If you’re thinking of switching to VoIP service from a traditional landline based Key, PBX, or hybrid phone system, you’re not alone- businesses of all sizes are beginning to realized the cost-saving benefits of computer/telephony integration. Switching to a VOIP phone is relatively simple- changes can be made quickly and easily, and there is usually very little equipment to purchase.
Whether you’re switching to a business VoIP service or implementing a phone system for the first time, here are a few things you need to consider:
Internet Connectivity
VoIP phone systems use the internet to make and receive calls- you’ll need to make sure your connection and your power supply can support system requirements. Generally, a steady, uninterrupted power supply and a high-speed internet connection are all that’s needed. Your connection should be able to support the added traffic that the system will create. Vendors will ask how many employees will be using the system, how many calls are placed daily, and take into consideration features like auto attendant and call transferring when setting up your internet connection to support your system. You may need to purchase additional routers or install a backup power supply.
VoIP Adapters
If you’re witching to VoIP from a traditional phone system, you can save by purchasing adapters for your current phones. A traditional phone fitted with a VoIP adapter works identically to a VoIP phone. Most adapters are less than $50 each, and are often available in bulk discounts for larger offices. In lieu of adaptors, you can also purchase VoIP phones, headsets, or microphones that can be connected directly to a computer and used in place of a traditional headset. Most business and residential VoIP service providers sell both VoIP-compatible phones and adapters.
VoIP Phones
Voice over Internet Protocol phones are slightly more expensive that VoIP adapters, but are a good investment if you plan to use the system for several years. VoIP phones are easy to use and install- they don’t take any special training to set up. Once installed, they work identically to traditional phones. Most VoIP phones cost at least $100 each, with many vendors offering steep discounts for phones purchased in bulk.
Switching to a VoIP system takes surprisingly little time. Once you’ve decided to make the switch, you can shop around for providers and compare prices for services and equipment. Most providers can also make suggestions about system configuration (i.e., if you need a faster internet connection) during this stage. Once you’ve settled on a service provider and purchased equipment, you can have the new system up and running in less than a week.
About the Author
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.
Category: Operations
Merchant cash advance transactions are big business. In the past few years, the industry has grown from a few providers to what some predict will be an almost 10 billion dollar industry. Search engine results for “merchant cash advance” produce literally thousands of provider results. How do you wade through all of these providers to find the right one for your business? How do you get the best deal? Here’s a quick guide to a successful merchant cash advance transaction.
Only “merchants” can apply. A merchant is someone that owns and operates a business that performs credit card processing functions as a way to accept customer payments. Providers have different requirements regarding the length of time you need to be in business- many also require a certain sales volume for approval. Generally, you’ll need to have at least a few thousand dollars in credit card sales to qualify for a cash advance transaction.
You have to qualify. Cash advances have become a popular method of financing because the approval process is fast and easy. But be careful- just because you’re “approved” doesn’t mean you’ll be able to repay the advance according to the agreement. Many unscrupulous providers have been known to approve businesses they know won’t be able make repayments as scheduled in order to collect the fees and penalties associated with defaulting.
Service agreements set the terms. Once you’re approved for a business cash advance, the provider will send you a service agreement with all of the important information- your advance amount, the “safe” retrieval rate (based on your daily credit card sales volume), and advance fees should all be included in this agreement. Since a merchant advance isn’t a loan, it isn’t subject to lending or usury laws- providers can basically charge whatever they want for services, up to 50% or more of the advance amount in some cases. Be extremely wary of agreements with fees that kick in if sales volume drops below a certain amount (called daily minimum fees) or “balloon” repayment clauses that require payment in full if certain conditions are or are not met.
Repayment is taken from daily sales revenue. You begin repayment the day you receive your advance check, much like a traditional loan. Before you take out an advance, you need to make sure that your current sales volume is able to support the repayment structure specified in the agreement.
What happens next? If you repay your advance according to the agreement, everything is fine. Repayment is usually quick- you should have the advance balance paid off within several months of initiating the transaction. The service agreement governs potential defaults- most agreements contain some kind of a “balloon” repayment clause (see above) or give the provider the authority to place a lien on business equipment or property if you can’t pay back the advance. Providers have also been known withdraw money straight from a business checking account. Before you sign the service agreement, you need to make sure that you know exactly what will happen if you can’t repay the advance according to the terms.
Here’s a tough question: What’s the one thing nearly all business owners consistently overpay for?
The answer is pretty surprising: Postage costs. Stamps, shipping charges, even the time it takes to go to the post office can all add up, costing thousands of dollars or more each year, depending on the volume of mail you ship. Most business owners don’t know exactly how much it costs to mail a particular parcel- so they end up “over stamping” and overpaying- often by quite a bit. Postal stores and shipping providers have overhead costs to meet, too- you pay for these when you’re charged to ship an item.
You can avoid overpayment- and create big savings- by using a postage meter. A postage machine, or digital mailing system, can calculate postage costs precisely, so you’ll never overpay, and can be used in-office, saving you trips to have packages shipped from other providers. Here’s a quick guide to using a postage meter:
How meters work
Postage meters are leased, and work similarly to a parking meter. You “fill up” by making a payment, and postage charges are drawn against your balance. Most meters allow you to “refill” when necessary, and some calculate monthly charges and send a bill- similar to paying for electricity costs. In addition to paying the postage charges, you’ll also need to lease the equipment. You can choose machines with advance features (scales, document feeders) or a simple stamp machine that just prints postage stamps on your outgoing mail.
Features
Mailing machine equipment can be very simple (a stamp machine) or very complex- some machines fold, collate, stamp, and stack bulk mailings containing several different printed pages. If your business sends large bulk mailings, you could benefit from such a machine. Machines can also be fitted with equipment to ship packages- you’ll weigh the parcel and arrange for the pickup online in a few simple steps. No matter which features you need, you can take advantage of cost savings- with a postage meter, shipping costs can be calculated down to the penny for each mailing, so you’ll never overpay.
Costs and billing
Equipment leasing costs can range from less than $20 a month to hundreds for sophisticated equipment designed to handle large volume mailings. You’ll pay for the postage machine equipment (the meter) as one bill, and pay postal charges according to current rates. Some meters only allow you to “pre-pay” postage charges, while other companies allow you to “pay as you go,” where you receive a bill for both postage and meter use costs at the end of a specified period of time. Pay-as-you-go options usually carry additional charges or fees.
You’ll generally sign a lease contract that specifies your terms of use for the meter. Longer term lease contracts can be significantly less expensive- if you’re willing to commit to a longer period of time using the equipment, you’ll get a better monthly rate. You can also choose to purchase a maintenance or service contract that covers repairs or part replacements over the life of the machine.
According to Forbes Magazine, businesses that don’t accept credit cards lose as much as 70% of sales to competitors who do allow this method of payment. With the number of Americans that use credit cards to make purchases increasing every day, you can’t afford to lose this many potential customers or clients. Here’s a quick and easy, real-world tested guide to accepting credit cards:
Merchant Accounts: The Basics
The merchant account is the “middle man” between a credit card account and a business’ bank account. Businesses that only process cards online usually use gateway software that collects credit card information, where retail businesses typically use credit card swipe machines. Whichever method you use, it’s necessary to have a merchant account to collect the information, verify it with the customer’s credit card provider, and make the transfer of funds from their account to yours. Merchant account providers often “bundle” the costs of online processing software into the account service costs.
Billing
Generally, merchant account providers will assess a fee for each transaction, whether a sale or a return (a “chargeback”). These fees are a portion of the transaction amount or a specified dollar amount. Many companies require monthly minimums, and will charge your business the remaining amount if this minimum is not met. Billing occurs automatically, as each “batch” of transactions is processed, typically at the close of each business day. Vendors provide reports detailing transactions, charges, and payments made at specified intervals.
Transaction Types
The fee assessed for each transaction typically depends on the way the sale or return is recorded. Swipe machines or those with signature capture devices carry the lowest risk of fraud, and thus transactions are less expensive to process. Online transaction s or those that are “keyed in” are typically more expensive, depending on the security measures taken to record the transaction. Vendors assess higher fees for “chargeback” or return transactions.
Service Contracts
Most businesses sign a service agreement that covers a specified period of time. Canceling your account before the service term expires generally carries penalties and fees, much like breaking a lease. Your per-transaction and monthly minimum rates are set when you apply for an account and sign the service agreement. The best rates are reserved for those businesses with a stable financial history and high credit card sales volume- many vendors offer “tiered” rate structures, where the per-transaction rate decreases the higher your sales volume rises. Though newer businesses just starting out might not be eligible for the best rates right away, they can negotiate for better terms as the business becomes more profitable.
Equipment and Software
Credit card processing equipment and software costs are often included in the service contract you sign with a provider. If you own or manage a retail store, chances are you’ll only need hardware, such as a swipe terminal or a signature capture device. Businesses that sell products online can puchase “gateway” software that is billed along with the merchant account service bill. Credit card terminals can be purchased, financed, or leased. It’s always a good idea to ask if there are any discounted models, or if a certain model is included with an account agreement.
Choosing an Account Provider: Where to Start
The most popular places to find a merchant services provider are through referral or using a vendor match service. You can consult businesses similar to yours in terms of size and sales volume: Ask who they use as a provider, if they are satisfied with the service they receive, and if they have any particular recommendations. A vendor search service allows you to compare several different companies, ask for quotes, and choose a vendor based on your requirements. Make sure you compare several different merchant account providers before signing a contract for services.
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.
Article Contributed by Tony Massaro
Do you really have a handle on the things that cost your business money? Are you as prepared as you need to be to handle incidents? Do you know how to improve your bottom line in this tight economy?
Projections for the rest of 2009 are not good. Job shops aren’t getting orders and they’re failing to hit their production run projections. Schedules are being pushed off a couple of months.
So, how should you spend the rest of the year if you want to remain profitable? As tax partner at Porte Brown LLC, an Elk Grove Village accounting firm that serves privately held businesses, I suggest you:
– Thoroughly review your business processes
– Become willing to reinvent the business
– Get aware of Lean Manufacturing principles, even if yours is a service business
Why You Need to Evaluate Your Business Now
The processes and structures that worked before may not work now in this new economy. You may need to develop new processes or adapt existing ones to meet your immediate needs. For example, your business may benefit from:
– Regular management or employee meetings to report on the status of business activities.
– Tracking systems to ensure that customer requests are received, assigned and fulfilled. Now is the time to improve customer service and increase customer loyalty.
– Quality control processes to ensure that the same high level of customer satisfaction is maintained.
– Incorporating budgeting procedures to ensure that costs are controlled, properly allocated, and charged back to the client, if appropriate.
– A defined process for monitoring receivables and collecting on accounts that become past due.
How to Effectively Evaluate You Business
When you evaluate your business, you want to avoid becoming part of the problem. You want to look out for self-fulfilling prophecies. I’ve seen it thousands of times with my clients –When it’s all gloom and doom, people start pulling back. This automatically leads to even more gloom and doom.
Here’s what you should do instead…
1. Take a fine-tooth comb to your business and make sure your processes are right. Put all of your processes into a flowchart. Look at everything you make. How can you do it better? Can one person do two machines?
2. Look at your industry’s best practices including: lean manufacturing, accounting and marketing. This is the time to align your business processes so your operation is more effective and more profitable. If you follow this tip, you will minimize waste and reduce inventory.
3. Get a handle on which operations are making you the most profits. If you have three different products, or services, put the costs and profits down on paper so you can see them. Allocate sales costs, labor, overhead and other items and then determine which services or products are profitable.
Ultimately, the review may mean you reinvent your business. And, don’t be afraid of reinventing your business.
Why You Shouldn’t Fear Reinventing Your Business
America has reinvented itself several times. You, as a business owner or executive, must do the same thing. You need to evaluate what your business does and reinvent it so you can compete during this down economy.
A review inevitably means decisions. Often, those decisions will involve people. I’m a big advocate of reacting fast. If you feel overstaffed and there’s no light at the end of the tunnel, then somebody has to go – as distasteful as it is.
You often can build back up with temporary help. Temps are good because you can send them home when business tails off again.
What You Should NEVER Cut
When you’re evaluating your business and making necessary changes, there is ONE thing you should not change. Do NOT cut your marketing budget. Cutting marketing and advertising is the wrong thing to do when times slow. You’re already concerned about the lack of new customers. So, if you cut your marketing budget, how do you expect to get more new customers into your sales funnel?
Instead, you should be looking at your business processes and systems. Find out how you can run your business more efficiently and more effectively.
By following these tips you can increase your bottom line, even during the recession. And, if you need help – don’t be afraid to ask the experts!
About the Author
Tony Massaro, CPA and Partner of Porte Brown LLC, helps small to medium sized business owners evaluate their business and improve their bottom lines even in a slowing economy. To discover how you can remain profitable simply by reviewing your business processes and analyzing how you can manage a more effective and efficient business go to: http://www.portebrown.com