a lot of credit cards that offer the best rewards have an annual fee. Depending on your business and its circumstances, it may be worth paying the annual fee because of all of the rewards and benefits you get from the credit card. For example, you open a credit card that does not have an annual fee, but a 3% cashback rewards system or you open a credit card with a $95 fee and 6% cashback. This means if you spend about $3,000 throughout one year, you are earning more rewards than you are paying for the card. Choose a credit card after considering how well it will benefit your company based on its rewards and fees and your expenses. If you do the math and find the annual fee is worth the rewards you will be getting because of how much you spend, the credit card will be providing you with more than you are providing the credit card with.

6. Learn About the Credit Card Rewards Program

The rewards of each credit card will vary depending on the form of the membership, the issuing bank, and sometimes even the month the credit card was opened. Some programs may change their rewards systems yearly, quarterly, or even monthly— offering new and exclusive rewards. There are many different types of business credit card rewards within the industry, so be sure to review the reward program before making a final decision on what credit card would be best for your small business.

Here are some examples of what credit card reward programs may offer:

• • Cash rewards
  • Cell phone insurance or replacement
  • Hotel coverage
  • Exclusive hotel complimentary
  • Concierge services
  • Discounted streaming subscriptions
  • Discounted premium-level subscriptions
  • Bonus points on eligible purchases
  • Credit score monitoring
  • Extended warranties
  • Car rentals at a low or no price
  • Free or discounted VIP access at events or museums
  • Canceled flight insurance
  • Lost luggage replacement
  • Airport lounge access

The list goes on when referencing what business credit cards offer on their rewards programs. Ultimately it is up to the business owner to determine which credit card would save them money, and help grow their business. Credit cards can be great for both the business and the cardholder as long as they are staying on track with payments and taking advantage of the rewards.

Saving money as a small business owner is key for progress. There are other methods you can utilize that can contribute to your money-saving habits, such as SMS invoicing. As many people are using virtual credit cards as their recommended method of payment, consider taking your business to the next level by incorporating an invoicing system that is easier for both you and your customers/clients, and saves you money.

How do I apply for a Business Credit Card? 

Applying for a business credit card is similar to applying for a personal credit card. The process is simple, and you may even be able to apply for a business credit card online. Before applying for a business credit card, make sure you have registered your business. When applying for a business credit card, they will check both your personal and business credit scores. Depending on the credit card, it may be required to provide the company with your business’s income records, and employee identification number (EIN.) After the credit report is run, you will know which credit cards you are eligible for. Upon choosing a credit card, you will be informed about its credit limit and interest rates. Keep in mind that business credit cards will have restrictions on use for mortgage or rent payments, payroll, and certain methods of invoices.

You will need the following information when applying for a business credit card:

• • Legal business name
  • Business address and phone number
  • EIN
  • Age of business
  • Personal income
  • Annual business revenue
  • Date of birth
  • Social security number or taxpayer identification number
  • Monthly business expenses
  • Annual business revenue
  • If there are any issues on your credit report, provide your statements of disputes

Depending on your credit score, your business credit card application should be processed within a few hours of submission. Once you are approved, you may use the credit card for your business and earn points, rewards, and cashback.

FAQ

What’s the difference between a business credit card and a personal credit card?

Business credit cards typically have a higher credit limit and more useful, effective rewards. Personal credit cards may have a smaller credit limit and smaller rewards, however, they do have buyer protection rights.

What’s the difference between a Visa and a MasterCard?

Visa and Mastercard’s are both types of credit cards. Sometimes certain stores and shops only accept one or the other when it comes to using a credit card as a method of payment. They may differ in the following areas: how the payment is processed, rewards offerings, the structure of rewards, and interest rates.

When should I get a Credit card for my Business?

The best time to get a credit card is when you are planning on making your first purchase for your business. Open a credit card account prior to making your first purchase as a business owner, so you can begin accumulating points and rewards as soon as possible. A business credit card provides you and your company with these 4 benefits:

• • Protecting your credit score with separate business and personal accounts
  • Builds your business’s credit score, if used responsibly
  • Can raise capital
  • Earn business rewards

Make the most out of your business expenses by opening a credit card and save money while doing so.

The tricky part about owning a business is determining how well your business will do. If every business was guaranteed to be successful, then everyone would start their own business. The most important and evident goal of running a business is: to increase money flow. It is important to recognize how well the finance side of your business is doing so you are increasing revenue. But how do you increase revenue when sales and expenses are so unknown? Though you can always judge what the outcome will be of your business by its financial situation, there is another way to keep track of expenses, and money flow, and predict customers’ future wants and needs to stay ahead of the game. Business forecasting is one way to increase revenue and stay ahead of recent trends. Continue to read further if you are interested in how business forecasting can help your business grow. 

What is Business Forecasting?

As we all know, the term forecasting means to predict, or estimate, a future event or the outcome of a specific scenario. When it comes to business forecasting, this means you are essentially predicting future events and trends by analyzing both past and present business data to generate answers regarding business growth. Business forecasting doesn’t directly relate to your own personal business, but to the economy as a whole. This allows your business to make decisions based on the economy, and its data, leaving you with predictions on what would be best for your business. 

By deeply analyzing businesses, and their trends, patterns, and current and past historical data, you are able to predict what the future holds for your business. The idea of business forecasting allows your business to think long term, and prepare for any changes the market may throw at you. 

The approach to business forecasting will vary, depending on your business, its goals, needs, and what it stands for. Typically, the process of business forecasting goes as follows:

• • Collecting different sources of data 
  • Data analysis 
  • Strategy creation
  • A comparison between your forecasting model and your business at it currently stands

What does Business Forecasting do?

The goal of business forecasting is to expand and grow your business. By analyzing the market and economy, business forecasting allows you to plan ahead and make necessary decisions for your business and its future. Business forecasting allows you to:

• • Create a budget for your business
  • Allocate funding 
  • Monitor cash flow
  • Determine credit needs
  • Create timelines for new products and services your business offers

The above-mentioned is a list of the basics that business forecasting can assist you with. Again, there are many different methods you and your business can use to make informed guesses about your business and its future. For example, if your business is fairly new, you will not be using the same methods as a business that has been around for decades. The data you analyze will be different, as will the outcome. 

Why is Business Forecasting Important?

It is important for business owners to understand their finances and if they are financially on track. The more you understand your business and its finances, the better the chances of increasing sales. Business forecasting can benefit businesses long term. Predicting what can happen within the next year, quarter, or even decade can generate helpful information for your business. Business forecasting can:

• Help you and your business gain valuable insight: once you are aware of what the future holds, you can set realistic, smarter goals, make more informed decisions based on the knowledge business forecasting has left you with, and create strategies based on the data you have learned about 

• Increase profits while saving money: create a realistic budget for your business while considering the history of the market and what is to be expected of it

• Understand previous mistakes & learn from them: business forecasting allows you to understand previous mistakes and what does not work for your business

• Predict market trends: more importantly, you will be able to predict market trends and changes leaving you with proactive results 

Business forecasting is a great way to understand the market you work in, and what works and isn’t working within this market. By providing customers and clients with the services and products they want and need, you are increasing business sales and establishing brand loyalty. 

What are the Pros and Cons of Business Forecasting?

Business forecasting can be very beneficial for the growth of your business. Though business forecasting is beneficial, there are cons to the process. Here is a list of the pros and cons of business forecasting.

Pros of Business Forecasting

• • Results that benefit your business
  • Gain clarity on the market and your business
  • Debunk the myths that may be holding your business back from increasing profits
  • Enables you to learn about informed business decisions 

Cons of Business Forecasting 

• • Predictions aren’t always going to be accurate
  • Time-consuming 
  • Can become expensive 
  • Require significant research 

Though business forecasting can become time-consuming and expensive, it can hold significant value to your business. Business forecasting might enable you to figure out exactly what it is that your business is missing, which can largely increase profits. 

What are the Different Methods of Forecasting?

There are 2 main methods of business forecasting. One is market surveys and the other is formulas and analysis. 

When a business does not have enough data to create predictions, it will conduct market research. By observing and with surveys and polls, business owners are able to receive information regarding their business and make predictions based on what they have, and the history of the market. 

On the other hand, formulas and analysis are when businesses that have been around for many years have enough data to make predictions. By analyzing previous years and their sales, and witnessing market changes, they are able to make predictions quickly and easily. 

Furthermore, while there are business forecasting methods, there are also many different types of business forecasting. 

What Types of Business Forecasting are there?

There are many different ways you can estimate data and events for your business. Each type of forecast focuses on the specifics of a metric or outcome. 

What you are interested in learning about for your business will help you decide which business forecast to use. Furthermore, there are types that are for general sales aimed at the following month and more specific types that are for sales that are aimed at sales goals for the following year. 

Here are the 6 common types of business forecasting:

1. 1. General business forecasting
   2. Financial forecasting
   3. Accounting forecasting 
   4. Demand forecasting 
   5. Sales forecasting 
   6. Capital forecasting 

What is General Business Forecasting?

A general business forecast is used to determine the specifics of business on a specific future date. It is used to review market conditions and how the economy will impact your business. Businesses that operate in environmental factors often use a general business forecast. For example, analyzing how politics will impact Americans in 2025.

What Is Financial Forecasting?

Financial forecasting is understanding your business’s financial situation and the direction it is going. This includes accounts payable, accounts receivable, assets & liabilities, business costs, cash flow, and the conditions of the market. It is used to create a track for your company’s financial needs and goals.

What is Accounting Forecasting?

Accounting forecasting is considering how the economy will impact your business. By analyzing past and present price changes, you can estimate how your business will pay for labor, utilities, rent, materials, inventory, and much more. For example, analyzing the cost of vegetables, both past, and present. 

What is Demand Forecasting?

Demand forecasting is predicting the needs and wants of the market. It is used to determine which goods and services are in demand by customers. This allows you to plan how much money you will need to invest in products and inventory, how well the product will function, and if it is worth it. 

What is Sales Forecasting?

While demand forecasting focuses on the wants and needs of the market, sales forecasting focuses on the investment that comes from the products or services in demand. This allows you to predict how your business will capitalize on the sales that are in need. Using your company’s sales data, you can estimate future sales. It will provide you with the sales revenue you are expecting within the next month, quarter, or year of business. This is done by analyzing sales history. For example, analyzing the last year of sales to determine how many people you will need to hire in the upcoming year, and at what cost. 

What is Capital Forecasting?

Analyzing current and future assets and liabilities, and predicting future liquid capital and cash flow estimates is also known as capital forecasting. There are many components to analyze with capital forecasting and it normally becomes tedious and tricky. For example, the following components are a list of what can be considered: 

• • Assets
  • Cash
  • Savings 
  • Accounts receivable 
  • Lines of credit 
  • Investments 
  • Revenue 

It is used to predict the available capital you will have in the future or on a specific date. This is most often used by companies who are preparing for a major change that will require cash, such as hiring, growth, investments, relocating, etc. For example, estimating working capital for hiring 6 employees. 

What is the Difference between Forecasting Methods and Forecasting Types?

The difference between forecasting methods and forecasting type differs in the why and how. The forecasting type is chosen based on what your goal is, such as sales and the flow of cash. Alternatively, the method is how data is identified and gathered, such as qualitative and quantitive, something we will dive deeper into to get a better understanding. 

What are the 2 Common Approaches to Business Forecasting Methods?

There are a few different types of forecasting approaches. However, they all fall within two categories: quantitative and qualitative. One approach will benefit your business more, depending on your company’s age and data. 

What are Quantitative Forecasting and Qualitative Forecasting?

Quantitative forecasting relies on structured data such as experiments, and statistical analysis. On the other hand, qualitative data unstructured data such as observations, surveys, and interviews. So which method of forecasting should you use? Let’s review the subcategories of each to determine which method of business forecasting would be best for you. 

1. Quantitative Forecasting Methods 

As previously mentioned, quantitative forecasting relies on measurable data, meaning the facts and statistics behind the business. Because it focuses on statistics, you can expect the outcome to be promising. Observing the patterns and scenarios can lead you to an answer and you will notice a cause and effect map-like structure. This cause and effect map allows you to easily predict the future. This can be a great benefit for your business and its revenue. 

When you are upgrading current services and products, and adding new ones to your business, common questions that arise and are often tricky to figure out are ones like:

• • How many products and services will I need?
  • How often will I need to purchase products or invest in the services I offer?
  • Are the services and products I offer in demand?
  • Who is purchasing these sales/services demographically? 
  • Are the needs of our target market changing? 

The quantitative forecasting method allows you to find the answers to these questions, which is something many business owners struggle with. Furthermore, it aids in the process of predicting year-to-year sales figures.

Because the quantitative forecasting method uses historical and statistical data regarding your business and the market it is in, companies that have at least 3 years worth of business are ideal for this method. This allows experts to analyze and track your business and the market to make beneficial predictions. 

There are 2 common quantity forecasting business methods, known as time-series and casual. 

What is the Time-series Method?

The time-series method is the most common quantitative forecasting approach. It’s the most common approach because it relies on factual information to make predictions. Forecasting allows individuals to predict the future by utilizing past information. Researchers build data charts by using current and historical data. This provides a more clear understanding of the “why” of what businesses are experiencing. 

This method uses past, present, and future data to figure out answers to specific questions. There are two standard models within the time-series method: Exponential smoothing (EA) and moving average (MA.)

What is Exponential Smoothing?

Exponential smoothing is a frequent technique used. Essentially, it is when observations decrease priority as they age. 

What is Moving Average?

Moving average is the easiest way to forecast. Previous calculations are analyzed and used for the next period. 

What is the Business Forecasting Process?

The business forecasting process requires several years of data to clearly understand relationships and data.

Why Would You Use the Time-series Method?

This method is typically used to forecast daily product sales, or get an understanding of seasonal changes. The types of businesses that commonly use this method are finance and retail. 

How Accurate is the Time-Series Method?

The accuracy of the results will depend on which method you work with and how long you use the method. The shorter the time period, the better. Shorter time periods will lead to more precise time-series forecasts. For example, 3-6 months. 

What is Causal Forecasting?

The causal forecasting method studies two variables that are likely to affect movements in the market. By studying the cause-effect relationship between the two, you predict future market changes such as prices and demand. One variable represents an issue, and the other represents the prediction of the issue.  

For example, A pandemic hits and businesses close. How will this affect your business?

Regression analysis is a method of causal forecasting that uses statistical equations to estimate how the variables will be impacted and how they impact each other.

What is the Business Forecasting Method?

This process also requires several years of existing data to predict sales, labor costs, or future challenges. To successfully casual forecast, you should forecast for 2 months to 1 year. 

Why Would You Use the Causal Forecasting Method?

This method is often used by business owners who need to analyze their business for future sales. They analyze current and future trends and make estimates regarding distribution, manufacturing, and scheduling. 

How Accurate is the Business Forecasting Method?

The casual method determines the impact the variables have on each other, and how this will affect day-to-day consumer demand operations. Casual models lead to more accurate predictions because of the continual adjustments and revisions regarding recent information.

2. Qualitative Methods of Forecasting

Instead of formulas and numbers, qualitative forecasting relies on feedback from customers and experts. This gives a qualitative understanding of a specific problem, subject, or point of interest. 

This is an unstructured, non-statistical approach. With subjective interpretations, it provides an outcome of forecasts to help business owners develop an understanding of a question that has arisen. 

The qualitative method best benefits new businesses that don’t have enough data to analyze or companies that are interested in products and services that bring the most value to customers. 

For example, a business is interested in what customers’ opinions are about a new product or service. To measure their opinions, forecasters will use qualitative research. 

Business owners who are qualitative forecasting will ask questions such as: 

• • Is this product/service better than competitors? Why or why not?
  • How can we improve this product or service?
  • On a scale of 1-10, what would you rate our web design?
  • What message does this advertisement convey?

Qualitative forecasting also has techniques such as the Delphi method, Market research, and the Panel method.

What is Market Research?

Market research focuses on the market and testing its hypotheses. It can be conducted with observations and personal interviews. This method involved asking a specific, targeted group of people questions about a particular issue to gain insight and collect data. The data is then converted into numerical results. Qualitative research requires human interaction to receive results, unlike quantitative data. 

Qualitative forecasting allows businesses to better understand consumer needs and demands, analyze competitors, and quickly determine market trends. 

Market researchers will use one of two surveys to collect data:

1. Cross-sectional surveys: Most common in retail and healthcare industries are surveys that target a specific population
2. Longitudinal surveys: Rely on behavior changes that could take months to decades to measure – are surveys that are conducted with various time durations to study thought processes and behavioral changes

What is the Business Forecasting Process?

The process consists of collecting data from surveys, polls, interviews, and questionnaires. This method is more time-consuming and should take at least three months. 

Why would you use the Market Research Method?

This method is used to observe and record customer satisfaction and receive feedback on products and services that were recently introduced to our business.

How Accurate is this Method?

This method is very accurate if business owners stay consistent with collecting data, otherwise, the method won’t be very accurate.

What is the Delphi Method? 

The Delphi method consists of asking a number of experts a set of questions. The answers that the questions receive will determine the next set of questions. In this regard, the process is flexible and dynamic. 

The experts who are taking the questionnaire are allowed to share the answers with one another and may change their answers if they choose to do so. The Delphi method is supposed to lead to an agreement among the experts based on the answers to the questionnaire. Essentially, the experts discuss the questions and agree on an answer for each question.

If necessary, the questionnaire can be given several times until there is a consensus. Once this occurs, a final group opinion is made. 

Why Would You Use the Delphi Method?

Businesses that have limited market research often use this method. Companies who work within a specific industry will survey experts for an accurate forecast and precise conclusion. 

What is the Business Forecasting Process?

The process can take 2 months or longer and begins with a researcher who will create and distribute the questionnaires to experts. Experts will take the questionnaire, sharing and changing answers when necessary. When they feel content with the answers, they will submit the questionnaire for further analysis. 

 How Accurate is the Delphi Method? 

The Delphi Method is considered to be one of the most accurate forecasting methods. Though it is very time-consuming, it is best known to predict future trends. 

What is the Panel Consensus?

Similar to the Delphi method, Panel consensus surveys a group of people. However, the Panel consensus method is different than the Delphi method because it surveys the same group of people more than once. Interviewing the same group of people on two separate occasions allows you to understand how behaviors change over time. 

Another way this method is used is by planning meetings where a panel of people discusses their thoughts and opinions about a product or service until a consensus is reached. If a problem arises within the company and its employees, this is a good way to figure out the problem, discuss it, and come to terms with a solution. 

Why Would You use the Panel Consensus Forecasting?

Businesses will use the panel consensus method to discuss ideas and the value these ideas may hold. Regardless of the problem, internal and external issues regarding the company may be discussed during a Panel consensus meeting. 

What is the Business Forecasting Process?

Since this method requires several interviews, they should be conducted at least two weeks apart to receive accurate reports and data. 

How Accurate is the Panel Consensus Method?

Because the Panel consensus method requires group meetings and sharing of thoughts and opinions, it has been noted that there are many factors that influence the answers. Therefore, it is considered to be a very accurate method. 

How Do I Start Business Forecasting?

After reviewing the many different forecasting approaches you may be wondering which method would be best for your business? The answer is complex and ultimately depends on your business, the type of business, how old the business is, its goals, needs, and market. 

Though there are many factors to consider when deciding which method to use, you can begin by narrowing down the list by asking yourself the following questions:

• • What is the problem you are trying to solve? Or what data are you trying to obtain?
  • Do you have enough historical data?
  • Do you have a date of how far in the future you would like to predict or forecast?
  • Do you have enough time and resources to collect data, analyze, predict, and forecast?

These are questions that will help you determine which method would be best for predicting, forecasting, and finding the answer you are looking for. 

Stay Organized 

Depending on your goals and needs, forecasting can take a few weeks or it can take up to a decade. For this reason, it is important to ensure you are staying organized so that any data does not get lost. Make sure your research is being documented instead of time and money lost. There are many things to document when forecasting such as:

• • Employees 
  • Services and products 
  • Pricing 
  • Research & data 
  • Time 

Forecasting may require you to hire more employees, purchase more products, sell more services, etc. furthermore, it is important to accurately and safely track and document data to ensure you are receiving accurate and precise results and predictions. Stay organized by utilizing templates and invoices. 

Utilize Templates and Invoices 

Utilize templates and invoices to keep track of all expenses, and time for your business while forecasting. This will allow you to ensure your business is successfully running while having the necessary resources to reflect back on. When you are in the middle of a forecasting princess, you will have the resources available to quickly refer to, and minimize the amount of time and money spent on forecasting. This leads to quicker results, and answers regarding how you can better your business and increase sales, clients, and customers.

A wire transfer is the electronic transfer of funds from one bank to another. Businesses or individuals who are sending large amounts of money typically send wire transfers. When an individual would like to send a wire transfer, they send it through the bank that the money is leaving.

Wire transfers can be sent regardless of your location — city, state, and country. They are considered to be a fast, and safe way to send large sums of money from bank to bank. If you are sending a wire transfer within the U.S. it typically takes up to 24 hours to send. It is important the wire transfer is initiated before a specific time if the sender would like the receiving bank to receive the funds within the same day. Otherwise, international wires may take 2-5 business days.

How Does a Wire Transfer Work?

When transferring funds through a wire, one bank is communicating to another bank or financial institution. By communicating data with the help of a communication network, funds are able to be sent, received, and exchanged. Common networks used are the Society for Worldwide Interbank Financial Telecommunication and Fedwire. These are trusted networks that allow the transfer of funds between banks. 

Most wire transfers can be submitted online. However, some prefer to go into their bank to send a wire. While issuing a wire, the following information regarding the receiving bank will be input: the name, the total amount being sent, and the bank account and routing number. Once the receiving bank or institution receives the transfer, normally an employee will need to review and confirm the wire transfer before it enters the account of the receiver. 

What is an ACH Transfer?

An ACH transfer is also an electronic transfer between two banks. ACH transfers are usually smaller amounts of funds that are being exchanged and typically consist of direct payments and direct deposits.

What is the Difference Between Wire Transfers and ACH Transfers?

While wires are transferred through financial networks, ACH payments are transferred through a clearinghouse. What this means is— a separate agency, corporation, or software is utilized in the midst of the transfer. In other words, a third party is used to transfer the funds and is usually considered safe, depending on the clearinghouse. ACH transfers may take longer to transfer than wires; however, they are cheaper. 

Are Wire Transfers Safe?

Wire transfers are considered to be safe when done correctly. Ensuring you have the receiving party’s correct information is very important. While sending a wire transfer, if any of their information is input incorrectly, you run the risk of sending the funds to the wrong person. If this occurs, once the wire transfer has been initiated, there is no way to cancel the movement of funds. The funds are normally delivered to the receiver’s bank account immediately upon sending a wire transfer. 

Wire transfers can only be sent by the initiating party, or the sender. Funds cannot be taken out of a bank by the receiving end when completing a wire transfer. The money can only be transferred if it is being sent by the bank that possesses it. 

How do I Submit a Wire Transfer?

Submitting a wire transfer may require you to go to the location of the bank that is holding the funds you are sending, where an employee will assist you with the wire transfer. Some banks allow you to submit a wire online. Steps may vary depending on the financial institution you bank with, the receiver’s financial institution, and the country the funds are moving to— if an international wire transfer were to be submitted.

Though the steps of a wire transfer may vary, here is typically how the process of submitting a wire transfer works: 

1. Collect the Necessary Information

Sending a wire transfer requires you to know specific information regarding the bank that is receiving the funds in order for the money to safely reach its desired destination. We will go into detail below about what information regarding the receiving end is required. Additionally, the bank will require you to provide specific information to verify your identity. The following list should be considered and thought over prior to submitting a wire:

• • Sender and receiver account numbers 
  • Sender identity verification 
  • Sender’s contact information 
  • The total amount of funds being sent 
  • The date you are sending the wire

2. Determine How You will be Sending the Wire Transfer

If you are submitting a wire transfer online, it will walk you through the steps to submit it. At some point within the process, a fee will be required. To ensure your wire transfer was successfully submitted, you can call the bank for confirmation. Otherwise, you may go into the bank institution where employees will ask you a set of questions regarding the wire transfer and submit the wire transfer for you. The wire transfer fee will also be paid at this time. Depending on the institution you bank with, and the accounts you have open with them, wire fees may be waved. 

3. Submit the Wire Transfer

Once the wire transfer has been submitted, ensure you receive either a paper copy or an electronic receipt. Some banks will require another employee to review the wire transfer before finalizing the submission. Once the wire transfer submission is finalized, it is important to check with the receiver to make sure they have received the funds. 

What Information is Required to Send a Wire Transfer?

A wire transfer cannot be submitted unless the following information regarding the recipient is provided:

• • Full name & address 
  • Bank name, phone number, & address
  • Bank account number 
  • Account type 
  • For domestic transfers – Bank ABA routing number 
  • For international transfers – Bank IBAN and BIC/Swift Code

As previously mentioned, you will need to know the amount of money you will be sending and may need to consider currency conversions if you are submitting an international wire. For security purposes, the bank may ask the reason for the wire transfer. 

What is an ABA Routing Number? 

An ABA routing number is a 9-digit number for U.S. banks to identify bank accounts. 

What is an IBAN?

An IBAN is a code used by international banks. It is made up of a set of 34 combined numbers and letters. This set of numbers and letters help indicate the country and branch location of the wire transfer. 

What is a BIC/SWIFT code? 

A BIC or SWIFT code is a code that represents a specific bank branch. It is used for international wires as well. 

What are the Pros and Cons of a Wire Transfer?

While many individuals prefer wire transfers because of their pros, there are also cons to wire transfers. Let’s take a look at the pros and cons of transferring funds through a wire transfer. 

Pros 

• • Funds are immediately transferred
  • Ability to safely transfer large sums of funds
  • Able to send funds internationally
  • Considered safe

Cons 

• • Can become costly 
  • Maybe timely 
  • Cannot be reversed or canceled after submission
  • Scammers may ask for a wire transfer

Depending on your preference and needs, wire transfers may be best for transferring funds. If you are trying to transfer funds from a U.S. bank to an international bank, wire transfers are the only option. Additionally, ACH payments restrict the amount of money you can transfer, leaving wire transfers the only way to transfer large payments. Businesses usually resort to wire transfers when transferring large amounts of money. 

One major con of wire transfers is scammers may attempt to request a wire transfer from you. Scammers will alert you about a false, large payment that is due and give you their information. Once the money is sent, there is no way of getting it back. 

How Long Does a Wire Transfer Take?

Wire transfers that are being sent from a U.S. bank to another U.S. bank can take up to 24 hours. International wires may take up to 5 days to transfer.

Here’s why:

1. When the Wire Transfer was Initiated

The Expedited Funds Availability Act (EFFA) promotes wire transfers to be available within one business day of its submission. Though this is required, banks have cut-off times for wire transfers. This is because the receiving bank is expected to look over the transfer and can’t do so if they are closed. For example, if a wire transfer is initiated on a Monday at 5:00 p.m., but the receiving bank closes at 5:00 p.m., the receiving bank will not receive the funds until Tuesday. Furthermore, wire transfers that are submitted on weekends and on federal bank holidays will not be received until the following business day. 

2. Where the Wire Transfer is Being Sent 

U.S. wire transfers can be received immediately or may take up to 24 hours. While U.S. domestic wire transfers are expected to be completed within 24 hours of submission, international wires between U.S. banks and banks within other countries can take 1-5 business days because of different time zones, banking systems, and foreign currencies.  

3. How the Wire Funds are Transferred

There are several different ways a wire transfer can be processed. One way is by utilizing a service known as FedWire. This is an immediate transfer that consists of a large amount of money or is a transfer that involved a time-sensitive situation. CHIPS is utilized when a bank needs to send multiple wire transfers for net settlement. Lastly, the Society for Worldwide Interbank Financial Institutions, also known as SWIFT, is used for international wire transfers. 

How Do You Track a Wire Transfer?

If you sent the wire to the right account, you will be able to track the wire. On the other hand, if the wire transfer is sent to the wrong account on accident, the wire transfer will not be able to be tracked. 

It is possible that the wire transfer may be delayed or lost. Fortunately, if the wire was submitted correctly, you will be able to track the wire transfer. When a wire transfer involves a U.S. bank account, they are assigned a tracking number known as IMAD/OMAD ID. This tracking number is provided to the sender once the wire transfer has been submitted. 

If a domestic wire is submitted and it takes over 24 hours to send, you can ask your bank to track the wire using the IMAD/OMAD ID number. The same goes for international wires that have not been sent within the 5 days of submitting the wire. When tracking the wire transfer, it will provide you with details regarding when and how the transfer was processed. This includes all ends of the transfer — the sender, receiver, and banks involved. Lastly, it shows where the wire transfer currently is in the time you track it.

What is a Domestic Wire?

Domestic wires are transfers that occur within the same country. It is when funds are transferred from one bank to another within the same country. Typically, they can be delivered immediately upon sending, and can take up to 24 hours for the receiving bank to receive the funds. Furthermore, domestic wires are cheaper than international wires. Depending on the institution you bank with, domestic wires can cost anywhere from $0-$35 per transfer. Some banks may allow you to send wires online at a cheaper price. Alternatively, going into the bank to send a wire can become costly. 

What is an International Wire?

International wires are transfers submitted from one country to another. Funds are sent between two different countries, normally costing anywhere from $35-$50. Because of security reasons, the wire transfer can take anywhere from 1-5 days. Similar to domestic wires, submitting a wire online may be cheaper than going into the bank to send an international wire. Additionally, there may be foreign currency conversion fees. Some banks also perform additional security steps prior to sending the wire. These banks will check the wire transfer before actually sending it. 

How Do I Cancel a Wire Transfer?

You cannot cancel a wire transfer once it has been initiated. However, if the receiving bank gets a cancellation notice before the transfer, they may be able to stop the transaction. Furthermore, if a mistake is made by one of the banks involved in the wire transfer, the bank can cancel or edit the transfer that has been completed. 

How Much Does a Wire Transfer Cost? 

Because of the process and precautions, sending a wire transfer can be costly. Sometimes the receiver of the wire transfer may also have to pay a fee. The fee will depend on the bank’s policy, the location of the receiver, and the amount of the funds being transferred. 

Here is how much wire transfers cost on average:

• • Domestic outgoing wire transfer – $26.00 
  • Domestic incoming wire transfer – $15.00
  • International outgoing wire transfer – $45.00
  • International incoming wire transfer – $15.00

While receiving a wire transfer is normally free, sometimes a small fee is required to complete the transfer, or calculate foreign currency. 

Are Wire Transfers Reported to the IRS?

Wire transfers are monitored by many international organizations. The IRS can see any wires that are transferred within the U.S., or to and from the bank accounts of U.S. citizens. Wire transfers may be flagged by the IRS for the following reasons:

• • Transfers that have a pattern
  • Extremely large amounts being transferred 
  • Transfers made to individuals who do not have a personal or business bank account

Are there Wire Transfer Alternatives? 

There are many ways to electronically transfer money from one bank to another. ACH transfers are a great alternative to wire transfers. The following ways are methods you can use to electronically transfer funds:

• • PayPal
  • Zelle
  • Venmo
  • Transact

Money orders and checks are also an option for when you need to send money, however, they are less secure than the above-mentioned methods.