Business Information for Entrepreneurs by an Entrepreneur

Whether you purchase raw materials, a delivery service, or even wholesale products, you have the business responsibility to get the best value from your vendors, while saving the most money for your bottom line.

Of course, this does not mean you should short-change your vendors. However, if you have a long relationship with a supplier, or even if you make large and frequent purchases from a single vendor or two, you should re-evaluate your business arrangement. However, how do you renegotiate terms and keep the relationship healthy? It's not easy asking for discounts or more services for free.

Here are a few tips to keep in mind when renegotiating with your important vendors:

Be Honest

Be up front with your vendors and business partners about the reason you want to negotiate. If you simply tell them you want a better deal without a reason, you are likely to start out your negotiations on a bad foot.

Instead, explain the reason, be it that you have slashed your budget in order to stay afloat, or you have lost a big contract from another client, or even that you feel the vendor is not living up to its part of the deal.

Set Your Goals

Let your vendor know what you want or need to accomplish. Your goal may be to simply keep your budget in the black in order to stay in business. Or you may want to try assembling a product in a different manner. Letting the vendor know what you need may help them help you.

Be Creative in Your Negotiations

Being creative in the "give and take" process of negotiating will likely deliver better results. For example, you may not need two weekly deliveries, and by consolidating the delivery into one weekly visit, perhaps the vendor could provide you a discount. Perhaps by ordering another product with the vendor, you could enjoy better discounts across the board. If you can find ways to be creative in your negotiation, you will find that your vendors will be more likely to bend in your favor as well.

Use these brief tips as a guideline for getting the most from your suppliers or vendors. Remember, you want to work out a deal that is most beneficial to both you and your vendors.

Your small business can earn significantly more revenue if you accept credit cards from your customers. Though taking credit card payments increases your ability to accept payment from customers or clients, it also means paying a premium for the convenience. What are the considerations you should keep in mind when opting to set up a credit card merchant account?

First, what is a merchant account? Having a merchant account requires you to work with a credit card processor who handles the actual gateway between your customers' credit card, your bank, and Visa & MasterCard (and Discover and American Express, if you so choose).

Conduct Your Processor Research

The first thing to consider before making a final decision on a merchant account is do plenty of research. Compare different credit card processors, especially on the basis of the other considerations noted below. Since you may be required to sign a term contract, you certainly want to be sure you're getting the best deal.

Check the Fees

Ultimately, you want to keep as much money as you can through a credit card transaction. Knowing the fees you must pay, as well as your average transaction amount, will help you determine the best deal.

For instance, you will almost always be required to pay a percentage fee, or interchange fee, that goes directly to Visa, MC, or other credit card company. Generally, the interchange fees range from about 1.9% to 3% based on your total monthly sales. In addition, you will pay a set per-transaction fee directly to the processor, generally around $0.25 to $0.30 per transaction. This is the best pricing structure.

However, beware of other processing companies that charge 'hidden' fees like downgrade fees, address verification fees, statement fees, gateway fees, and other fees that reduce your total net revenue.

Also, avoid if possible any processor that keeps you on a term contract and charges you an outrageous "cancellation fee" of hundreds to thousands of dollars because you simply dropped them as your processor.

Should You Process through PayPal?

Many small businesses do very good credit card business through PayPal. Their commercial merchant accounts allow businesses to accept credit cards over the internet through an online store, over the phone, in person. In many instances like online payments, it is a hands free process for you. PayPal handles the transaction and procures the payment information from your customer. Alternatively, you can take accept credit cards from your customer and enter it manually through the PayPal online processing gateway.

Their fees are reasonable ($0.30 per transaction, plus 2.2% to 2.9% of total monthly sales), but they do charge an additional $30 per month to take advantage of their system. If you do a considerable amount of credit card transactions each month, then this could be a good system for your small business.

Prior to the new Health Care Reform law of 2010, the U.S. had no law requiring employers to provide group health coverage to employees. Most employers choose to offer health care options to their employees as an attractive benefit to recruit the best talent. Currently, most Americans, about 60%, get their medical coverage through their employer.

However, the new 2010 legislation does add some compliance issues that small businesses should take to mind. Here are some important considerations.

Health Insurance No Longer a "Benefit"

Employees looking for jobs often take into consideration the health care coverage a potential employer offers, including medical, dental, vision, disability, and even long-term care. These types of benefits make providing for oneself and family much easier and were a great 'carrot' to offer new hires.

With the new law, most small businesses will have this added benefit to offer employees, making the perk a diluted and expected portion of total compensation. Since health care will be more readily available, medical benefits will not be the perk it once was to potential new hires.

Mandatory Health Insurance Coverage

The new law dictates that businesses with 50 or more full time employees must provide medical coverage options or be hit with government fines. If you fit this category and currently do not provide group medical coverage to employees, you have some time to do your research to find a good medical carrier with decent rates and programs.

If your company has fewer than 25 employees, you may have an easier time. You will not be required to provide medical coverage, but you can apply for temporary coverage subsidies for employees with lower incomes. Additionally, any size small business may be eligible for additional tax incentives and subsidies for providing health care coverage.

The new health care reform law will not take full effect until 2014. You have time to make necessary changes or additions to your employee group medical plans that can help make it a more attractive recruitment tool than your competition.