Business Banking E-Newsletter - October 2010

Making Your Business Credit Card Friendly

Five things you need to know

Sure, some businesses are cash-only and do just fine -- the local ice cream parlor, the greasy spoon diner down the street, the flea market that's been around for a century. But these days, in a nation where floating on credit is as American as apple pie, you've got to take plastic.

While they require some infrastructure upgrades and come with annoying fees, it has become increasingly difficult to run a full-fledged business -- especially in retail -- without accepting credit and debit cards. But despite the drawbacks, the added convenience for customers could lead to bigger purchases at the register. "You want to be accessible, and you want to broaden your opportunity to close the sale," says Greg Hammermaster, president of Sage Payment Solutions, which helps more than 140,000 businesses and organizations accept electronic payments, including credit and debit cards, electronic checks, gift cards and automatic recurring payments.So how can you make your business credit card-friendly? Here are five things you need to know.

  1. Apply for merchant status.
    What is merchant status? The term means you can be entrusted to allow customers to pay you with a MasterCard, Visa, American Express and the like. So why shouldn't they trust you? Well, maybe trust isn't the right word, but credit-card issuers like to see that their merchants are as creditworthy, or more so, than their credit-card users. If, say, an identity thief uses somebody's card to buy a lot of merchandise, your business is going to be on the receiving end of a chargeback -- a transaction that the bank is going to send back to you. So if the aforementioned identity thief makes off with $532 in merchandise, the bank is going to take that from your company's checking account. When you apply for merchant status, in many ways you're proving that you are financially stable. If you're not sure where to apply, your bank is a good place to start. And even if they don't offer credit cards to merchants, they can likely point you in the right direction.
  2. Get your paperwork ready.
    Exactly what documentation you need will be spelled out on any application you fill out, but generally we're talking about references from anyone you've worked with, your financials from the last couple years (if it's a brand new business, you may have to supply your own checking account information), your business plan, possibly your resume or CV (curriculum vitae) -- just about anything you can think of is likely something the lender has thought of and will want to see.
  3. Expect fees.
    You probably know this already. Interchange fees, also known as swipe fees, have been in the news a lot lately. In a tough economy, some business owners have voiced their objection to the high cost of interchange fees, and Congress has moved to limit how much credit-card and debit-card providers can charge. But what you may not know is that having bad credit can affect how much your interchange fees are. "Typically, you'd get 2 percent, but if you have bad credit, your interchange fee might be 2.5 percent or 3 percent of the purchase," Hammermaster says.
  4. Set aside a security deposit.
    Because of the possibility of the aforementioned chargebacks, you'll likely have to put down a security deposit to ensure the credit-card issuer the money is there if you can't eat the costs of these nefarious charges. If you're selling furniture or computer equipment, the deposit may be pretty significant -- like $10,000 or more, suggests Hammermaster. If you're selling baby clothing or some other item that retails for a low price, you may only be looking at several hundred dollars.
  5. Remember the equipment.
    The tools come with a price, and that price can vary quite a bit. If you really want to go cheap, there are some manual card printers -- where you have to place a phone call to the credit-card company and ask for an authorization number in order to accept the charge -- that go for as low as $22. But an electronic terminal can run anywhere from $150 to $600 and more, depending how sophisticated it is. For instance, do you want the transaction to be fast, so your customers aren't tapping their fingers? Can the printer print custom receipts with your logo and upcoming store promotions? One thing to keep in mind is that a card swipe is the final step in the customer experience, so it may not be the best place to pinch pennies. A higher upfront cost now could pay dividends in the long run.

How to Bring Out the Leader in Each Employee

If you're a business owner with a team of employees, you are a business leader. Good leaders understand the link between happy and fulfilled employees and satisfied customers and clients. Your employees can be a goldmine of good ideas and creative energy, as well as your strongest resource, provided you empower them to be leaders themselves.

Here are some ways you can bring out the leader in each of your employees:

  • Be an Encourager.
    Employees often have fresh ideas or suggestions, but may not voice those ideas because they don't feel their manager is interested in hearing what they have to say. Encourage your employees, regardless of their status within your business, to contribute their ideas. Even if you decide an employee's idea won't work, thank them for their suggestion and encourage them to continue suggesting new ideas.
  • Get Everyone Involved.
    Leaders who aggressively solicit ideas from their staff usually find that doing so improves morale, which in turn creates positive change within the business. Strive to foster a climate of openness within your business. Attempt to engage your employees in the innovation process, and reward them for their input with verbal thanks and positive encouragement along the way.
  • Get to Know Each Employee Personally.
    It's impossible to motivate employees without first getting to know them. Make a point of having a one-on-one meeting with each member of your staff. Once you start to gauge the strengths of each member of your team, you can help them develop leadership capacities that suit those strengths, as well as strategies to improve upon any possible weaknesses.
  • Reward Great Ideas.
    It's important to acknowledge and reward employees whose good ideas help lead to positive changes. You may consider establishing an award or giving a gift of recognition. Then, get out of the employee's way and let him or her lead the development opportunity (with your support).
  • Find Their Motivation.
    Learn to recognize what motivates each employee, and encourage those things in each of them. This will coax your employees to become leaders instead of followers. With a little perseverance, your team will begin to work collaboratively to lead the business to success.
  • Develop a Sense of Urgency.
    To make leaders out of your employees, each must believe that they have an urgent and worthwhile purpose within the organization. Establishing a sense of urgency and direction will help them know what your expectations are, and prompt them to take on a more meaningful role in the company today.
  • Keep Your Employees Informed.
    Praise your employees for what they're doing right, and inform them about what they could be doing better. Challenge each of them to be the best they can be. Keeping your staff informed will foster respect and help them better meet your combined goals.
  • Provide Positive Feedback.
    Reinforcement encourages employees to develop their skills to their maximum potential. Use your leadership tools — coaching, counseling, and mentoring — to help motivate them. And walk the walk as much as you talk the talk. Failing to lead by example can foster resentment and lead to low morale.
  • Allocate Decision-Making Power.
    Empower your employees by giving them the ability (within reason) to make key decisions relating to their jobs and duties. The more faith and trust you place in them, the more likely they will be driven to succeed and to impress you.

Using Facebook at Work

The new threat to watch out for

As social networking sites gain popularity in business environments -- as marketing tools as well as among employees goofing off on the job -- their use by malware to launch attacks is growing, too.

One marauding program called Koobface masquerades on Facebook as e-mail from friends, directing a user to an outside site. Once opened, Koobface takes up residence on the user’s computer, capturing keystrokes in order to nab credit card numbers, faking virus attacks then offering to disinfect the computer -- for a fee, of course -- or otherwise committing mayhem.

Messages telling users there are viruses on their computers typically look like the real thing from Microsoft. One fake-cleanup gang was finally caught last year after doing an estimated $100 million in business.

Note that nearly 30% of corporate computer users admitted to checking social network sites while at work last year, up from 15% the year before. “Essentially, users are volunteering to be infected,” says David Perry, global director of education at Trend Micro Inc., a provider of Internet-security software.

And “once infected, the bad guys have control over your system and browsing activities,” notes Jamz Yaneza, threat research manager at Trend Micro.
Moreover, the malicious software -- or botnet, as such software is called -- keeps evolving, making it difficult to control.

The malware isn’t confined to Facebook. Koobface also has appeared on MySpace, Friendster, hi5, myYearbook, Tagged, Bebo, Netlog, fubar and Twitter accounts.

To protect yourself, consider using software that will proactively block employee surfing to malicious sites. Prices for blocking software vary by size of installation, but run less than $70 for a three-computer network. In addition to Trend Micro, providers of blocking software include Symantec, McAfee, Microsoft and Computer Associates.

Greening Your Small Business

Go beyond the hype to find a plan that works for you

As “going green” continues to dominate the political and consumer agenda across the U.S., it’s actually easier than you might think for small business to make a difference and “do its bit” for a greener America.

Small businesses make up half of the nation’s private workforce and likewise consume half its energy sources. That said, because small businesses possess the flexibility, agility and local footprint that many larger companies do not, as a collective group of business owners they have the potential to be more impactful.

But knowing where and how to make an impact is core to any green business strategy.

The good news is that there are many online resources that can help small businesses go beyond the hype to understand the strategic and tactical steps they need to take to comply with environmental regulations and develop a true sustainability plan that works for them.

Start with a Strategy: Reduce, Reuse, Recycle

  1. Reduce – focus first on monitoring and reducing waste, then usage. Turn to your utilities for advice as well as sources like
  2. Reuse - focus first on disposables then on consumables. Ask yourself: “if my business could not throw anything away, or buy anything new, how would it function?”
  3. Recycle – focus first on products then programs. It’s not just about recycling it’s about incorporating recycled products into your buying. Talk to your local waste management provider about recycling options and a “waste assessment”.

Implement Your Strategy: Compliance and Sustainability Resources
Moving from a broad understanding of what “going green” can mean for a small business operation, there are many online resources that drill down to how specific business types can implement a green strategy.

From guidance for freight transportation companies to nail salons and more, it’s easier than ever to find the information you need to act on environmental law and best practices.

Here is a summary of government and non-government resources to help small business make the most of its flexibility, agility and local impact to comply with and support green initiatives:

Small Business – Going Green Guides from the Government – has a whole host of resources that help small businesses understand their environmental obligations and features suggested green business practices. This particular guide – “Ten Steps to adopt environmentally-friendly business practices” – provides some important information on implementing an environmental strategy for your business, including steps to becoming energy efficient, compliant with environmental regulations, and a recognized "green business."

Loans for Greening Your Business – Find money to pay for energy efficient upgrades to your business facilities, environment-related projects and improvements, and financial incentives that can save you money such as tax credits, tax deductions, sales tax exemptions, property tax exemptions and rebates.

Complying with Environmental Laws and Regulations – Monitored by the EPA together with state environmental agencies, this guide, again from centralizes a collection of resources available from the federal government that help business understand their responsibilities under the nation's environmental laws. This one stop source covers everything from environmental permits, to waste and toxic management, to FAQs, and more.

Environmental Protection Agency’s Retail Industry Portal – Launched in early May 2009, the Environmental Protection Agency (EPA), in collaboration with the Retail Industry Leaders Association, launched a Web portal to “help prevent and resolve environmental issues at retail establishments”.

Covering everything from compliance and sustainability information for services you provide to your customers to facilities management activities and more, this portal features both compliance and sustainability resources that help retailers meet and go beyond regulatory obligations. - is an online information resource about aligning environmental responsibility with business success. Its Small Business pages offer advice, news and tools.

Like any strategy, going green is long term. But, you can do a little every day – at the very least put a bin in the corner of your office or home office and use it for the surprising amount of paper you perish and try to “remember tomorrow, recycle today”.