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  • Cybersecurity Insurance for Small Business: Is it Worth It?

    Cybersecurity Insurance for Small Business: Is it Worth It?

    Imagine logging onto your work computer one morning, only to be met with a notification informing you that your data has been stolen by hackers. To get it back, you need to pay $100,000. What are your next steps? The answer likely hinges on whether you’re set up with cybersecurity insurance.

    Cybersecurity Insurance for Small Business: Is it Worth It?

    Although many business owners think they’re immune from attacks like this due to their size, there are more than 700,000 attacks against small businesses each year, StrongDM reports. Alarmingly, just 17 percent of small businesses have cyber insurance, and more than half of those that fall victim to ransomware wind up paying the ransom.

    This alone is enough to make most business leaders uneasy but the reality is that ransomware is only one potential threat. Hackers are active. They want your website, financial data, customer data, cash, and more. And, the risks are growing. On this page, we’ll walk you through some of the most common threats, how to determine if your business needs cybersecurity insurance, and information you’ll need to know if you decide to set up a policy.

    Cybersecurity Risks for Small Businesses

    Before we get into cyber risk coverage, let’s take a quick look at what the actual threats are that may impact your business.

    Phishing Attacks

    Phishing is one of the greatest cyber threats to businesses today. It involves tricking your employees into sharing sensitive information such as passwords or financial details. This is often done by sending them an email that looks like it’s from a legit vendor or business partner but isn’t. While many businesses think their firewalls and antivirus software will protect them, 70 percent of files or links containing malware are not blocked by these measures, according to the Cybersecurity and Infrastructure Security Agency (CISA). Moreover, eight in ten small businesses have at least one person who takes the bait in agency assessments, and one in ten people overall executes malicious links or attachments.

    Ransomware

    In a ransomware attack, a hacker prevents you from accessing your data. They may encrypt it and leave it intact on your systems or pull a copy for themselves and delete your files. In either case, the business typically discovers the breach by finding a notice from the hacker directly on their system. The notice informs them of the incident and provides the steps to have the data returned, which usually involves making a hefty payment. Not surprisingly, cybercriminals aren’t exactly known for their code of ethics, so businesses that pay don’t always get their data back. Sometimes, the hacker comes back for a second round, too.

    This presents two major issues. First, the business likely has to report to the government and its customers that their data is now compromised. Secondly, the business has now lost its data. This is concerning because three in four small businesses do not have a backup strategy or disaster recovery plan, NinjaOne reports. This means the data is simply gone with no hope of recovery in most cases.

    Insider Threats

    Malicious attacks like those covered above comprise 55 percent of data breaches, according to IBM. However, hackers aren’t your only threat. Sometimes, those creating the risks for your business are those you trust most. Human errors, such as clicking a bad link or unintentionally emailing data to someone outside your organization, account for 22 percent of breaches.

    IT Failure

    In all, 23 percent of breaches are tied back to IT failure, IBM reports. These can be caused by anything from using outdated software to failing to apply patches in a timely manner or even coding errors.

    Weak Passwords

    More than 40 percent of data breaches involve unauthorized access, meaning someone gains access to a system or information they shouldn’t have been able to. In situations that did not involve a misuse of privilege, such as an IT pro checking out payroll numbers, or an error, 62 percent involve stolen credentials, Astra reports.

    Unfortunately, people make it very easy for hackers to crack their passwords. For instance, the top password of 2023 was “123456.” Most people use the same password for multiple accounts and most never change or reset them either.

    The Cost of Cybersecurity Incidents

    The cost of a cybersecurity incident varies greatly depending on the nature of the incident and the business. For instance, the average ransomware payout now sits at $1,542,333, Varonis reports. But, even if you don’t wind up paying a hacker, you may still be hit with:

    • Data Recovery Costs
    • Consulting and Legal Fees
    • Losses Due to Downtime and Business Interruption
    • Client Losses Due to a Damaged Reputation
    • Public Relations Costs
    • Government Compliance Fines
    • Lawsuits
    • Increased Insurance Premiums
    • And More

    All this can add up to millions of dollars in expenses stemming from a single incident. It’s no surprise, then, that 60 percent of small businesses that experience a cyberattack close permanently within six months, according to The National Cyber Security Alliance (NCSA). Cyber liability insurance can help cover many of these expenses, giving small business owners a practical way to protect their operations from cyber threats.

    What Cybersecurity Insurance for Small Businesses Covers

    Cybersecurity insurance, sometimes called cyber liability insurance, helps protect your business from the costs associated with cyberthreats and data breaches, but what it covers and how it works varies from one policy to another.

    First-Party vs. Third-Party Coverage

    There are two main types of cybersecurity insurance: first-party and third-party.

    First-Party Coverage Protects Your Business

    First-party coverage deals with the costs that directly impact you and your business in the aftermath of a cyber incident. It covers a wide range of expenses to help you get back on your feet quickly, such as:

    • Data Recovery Costs
    • Business Interruption
    • Costs to Notify Customers
    • Crisis Management and PR
    • Cyber Extortion Payments
    • Forensic Investigations

    Third-Party Coverage Protects You from Others’ Claims

    Your third-party coverage steps in when your business is held liable for a cyber incident that impacts others. This typically includes expenses like:

    • Legal Defense Costs
    • Regulatory Fines and Penalties
    • Customer Notification and Credit Monitoring
    • Settlements or Judgments

    What Cybersecurity Insurance Doesn’t Cover

    Cybersecurity insurance is designed to protect you against many potential losses, but it’s not a catch-all. There are gaps and exclusions that businesses should be aware of.

    • Pre-Existing Vulnerabilities
    • Negligence or Failure to Follow Security Best Practices
    • Loss of Intellectual Property or Future Profits
    • Reputational Damage Beyond PR Costs
    • Regulatory Fines Due to Gross Negligence
    • Social Engineering and Fraud Losses
    • Cost of Improving Security After an Incident

    Cybersecurity Insurance vs. General Liability Insurance: What Insurance Covers What?

    Oftentimes, business owners wonder if insurance for cyber attacks is the same as business liability insurance or if their general liability policy covers cyber threats. The short answer is no, you’ll usually need to purchase these coverages separately. Although you may be able to get both types of business insurance from the same company, general liability is usually limited to things like bodily injury, property damage, and advertising injury.

    Cyber insurance is also not typically part of a business owner’s policy (BOP), which typically bundles general liability, commercial property, and business interruption insurance.

    With that said, it’s always a good idea to read through your current policies to see if you purchased a cyber add-on or if some of your coverages may apply to cyber incidents.

    How Much Does Cyber Liability Insurance Cost?

    A typical small business pays $1,740 annually, or $145 per month, for cyber liability insurance, Insureon reports. One-third of small businesses come close to this mark, landing between $100 and $200 monthly, while just over one-third come in under $100, and the remaining group invests over $200 monthly. This is based on a variety of factors, such as:

    • Your Business Size and Industry
    • Coverage Limits and Deductibles
    • Cyber Threat Protection Measures in Place
    • Claims History

    To give some context, a sole proprietor might be able to get $250,000 in coverage for as little as $500 a year, whereas a small business might be able to get a $1,000,000 policy for $5,000 a year or less.

    Bottom Line: Is Cyber Insurance Worth It?

    Whether cyber insurance is a worthwhile investment for your business is a personal choice that only you can make based on your level of risk tolerance. If you’re unsure, ask yourself the questions below.

    Can Your Business Absorb a Major Financial Loss?

    As explored earlier, a single cyber incident can cost a business millions of dollars. While this is more of a worst-case scenario, if your business cannot absorb any kind of significant loss, a cyber insurance policy may be worth it.

    Would a Data Breach Significantly Damage or Close Your Business?

    It’s important to remember that the upfront losses are only part of the equation. How customers view your business after, and the costs associated with making things right by them after an incident, such as credit monitoring and government fines, can really add up. This is why cyber incidents are catastrophic for most small businesses that are impacted by them. If your small business will need help bouncing back, insurance may be worthwhile.

    Are You Required to Have Cyber Insurance?

    Sometimes, cyber insurance is required as part of a licensing process or as part of the requirements for participating in a professional organization. If something like this applies to your business, you will likely need a policy.

    Is it Better for You to Have a Predictable Expense vs. Unpredictable Loss?

    Sometimes businesses can absorb a loss from a cyber incident, but it makes more sense from a budgeting standpoint to pay predictable insurance premiums rather than potentially face a loss of unknown value. If you appreciate the predictable nature of premiums, a policy probably makes sense for you.

    Will Cyber Insurance Boost Trust with Customers or Stakeholders?

    Sometimes, insurance is a selling point. For instance, let’s say that you run a cloud-based software-as-a-service (SaaS) company in the medical industry. Your systems, therefore, host sensitive patient data. Your customers and prospective customers are likely to have more confidence in your software if they know you have an extra layer of protection in place. Equally, leadership and potential investors may feel more secure knowing that your business won’t suffer a major loss in the event of a cyber incident. In situations like these, it usually makes sense to obtain a policy.

    Things to Consider When Setting Up a Cyber Insurance Policy

    Although you can just choose an insurance company and select your coverage, you’ll get a more tailored fit by keeping a few points in mind.

    Your Risk Profile

    Identify your vulnerabilities, data sensitivity, and industry-specific threats to help determine your needs.

    Coverage Types

    Determine whether your business needs first-party or third-party coverage and identify how much coverage you need based on your unique risks.

    Exclusions and Fine Print

    As you review potential policies, keep an eye out for exclusions to avoid surprises if you need to make a claim later. For instance, some policies don’t cover unpatched vulnerabilities, while others won’t cover negligence.

    Deductibles and Premiums

    Higher deductibles mean lower premiums, though you’ll pay more out-of-pocket if there’s an incident. Find the right balance for your business.

    Compliance Requirements

    Find out if you’re required to have specific coverage based on your industry and make sure any policy you’re considering aligns with requirements to avoid non-compliance fines.

    Value-Added Services

    Some insurance companies offer extras such as incident response support, risk assessments, or training programs. These perks can help you avoid issues and be a major source of relief if you experience an issue.

    Add-Ons

    Some plans offer add-ons for things like social engineering or direct cybercrime to cover growing threats like phishing. These can be very helpful for those with larger teams.

    Incident Response Requirements

    Many policies have requirements for reporting and handling incidents. For instance, you may be required to report a ransomware attack within 24 hours. While these aren’t usually dealbreakers when choosing a policy, you’ll need to familiarize yourself with them to ensure you handle incidents in a way that ensures you’re covered.

    Choosing the Right Insurer

    Go with an insurance company that’s known for strong cybersecurity expertise and has a good track record on claims.

    Policy Reviews and Updates

    Set a reminder to review your policy before it renews each year so you can make adjustments to ensure it covers new threats and addresses any changes in your business operations or technology.

    Cybersecurity Best Practices to Reduce Your Premiums

    Investing in cybersecurity is more than just protecting your business; it can also help reduce the cost of cyber insurance. Insurers evaluate your organization’s security posture and risk level to determine premiums. Implementing robust cybersecurity measures can make your business less risky to insure and help you qualify for cyber insurance at a lower cost. Below are some actionable strategies to reduce your premiums while strengthening your defense against cyber threats.

    1. Implement Advanced Network Security Measures

    Insurance providers often assess the level of network security coverage your business employs. Firewalls, intrusion detection systems, and secure VPNs are essential for protecting your computer systems from unauthorized access. By enhancing your network defenses, you can mitigate cyber threats and demonstrate to your insurer that your business is proactive about security. Insurers may offer reduced premiums if your security tools are up to date and configured properly.

    2. Train Employees to Prevent Cyber Incidents

    Even the best cybersecurity tools are only as effective as the people using them. Human error is a leading cause of data breaches and other cyber events, making employee training a critical element of your security strategy. Educating your staff on basic cybersecurity practices, such as identifying suspicious emails, safeguarding personally identifiable information, and using secure file-sharing methods, can significantly reduce risks.

    Beyond recognizing phishing attempts, training should include guidance on secure password creation, safe internet usage, and how to report potential security issues. For businesses that handle sensitive customer information, such as social security numbers or financial data, regular training sessions ensure employees are equipped to prevent errors and maintain compliance with privacy regulations.

    Organizations with well-trained teams demonstrate a strong security posture to insurers, which can lower cyber insurance costs and improve eligibility for network security coverage. Many cybersecurity insurance policies also offer access to training programs as part of their insurance products, making it easier for businesses to foster a culture of security.

    3. Establish a Comprehensive Incident Response Plan

    Having an actionable plan in place for responding to a data breach or cyber attack is crucial. This should include protocols for identifying and containing threats, notifying affected parties, and documenting the event for regulatory compliance. Insurers value businesses with response plans that can cover the cost of downtime and recovery, which can make your business more appealing to a casualty insurance company offering cyber insurance coverage.

    4. Invest in Cybersecurity Solutions and Regular Audits

    Regularly auditing your computer systems and network security ensures vulnerabilities are addressed promptly. Tools such as endpoint protection, encryption, and automated backups provide an additional layer of protection. These measures help manage and mitigate cyber risk, enabling your business to qualify for cyber insurance coverage at competitive rates. A commitment to ongoing audits demonstrates a high level of cyber readiness to insurers.

    5. Secure Compliance with Privacy Regulations

    Many businesses of all sizes handle sensitive data such as Social Security numbers and other personally identifiable information. Ensuring compliance with privacy regulations such as GDPR or CCPA shows insurers that your business takes data protection seriously. This can make you eligible for discounts on cyber insurance policies that provide coverage for legal expenses associated with breaches.

    6. Bundle Cyber Insurance with Other Policies

    Some providers offer discounts when bundling cyber liability coverage with traditional liability insurance policies or property insurance. If your business uses a single casualty insurance company, inquire about bundled insurance products that include first-party coverage and privacy liability coverage to protect your business holistically. This approach not only saves costs but also simplifies claims management in the event of cybercrime.

    7. Adopt Multi-Factor Authentication (MFA)

    A simple yet effective way to improve your security posture is by implementing MFA across all business systems. This extra layer of defense helps protect your computer system from unauthorized access, reducing the likelihood of breaches. Insurers are more likely to offer favorable rates to businesses using MFA, as it directly addresses one of the most common vulnerabilities.

    By following these best practices, your business can reduce its cyber risk, improve its eligibility for cyber insurance coverage, and lower premiums. Cyber insurance provides coverage for legal expenses, breach recovery, and mitigating cyber threats, but insurers reward businesses that proactively invest in cybersecurity solutions. This not only protects your operations but also ensures long-term cost savings and peace of mind.

    Get Immediate Funds for Your Premiums or Cybersecurity Upgrades

    Most business owners understand that having the right people, technology, and insurance in place is crucial to avoiding catastrophic outcomes from cyber incidents, but finding the cash for these investments can be challenging, especially if you’re growing your business. Invoice factoring can provide you with the capital you need instantly through the sale of your unpaid invoices. Instead of taking out a loan with interest and having to pay that back over time, you simply sell your invoices to a factoring company like Charter Capital at a slight discount. Use the cash to expand your IT team, upgrade your security, cover premiums, and more. To get started, request a complimentary rate quote.

  • How to Create an Airtight Business Disaster Preparedness Plan

    How to Create an Airtight Business Disaster Preparedness Plan

    Disaster Preparedness Plan

    Most small businesses think they’re prepared for disasters, yet just a quarter actually are, according to U.S. Chamber of Commerce Foundation research. Perhaps as a sign of the times, most businesses that aren’t truly prepared cite finances. Simply put, planning for emergencies is difficult when you’re worried about making payroll or covering other vital expenses. Even still, each business disaster planning step you take today has the potential to ensure continuity of operations and accelerate recovery tomorrow. Below, we’ll walk you through the steps involved in developing an airtight disaster preparedness plan or shoring up your existing plan, including budget-friendly options you can take right away.

    The Importance of a Disaster Preparedness Plan for Small Businesses

    People often think of worst-case scenarios regarding disaster preparedness, such as the likelihood of business closure following an incident. This is an important consideration, as 43 percent of small businesses do not reopen after a disaster, according to the Federal Emergency Management Agency (FEMA). An additional 29 percent close within two years. However, there are many reasons beyond business failure to develop a disaster recovery plan now.

    • Financial Protection: The best time to obtain disaster recovery insurance is before you experience an incident. A good insurance plan will cover everything from property damage to liability claims and business interruption costs.
    • Business Continuity: Around a third of businesses take six months or more to fully recover from an incident, per the U.S. Chamber of Commerce Foundation. More than one in ten takes over a year to recover. Effective planning helps you avoid these disruptions and recover faster.
    • Cost Efficiency: By minimizing business disruptions and losses, your business will save money over time.
    • Employee Welfare: A strong business emergency plan enhances employee safety. Your crisis management response is also one of the greatest factors in how employees cope with a disaster. A prepared business fosters trust and builds confidence, which will help minimize downtime and losses.
    • Maintaining Customer Trust and Reputation: Certain industries are particularly sensitive to disruption. For instance, if you’re in an industry like trucking, manufacturing, oilfield services, staffing, or security, your clients will have greater confidence in your business if you’re prepared for disasters. You may also win more business if an event occurs and you’re better prepared for it than your competitors.
    • Regulatory Compliance: Many industries have preparedness standards and laws, especially regarding safety, security, and privacy. Shoring up your plans can add a layer of legal protection to safeguard your business in the future.

    Critical Components of an Effective Disaster Preparedness Plan

    Each business will have unique emergency planning needs. As you develop yours, address the areas outlined below.

    • Communication: Have a plan for sharing information quickly and clearly. Ensure the plan covers who is responsible for communicating with whom, when communication should occur, and the proper method of communication.
    • Training and Drills: Train the team on their roles during an emergency and run drills to ensure the steps become second nature.
    • Evacuation Plans: Outline the safest and quickest routes to exit the building, as well as emergency meeting points and procedures for ensuring everyone’s safety.
    • Emergency Supplies: Develop an inventory of supplies and equipment that might be needed during an emergency. This includes things like fire extinguishers, medical kits, and communication devices.
    • Emergency Funding: Understand the likely costs of addressing various scenarios and set aside savings or have a backup funding source like invoice factoring that can provide cash quickly.
    • Security Protocols: Identify any security protocols necessary to protect people and your property during an emergency.
    • Risk Assessment: Create a list of existing and potential dangers, identify the risk of an issue occurring, and predict likely outcomes if an event occurs.
    • Planning: Work through as many emergency scenarios as possible to determine what needs to be done if an incident occurs.

    Steps to Drafting Your Disaster Preparedness Plan

    Now that we’ve covered the background let’s explore the steps involved in creating a disaster preparedness plan.

    Step 1: Conduct a Risk Assessment

    Identify and prioritize the risks that could impact your business operations. A few examples of typical risks are covered below.

    • Technological Incidents: Power outages, fire, hazardous materials accidents, chemical/biological/radiological incidents, vehicle or aircraft crashes, etc.
    • Weather-Related Incidents: Earthquakes, wildfires, extreme heat, tornados, winter storms, flooding, hurricanes, etc.
    • Human-Caused Incidents: Civil disorder, vandalism, cybercrime, etc.

    Once you have a list of potential emergencies, assess how likely your business is to be impacted by each one.

    Step 2: Develop a Business Impact Analysis

    Analyze how different types of disasters could affect your business and the financial impact. For instance, a winter storm could potentially cut power to the business, limit communication, create safety risks, and prevent people from getting to or leaving the business.

    The anticipated costs will vary greatly from one business to the next. For instance, the 2024 CrowdStrike software glitch grounded airlines, shut down medical facilities, and paused banking, resulting in a net loss of over five billion dollars, CNN reports. Meanwhile, an Amazon outage costs the company more than $66,000 per minute, according to Forbes. Your figures are not likely to reach this magnitude, but understanding the potential cost of each event can help you prioritize various planning activities and allow you to focus on the most disruptive events first.

    Step 3: Create Emergency Response Procedures

    Emergency response planning focuses on how your business will protect people and minimize harm in the event of a disaster. For instance, a power outage can make navigating an office difficult, presenting injury risk for everyone inside. Your plan might involve having emergency lighting kick in, followed by managers performing sweeps of their departments and evacuating people to a safe area.

    Go through your list of potential emergencies and identify how you’ll keep people safe during each one.

    Step 4: Develop a Continuity of Operations Plan

    Whereas the emergency response plan focuses on protecting people during an emergency, your continuity of operations plan (COOP) is dedicated to minimizing downtime. Ideally, your COOP will help you avoid downtime altogether. For instance, you might install a backup generator or alternate power source that allows you to continue operating even if your main power is cut. However, your COOP should also consider methods to get your business up and running fast if it is taken offline altogether. For instance, you might consider backing up your website or data to a secondary server to switch over quickly if the primary server is down.

    Again, go through each item on your list, identify all the ways you can think of that would prevent your business from operating at full capacity, and brainstorm strategies to restore operations as quickly as possible.

    Step 5: Train Employees and Test the Plan

    Ensure your plans are documented and accessible. For instance, consider having written copies distributed to the team and stored in your building. Also, have digital copies that can be accessed via computer or phone.

    Run drills with your team to help ensure everyone can fulfill their role without issue. Think of this like fire drills. The more often you do it, the faster and more fluid your team will become, thus ensuring things will go quickly and smoothly if there is ever an incident. These drills will also allow you to test your plan so you can make adjustments as needed to ensure your people and business are truly protected in the event of an emergency.

    Strengthen Your Business Continuity Planning with Factoring

    Having backup funding is crucial to business continuity planning, as it allows you to address issues quickly without waiting for approval or disbursement. Factoring is ideal because you can set it up in advance and not leverage it until you need it. Plus, same-day funding is available when you work with a company like Charter Capital, ensuring you have cash when it’s critical. Many businesses also leverage factoring as they’re putting preparedness plans in place, as it can provide a quick cash injection without creating debt. If you’d like to get set up with factoring services so your business is prepared, request a complimentary rate quote.

  • Staffing Industry Should Brace for “Rollercoaster”

    Staffing Industry Should Brace for “Rollercoaster”

    Those with ties to the contingent workforce should prepare for more ups and downs into next year, analysts say.

    October 22, 2024, Houston, TX — Leading invoice funding company Charter Capital says the staffing industry should brace itself for more ups and downs in the coming months. Additional details are available in “The Role of Invoice Factoring in Staffing Company Growth,” which can be accessed at charcap.com.

    The new report aligns with Staffing Industry Analysts (SIA) data which finds that the contingent workforce industry has been largely unpredictable since 2020. Aptly described as a “rollercoaster ride,” the industry is expected to continue this behavior throughout 2024 and into 2025, though industry-wide growth is ultimately expected in the coming year and beyond.

    “While some staffing firms are performing incredibly well now, others are actively downsizing,” explains Gregory Brown, Co-founder and Executive Manager at Charter Capital. “This comes down to challenges with both talent and demand.”

    Brown notes that the vast majority of contingent workers prefer not to work with a traditional staffing provider, particularly as businesses bring teams back to brick-and-mortar locations. Whereas talent could, at one time, complete an interview and have multiple offers overnight, their options are more limited now, and they’re facing pressure to give up remote work. Many are resisting and even willing to accept less pay to continue working remotely. Staffing firms must be diligent in finding new ways to excite workers about returning to in-person jobs.

    At the same time, companies that have been holding back on building their contingent workforces due to cost must be reminded about how this influences their resilience and long-term sustainability.

    “Balancing cash flow during these unpredictable times is challenging,” Brown continues. “When you layer in the need for additional marketing, education, and workforce incentives, it puts staffing firms in a very difficult position.”

    Even still, Brown notes that the industry is poised for growth, and those that find ways to address these issues and manage cash flow effectively will likely gain a major competitive advantage. He says that invoice factoring can help by providing instant capital for unpaid invoices, making cash flow more predictable, and allowing firms to cover vital expenses.

    Those interested in learning more about staffing factoring or who would like to request a complimentary quote may do so by calling 1-877-960-1818 or visiting charcap.com.

    About Charter Capital
    Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com or call 1-877-960-1818.

  • Top 6 Business Growth Resources for Savvy Entrepreneurs

    Top 6 Business Growth Resources for Savvy Entrepreneurs

    Top Business Growth Resources for Savvy Entrepreneurs

    Do you know what separates a thriving business from one that stalls? It’s not just the product, the strategy, or even the vision—it’s the ability to tap into the right resources at the right time. For entrepreneurs, staying ahead of the curve means constantly learning, adapting, and growing. Whether you’re a seasoned business owner or just starting out, knowing where to find the most valuable insights can be the difference between stagnation and success. From industry-specific blogs to powerful mentorship programs, the right business growth resources can provide you with the knowledge, strategies, and connections you need to scale. We’ll explore some of the top resources you can tap into below.

    1. Business Websites and Blogs

    Staying updated with industry trends is crucial for every business aiming to expand its customer base and enter new markets. Utilizing these resources for small business owners helps ensure you’re always informed on the latest best practices and online tools available to help your business grow. From free digital resources to paid platforms, there are endless options available to help drive business growth.

    Entrepreneur.com

    A go-to for small business owners and entrepreneurs, Entrepreneur covers everything from marketing strategies to startup advice. You’ll find in-depth articles, interviews with successful business owners, and plenty of case studies.

    Harvard Business Review (HBR)

    Known for its rigorous research and expert insights, HBR provides articles that are more academically inclined, yet still practical. They cover leadership, management, and innovation in ways that apply to businesses of all sizes.

    Forbes – Entrepreneurs Section

    Forbes regularly features articles on market trends, funding strategies, and leadership. Their entrepreneur section specifically focuses on providing actionable advice for startups and growing businesses.

    Industry-Specific Blogs

    Depending on your niche, finding industry-specific blogs is critical. For example, Shopify’s Blog is an excellent resource if you’re in eCommerce, covering everything from SEO to shipping logistics. The Balance Small Business is another excellent general resource for small businesses, providing easy-to-understand finance, marketing, and operations advice.

    Charter Capital Insights

    Often focusing on B2B industries with longer cash flow cycles, such as Trucking and Freight Services, manufacturing, security firms, staffing, consulting and service firms, and oil and gas services, Charter Capital Insights offers a wealth of business growth resources. While much of this centers on business finance, how to create a business budget, and cash flow management, content often extends into business insights, industry trends, and strategic business growth tactics.

    2. Business Books and E-books

    Business books are an invaluable resource for entrepreneurs at any stage. They provide theoretical insights and practical advice from successful business leaders.

    Must-Read Business Books for Entrepreneurs

    Start with “Best Books for Small Business Owners: 15 Essential Reads.” As part of our resources for business growth, this curated list includes perennial favorites such as Sun Tzu’s “The Art of War” all the way through Husam Jandal’s “Digital Marketing Outsourcing: The Ultimate Recipe for Growing Your Business Online,” allowing you to improve your marketing, leadership, and more.

    E-Books for Business Owners

    Often overlooked as business growth resources, e-books can provide a wealth of information and are often offered at no charge by businesses covering their area of expertise. For instance, HubSpot offers a whole series of e-books dedicated to marketing and business growth, while Wrike provides a project management guide. You can also get “The Ultimate Guide to Improving Small Business Cash Flow” free when you sign up for Charter Capital Insights.

    3. Online Courses and Webinars

    Online courses and webinars are essential for entrepreneurs looking to stay competitive, upskill their teams, or explore new small business strategies. These flexible learning options offer everything from broad business principles to niche, industry-specific insights.

    Coursera

    Coursera partners with top universities and organizations, offering various courses taught by professionals and academics from institutions like Stanford, Yale, and Google. Coursera’s business-related courses range from “Entrepreneurship: Launching an Innovative Business” to more specific areas like data analysis, digital marketing, and management practices. Many courses offer certifications, making Coursera a solid choice for entrepreneurs who want a structured learning experience with tangible credentials.

    Udemy

    Udemy is another popular platform offering thousands of courses, many of which are aimed at small business owners, entrepreneurs, and marketers. Courses like “The Complete Digital Marketing Course” or “Business Strategy: Become a Strategy Consultant” are highly rated by users. By leveraging a marketplace model, Udemy allows a wide variety of instructors to create courses, which means there’s something for everyone, but the quality can vary.

    LinkedIn Learning

    LinkedIn Learning provides on-demand courses in business, technology, and creative skills. With over 23,000 courses taught by industry experts, LinkedIn Learning is perfect for business professionals who want to improve leadership, financial management, or marketing skills. The platform is also integrated with LinkedIn, making it easier to showcase completed courses on your profile.

    4. Industry Conferences and Networking Events

    Attending industry conferences and networking events is one of the most effective ways to stay ahead in your industry, learn from experts, and build valuable business connections.

    SXSW (South by Southwest)

    Held annually in Austin, Texas, SXSW is a convergence of the interactive, film, and music industries. It’s an excellent conference for entrepreneurs who are at the intersection of tech, media, and business. The event features presentations from global thought leaders, workshops, and a massive showcase of startups and emerging technology. Attend for:

    • Networking with creative professionals, investors, and potential partners.
    • Exposure to innovative ideas and technologies that could inspire new business models.

    Web Summit

    This global tech conference, held in Lisbon, Portugal, is one of the largest technology-focused events in the world. Entrepreneurs and startups attend Web Summit to gain exposure to new tools and insights from industry giants like Google, Microsoft, and Amazon. It benefits those looking to scale their tech startup or gain insights into digital innovation. You may want to attend for:

    • Networking opportunities with global investors and tech leaders.
    • Workshops and panels on everything from AI to digital marketing.

    TED Conferences

    The iconic TED Conference, held annually in Vancouver, Canada, brings together visionaries from every industry. Though not a business conference in the traditional sense, TED is an excellent opportunity to be inspired by ideas from technology, entertainment, and design. For entrepreneurs, the ability to think outside the box is vital, and TED excels at promoting creative, disruptive thinking. Attend TED conferences for:

    • Exposure to groundbreaking ideas from diverse fields.
    • Networking with thought leaders and influencers.

    Startup Grind Global Conference

    Held in Silicon Valley, the Startup Grind Global Conference gathers founders, investors, and innovators from across the globe. The conference focuses on entrepreneurship and startups, covering scaling, funding, leadership, and technology. Speakers often include successful founders and venture capitalists who share strategies and expert advice for businesses. Attend for:

    • Networking with fellow entrepreneurs and VCs.
    • Learning growth strategies from those who’ve scaled startups successfully.

    Dreamforce (Salesforce)

    Hosted by Salesforce in San Francisco, Dreamforce is more than just a tech conference. It’s a space for learning about the future of business, customer relationship management (CRM), and cutting-edge marketing strategies. Entrepreneurs in sales-driven industries, SaaS, or B2B tech sectors can gain practical tools to improve customer experiences and business outcomes. Attend for:

    • Hands-on sessions and certifications to improve business processes.
    • Opportunities to meet potential customers, partners, or tech vendors.

    The World Business Forum

    Held in major cities like New York and Sydney, the World Business Forum gathers top global executives and entrepreneurs. It covers themes like leadership, innovation, and customer engagement, making it ideal for entrepreneurs seeking to sharpen their strategic thinking. Attend for:

    • Learning opportunities from influential speakers like former world leaders and Fortune 500 CEOs.
    • Actionable insights on how to drive innovation and growth within your business.

    5. Peer Groups and Mentorship Programs

    Peer groups and mentorship programs are essential resources for entrepreneurs seeking fresh perspectives, solving challenges, and accelerating business growth. These programs provide a supportive network of fellow business owners and experienced mentors who can offer guidance, accountability, and actionable advice. Joining also allows you to take advantage of the benefits of networking in business, such as gaining exposure to new ideas and opportunities. A few examples of peer groups and mentorship programs are covered below.

    Entrepreneurs’ Organization (EO)

    The Entrepreneurs’ Organization is a global network that connects entrepreneurs from various industries. EO is designed for business owners with companies generating at least $1 million in revenue. Members benefit from peer-to-peer learning, access to exclusive events, and structured mentorship programs that connect you with experienced entrepreneurs. Join for:

    • The opportunity to connect with a global network of entrepreneurs at similar business stages.
    • Access to a variety of learning resources and exclusive global events.

    Vistage

    Vistage is a leading peer advisory group that connects CEOs, business owners, and executives to share experiences and offer mutual support. Members meet monthly in small peer groups facilitated by an experienced chairperson, helping each other solve real-world business problems. Additionally, Vistage offers one-on-one executive coaching and leadership development. Join for:

    • Personalized group sessions that provide actionable insights and accountability.
    • An organization with a proven track record of helping businesses grow through peer support and coaching.

    SCORE (Service Corps of Retired Executives)

    SCORE is a nonprofit resource partner of the U.S. Small Business Administration (SBA) that offers free mentoring to small business owners. The SCORE program connects you with experienced business mentors—many of whom are retired executives or successful entrepreneurs—who can provide guidance on everything from business planning to marketing strategies. Join for:

    • Free mentoring services tailored to your business needs.
    • Access to a wide range of workshops and educational resources.

    Young Presidents’ Organization (YPO)

    YPO is an exclusive global network of young business leaders who run large companies. Members of YPO gain access to peer learning groups, leadership training, and personal growth opportunities. The organization is built around forums where members can openly share their challenges and insights with trusted peers. Join for:

    • Exclusive peer network of high-achieving business leaders.
    • Focus on leadership and personal development through peer support.

    Founders Network

    Founders Network is an invite-only community of tech startup founders. The program provides mentorship, resources, and peer networking for entrepreneurs navigating the challenges of scaling tech companies. Members of Founders Network can participate in virtual forums, local meetups, and small-group mentorship programs designed to address specific startup challenges. Join for:

    • Focused on tech startup founders, offering tailored advice and resources.
    • Virtual and in-person meetups for networking and mentorship.

    Techstars

    Techstars is both a global network and an accelerator program designed to support early-stage startups. While known for its startup accelerators, Techstars also offers a comprehensive mentorship program where successful entrepreneurs and industry experts provide hands-on guidance to participants. This is an excellent resource if you’re looking to accelerate your business growth with mentorship from experts in your industry. Join for:

    • Intense mentorship from successful founders and industry experts.
    • Opportunity to connect with investors and potential partners.

    6. External Partnerships

    Establishing solid external partnerships with professionals like lawyers, accountants, and finance experts is critical to running a successful business. These external partners provide the specialized knowledge you need to navigate legal issues, financial management, and complex business challenges that go beyond the expertise of you or your internal team. Leveraging these relationships can help you scale your business more efficiently while mitigating risk. A few examples are highlighted below.

    Lawyers

    A good business lawyer is an essential partner for every entrepreneur, helping you navigate legal requirements and avoid costly mistakes. Lawyers can assist with structuring your business, drafting contracts, protecting intellectual property, and ensuring compliance with local and federal laws.

    Accountants

    An accountant does more than just file taxes—they are an invaluable partner in managing your business’s financial health. Accountants help with financial planning, bookkeeping, and compliance with tax laws, ensuring your business remains profitable and compliant as it grows.

    Finance Partners

    Finance partners—whether they’re financial advisors, venture capitalists, private equity firms, or factoring companies like Charter Capital—play a key role in helping you secure capital, manage growth, and structure financial deals. Depending on your business stage and growth strategy, these partners may help you raise funds, acquire new assets, or manage debt.

    HR and Payroll Services

    As your business grows, managing employees becomes more complex. HR and payroll service providers help ensure compliance with labor laws, streamline employee benefits, and handle payroll efficiently.

    Marketing and PR Firms

    Marketing and public relations firms help businesses build their brand, connect with their target audience, and manage their public image. Whether you’re launching a product or scaling your company, these partners are essential for raising awareness and driving sales.

    Empowering Your Business for Sustainable Growth and Success

    In today’s fast-paced business environment, having the right resources and tools is essential for entrepreneurs and small business owners who want to grow. Whether you’re leveraging free resources like online courses, small business communities, or mentorship programs, or investing in content marketing efforts to attract new customers, each resource plays a role in driving continued growth.

    By focusing on a business growth strategy that incorporates market research, SEO, and CRM solutions, you can expand your reach, improve customer retention, and maintain excellent customer service. As businesses are always evolving, look to the future with a growth plan that adapts to your target market and helps you enter new markets confidently.

    Remember, there’s strength in numbers—take advantage of specific resources and assistance programs across the United States that support entrepreneurs and established businesses alike. With a well-rounded approach, you can expand your business, attract both existing and potential customers, and achieve sustainable success.

    Grow Your Business with Help from Charter Capital

    Whether you’re ready to start factoring now or simply want to partner with an experienced finance partner to ensure you’ll have funding ready when you need it, Charter Capital is here to help. Request a complimentary factoring quote to take the first step.

  • How Technology in B2B Payments is Transforming Businesses

    How Technology in B2B Payments is Transforming Businesses

    How Technology in B2B Payments is Transforming Businesses

    Did you know a typical mid-sized business spends almost two days each week chasing payments, according to Intuit? While this figure may seem unreal to some, it’s only the tip of the iceberg for others. But it doesn’t have to be this way.

    Technology in business-to-business (B2B) payments is rapidly evolving. On this page, we’ll explore how technology in B2B payments can help you save time, accelerate payments, reduce costs, strengthen relationships, operate more securely, and improve cash flow management.

    The Evolution of B2B Payment Trends and Solutions

    In recent years, business-to-business payment processes have undergone significant transformation, driven largely by technological innovations. Traditionally, B2B payments involved lengthy cycles due to paper invoicing, manual approvals, and slower bank processing times. However, recent trends in B2B payments, such as the rise of digital payment methods, have significantly improved efficiency and accuracy.

    One notable trend is the adoption of electronic payment systems, allowing businesses to make payments without the delays associated with traditional methods. Automated B2B payment solutions, such as ACH payments and digital B2B payment solutions, now offer faster payment processing and real-time visibility into transactions. Companies can also leverage global payment solutions to accept payments from international partners more easily, thus reducing the risks of payment delays or longer payment cycles.

    Another key trend is the shift towards automating B2B payment processes. By adopting automated solutions, businesses can reduce human error, eliminate manual tasks, and speed up payments, contributing to better cash flow management. Furthermore, the integration of blockchain-based payment systems offers improved security by making transactions transparent and tamper-resistant. The B2B payment market is expected to continue evolving, with more businesses exploring online payment options and electronic platforms to stay competitive.

    The Fintech Revolution in B2B Payments

    The fintech revolution in B2B payments has transformed how businesses conduct transactions, making processes faster, more efficient, and increasingly secure. Historically, B2B payments were often characterized by manual processes, which were time-consuming and prone to errors. The advent of fintech has changed all that, leveraging technology to streamline payments and eliminate many inefficiencies plaguing traditional methods.

    The Rise of Fintech: A Historical Perspective

    The rise of fintech in the B2B sector can be traced back to the early 2000s when digital payment systems started gaining traction. Initially, these technologies were more consumer-focused, but businesses quickly recognized their potential. Companies like PayPal began to offer services that catered to business needs, facilitating faster and more reliable transactions. Over the past few decades, the B2B payments landscape has evolved rapidly, with fintech companies offering solutions that speed up transactions and provide greater transparency and security.

    These shifts have also been seen in invoice factoring. Today, businesses can leverage factoring platforms that are fully digital, providing quick and easy access to working capital. With just a few clicks, companies can submit their invoices and receive funds immediately, allowing them to maintain smooth operations and take advantage of new opportunities without the typical wait times associated with traditional payment methods.

    Key Players in the Fintech Revolution

    Some of the key players driving this revolution include companies like Stripe, Square, and PayPal, which have expanded their services to cater specifically to B2B needs. These brands offer many services, from payment gateways to invoicing solutions, that help businesses manage their finances more effectively. For example, Stripe’s payment platform has become a go-to solution for companies looking to integrate seamless payment processing into their operations, offering features like recurring billing and automated invoicing that save time and reduce administrative overhead. In factoring, Charter Capital paved the way with instant approval, digital invoice processing, and same-day payments that eliminate the traditional 30, 60, or 90-day waits for customer payments.

    Popular Types of B2B Payments: What Companies Are Using

    Businesses today have access to a variety of payment methods to facilitate B2B transactions. The most popular types of B2B payments include ACH payments, credit card payments, and wire transfers. Each method offers distinct advantages depending on the transaction size, security requirements, and the speed at which businesses must settle invoices.

    ACH payments, part of the automated clearing house payments network, have gained popularity for their efficiency and cost-effectiveness, especially for domestic transactions. These payments are typically processed within 1-2 business days, making them a reliable option for recurring payments and longer payment cycles. For faster cross-border payments, wire transfers remain a preferred choice due to their ability to settle international transactions quickly, albeit at a higher cost.

    Increasingly, companies are also turning to digital B2B payment platforms that integrate online payment options. By using electronic payment platforms, businesses can offer more payment types and improve the overall payment experience for their partners. Additionally, emerging technologies such as blockchain-based payment solutions are creating new avenues for secure, instantaneous transfers that eliminate the need for intermediaries, especially for high-value international transactions.

    Advancements Driving Faster Transactions

    In addition to these service providers, fintech advancements have played a significant role in driving faster transactions. Blockchain technology, for example, is reimagining the industry. By providing a decentralized ledger system, blockchain can facilitate near-instantaneous transactions that are secure and transparent. Meanwhile, digital wallets and payment gateways make it easy for companies to send and receive payments anywhere in the world without the delays typically associated with cross-border transactions.

    The fintech revolution is not just about speed and efficiency, though. It’s also about enhancing the overall customer experience. By leveraging these technologies, businesses can offer more flexible payment options to their clients and improve cash flow management while reducing the risk of fraud. This holistic approach to B2B payments is why fintech has become vital to modern business operations.

    How Digital B2B Payment Solutions Streamline the Payment Process

    Digital B2B payment solutions have revolutionized how companies handle financial transactions, enabling them to operate more efficiently and securely. Traditional B2B transactions often involve paper-based processes that are prone to delays, but the shift to digital payment methods has significantly reduced payment cycles. Businesses now use automated B2B payment platforms that offer fast, secure, and traceable transactions.

    One major advantage of digital payment solutions is the ability to offer a variety of payment methods. Whether through ACH payments, credit card payments, or electronic payment methods, businesses can now offer multiple payment options, making it easier for their partners to settle invoices. Digital payment platforms also help businesses manage their finances more effectively by providing instant access to payment statuses and historical data, which improves decision-making.

    Moreover, digital platforms enhance security by incorporating payment fraud controls. Using encryption, tokenization, and multi-factor authentication, these systems ensure that B2B payment processes remain secure, reducing the risk of fraud or data breaches. As B2B payments typically involve larger sums than B2C payments, the need for security is paramount. As businesses continue to adopt these solutions, they will benefit from faster, more reliable, and timely payments.

    Ensuring Security in B2B Transactions

    Security is a major concern in B2B transactions, especially as the volume and complexity of digital payments continue to grow. The expansion of fintech has introduced new opportunities for streamlining payments, but it has also brought new challenges in terms of safeguarding sensitive financial data. Ensuring security in B2B transactions requires a multi-faceted approach that involves advanced technologies, robust cybersecurity measures, and strict regulatory compliance.

    Cybersecurity Measures for Safe Transactions

    Cybersecurity in B2B payments is the first line of defense against fraud, data breaches, and other malicious activities. Companies increasingly rely on encryption and tokenization technologies to protect transaction data.

    Encryption

    Encryption involves converting sensitive data into a code to prevent unauthorized access. This ensures that even if data is intercepted during transmission, it remains unreadable to anyone without the proper decryption key. For instance, when a business sends payment information through a digital gateway, that data is typically encrypted to safeguard it from cyber threats.

    Tokenization

    Tokenization takes security a step further by replacing credit card information and other sensitive data with a unique identifier or “token.” This token has no exploitable value, so even if cybercriminals manage to steal it, they cannot use it to perform unauthorized transactions. Tokenization is particularly useful in recurring payments and stored payment information, providing an extra layer of protection against data breaches.

    Multi-Factor Authentication

    Beyond these technologies, businesses are also implementing multi-factor authentication (MFA). With MFA, users must provide two or more verification factors to access accounts or complete secure transactions. This decreases the likelihood of unauthorized access, even if login credentials are compromised.

    The Role of Regulatory Compliance

    Regulatory compliance is another critical aspect of ensuring security in B2B transactions. Governments and regulatory bodies have developed strict guidelines that companies are required to follow to protect consumer data and maintain the integrity of financial systems. For example, the Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that ensures all companies that process, store, or transmit credit card details maintain a secure environment.

    Encryption and Tokenization Technologies

    As mentioned earlier, encryption and tokenization are at the forefront of security measures in B2B transactions. Moreover, these technologies are constantly evolving. For example, quantum computing poses potential risks to current encryption methods, as its immense computational power could break encryption algorithms that are currently considered secure. In response, researchers are working on quantum-resistant encryption methods to ensure that data remains protected in the future.

    Tokenization is evolving to become more versatile, too. While traditionally used for payment card data, businesses are now applying tokenization to other forms of sensitive information, such as account numbers and personal identifiers. This expansion of tokenization helps reduce the risk of data breaches across a broader range of transaction types.

    Balancing Security with Usability

    One of the ongoing challenges in B2B payments is balancing security with usability. While robust security measures are essential, they can sometimes introduce friction in the payment process, leading to delays or inconvenience for users. For example, while MFA significantly enhances security, it can also add extra steps to the transaction process, which some users may find cumbersome.

    To address this, businesses are increasingly adopting user-friendly security solutions that minimize friction while maintaining high levels of protection. For instance, biometric authentication methods, such as fingerprint or facial recognition, offer strong security without the need for passwords or additional verification steps. This enhances security and improves the user experience by making transactions quicker and more seamless.

    Benefits of Streamlined B2B Payments

    Streamlined B2B payments offer numerous benefits that extend beyond just faster transactions. By leveraging modern fintech solutions, businesses can enhance operational efficiency, strengthen relationships with suppliers and customers, and adapt more quickly to the dynamic demands of the market. Let’s take a closer look at the benefits.

    Operational Efficiency and Cost-Savings

    One of the most immediate benefits of streamlined B2B payments is the significant improvement in operational efficiency. Traditional payment methods, such as checks, often involve multiple steps and manual processing, which can be time-consuming and error prone. By contrast, digital payment solutions automate much of this process, reducing the need for manual intervention and the associated risk of human error.

    For example, automated invoicing systems can generate and send invoices, track payments, and even send reminders to clients, all without requiring manual input. This speeds up the payment cycle and frees up valuable time for staff to focus on more strategic tasks.

    Additionally, streamlined payments can lead to cost savings by minimizing late payment fees and reducing the need for paper-based processes. Companies can also benefit from early payment discounts offered by suppliers, further improving their cash flow management.

    Enhancing Supplier and Customer Relationships

    Another major benefit of streamlined B2B payments is the positive impact on relationships with suppliers and customers. Timely and accurate payments are essential for maintaining trust and reliability in business partnerships. Businesses can strengthen these relationships by ensuring that payments are processed quickly and without errors, leading to more favorable terms and long-term partnerships.

    For instance, businesses that consistently pay their suppliers on time are more likely to negotiate better credit terms, discounts, or priority treatment during periods of high demand. Similarly, customers appreciate the convenience and reliability of streamlined payment processes, which can enhance their overall experience and encourage repeat business.

    Moreover, the transparency provided by digital payment solutions allows all parties to track the status of transactions in real time. This transparency reduces disputes and misunderstandings, fostering a sense of trust and collaboration between business partners.

    Real-Time Payments: The New Norm

    Real-time payments are rapidly becoming the norm in B2B transactions, driven by the demand for faster, more efficient payment processing. Unlike traditional payment methods, which can take several days to clear, real-time payments are processed instantly, allowing businesses to receive funds almost immediately. This can be particularly beneficial for small and medium-sized enterprises (SMEs), which often rely on quick access to cash to manage day-to-day operations.

    For example, the implementation of the Real-Time Payments (RTP) network has enabled businesses to transfer funds between accounts in seconds, even outside of traditional banking hours. This level of speed and convenience improves cash flow and reduces the need for short-term financing solutions, such as credit lines, which can carry higher costs.

    Real-time payments also enable businesses to take advantage of just-in-time payment strategies, aligning payments with the delivery of goods or services. This reduces the amount of working capital tied up in accounts payable and improves overall liquidity.

    Additional Benefits: Enhanced Data Insights and Scalability

    Beyond operational efficiency and improved relationships, streamlined B2B payments offer additional benefits in terms of data insights and scalability. Digital payment systems often come with advanced analytics tools that allow businesses to track payment trends, monitor cash flow, and identify opportunities for optimization. This data can be invaluable for making informed financial decisions and improving overall business performance.

    Moreover, streamlined payment systems are highly scalable, making it easier for businesses to expand into new markets or increase transaction volumes without needing to overhaul their payment infrastructure. This scalability is essential in today’s global economy, where companies must be agile and adaptable to stay competitive.

    Adapting to the Tech-Driven Payment Landscape

    Adapting to the tech-driven payment landscape is essential for businesses that want to remain competitive and efficient in today’s rapidly evolving market. As fintech innovations continue to reshape how transactions are conducted, companies must integrate these new technologies, choose the right platforms, and prepare for future advancements. Below, we’ll explore how companies can successfully navigate this transition.

    Integrating Fintech Solutions

    The first step in adapting to the tech-driven payment landscape is integrating fintech solutions into your existing business processes. This often involves replacing or enhancing traditional payment methods with digital alternatives that offer greater speed, security, and convenience. The key is to choose solutions that align with your business needs and customer expectations.

    For instance, if your business handles a high volume of transactions, adopting an automated payment processing system can significantly reduce the time and effort required to manage payments. These systems can automatically handle invoicing, payment tracking, and reconciliation, freeing up resources for other tasks.

    Moreover, integrating digital wallets and payment gateways can enhance your ability to offer flexible payment options to customers. For example, platforms like Stripe and PayPal allow businesses to accept a wide range of payment methods, including credit cards, digital wallets, and even cryptocurrencies. This flexibility can help you cater to a broader customer base and improve the overall payment experience.

    Choosing the Right Payment Platform for Your Business

    With so many fintech solutions available, selecting the right payment platform can be challenging. It is crucial to evaluate your options based on several key factors, such as those outlined below.

    Scalability

    As your business grows, your payment platform should be able to scale with you, handling increased transaction volumes without sacrificing performance.

    Security

    Ensure that the platform you choose offers robust security features, such as encryption, tokenization, and compliance with relevant regulations like PCI DSS. Security is paramount in protecting your business and customer data.

    Integration

    The platform should seamlessly integrate with your existing systems, such as your enterprise resource planning (ERP), customer relationship management (CRM), or accounting software. This integration helps ensure a smooth flow of information across your business processes.

    User Experience

    A user-friendly interface is essential for both your team and your customers. Look for platforms that offer intuitive dashboards, easy-to-use payment portals, and efficient customer support.

    Cost

    Consider the total cost of ownership, including setup fees, transaction fees, and ongoing maintenance costs. While finding a cost-effective solution is important, it’s equally important to ensure that you don’t compromise on essential features.

    Preparing for the Future: What’s Next in B2B Payments Technology?

    As technology advances, the future of B2B payments promises even more innovation. A few trends that businesses should prepare for are outlined below.

    Artificial Intelligence and Machine Learning

    By enabling more accurate fraud detection, automating decision-making processes, and offering personalized payment experiences, artificial intelligence (AI) and machine learning (ML) are set to revolutionize payment processing. For instance, AI-driven analytics can help businesses optimize their payment strategies by predicting cash flow needs and identifying potential risks.

    Blockchain and Distributed Ledger Technology

    While blockchain is already making waves in the payment industry, its full potential is yet to be realized. In the future, blockchain could enable even faster and more secure cross-border payments, reduce transaction costs, and provide immutable records of transactions that enhance transparency and trust.

    Open Banking

    Open banking initiatives, which allow third-party providers to access banking data through APIs, are expected to drive greater competition and innovation in the payment industry. This could lead to the development of new payment services that offer businesses more control and flexibility over their financial data and transactions.

    Real-Time Payments

    The shift towards real-time payments will continue, with more countries adopting instant payment systems. Businesses prepared for this transition can offer faster settlement times and improved cash flow management.

    Embedded Finance

    The concept of embedded finance involves integrating financial services directly into non-financial platforms, such as e-commerce sites or supply chain management systems. This trend is likely to grow, providing businesses with more streamlined and convenient payment solutions that are fully integrated into their existing workflows.

    Taking the Leap: Strategies for Successful Adaptation

    Next, let’s take a look at strategies businesses can leverage to adapt to the tech-driven payment landscape successfully.

    Stay Informed

    Monitor industry trends and emerging technologies regularly to stay ahead of the curve. This knowledge will help you identify opportunities to enhance your payment processes and avoid falling behind competitors.

    Invest in Training

    Ensure your team is well-versed in the latest payment technologies and best practices. Investing in training will help them make the most of the tools at their disposal and adapt more easily to new systems.

    Collaborate with Experts

    Partnering with fintech experts or consultants can provide valuable insights and guidance as you navigate the complexities of integrating new payment technologies.

    Start Small, Scale Fast

    Begin by piloting new payment solutions on a small scale, allowing you to assess their impact before rolling them out more broadly. Once you’ve identified the right solutions, scale them quickly to maximize their benefits.

    Focus on Customer Experience

    As you adopt new payment technologies, keep the customer experience at the forefront of your strategy. Ensure that any changes you make enhance convenience, security, and satisfaction for your customers.

    Modernize Your B2B Payment Strategy with Charter Capital

    While it’s true that invoice factoring has been around for ages, it’s one of the many areas impacted by the evolution of technology in B2B payments. At Charter Capital, these advancements allow us to provide instant approval, offer same-day payments, and give you access to your account 24/7. We also use it in customer-facing transactions, allowing us to collect balances quicker and provide a better payment experience for your customers. If you’re ready to modernize your B2B payment strategy, request a complimentary factoring quote.

  • 7 Essential Ways to Invest in Your Small Business

    7 Essential Ways to Invest in Your Small Business

    Learn to Invest in Small Business Growth.

    Warren Buffett once said, “The best investment you can make is in yourself.” For small business owners, this wisdom translates directly into the strategic investments you make in your company. Whether it’s in your financial foundation, your team, or the technology that drives your operations, the choices you make today will shape the future of your business. But where should you focus your resources for the maximum return? On this page, we’ll explore ways to invest in your small business that can propel it to new heights to ensure long-term growth and success.

    1. Financial Investment

    Financial investment refers to allocating capital with the expectation of generating a return. This could involve investing in stocks, bonds, real estate, or even reinvesting profits back into your own business. For business owners, it often means using available funds to grow the business, whether through purchasing new equipment, expanding operations, or improving cash flow management.

    What to Consider When Making a Financial Investment

    Before making a financial investment in your business, assessing the likely outcome is essential.

    Risk vs. Return

    Evaluate the risk associated with the investment against the potential returns. High-risk investments may offer higher returns but also come with the possibility of losing capital.

    Liquidity

    Consider how easily the investment can be converted into cash. Liquidity is crucial for maintaining operational flexibility, especially in uncertain times.

    Time Horizon

    The time frame over which the investment will mature or generate returns is crucial. Short-term investments may provide quick returns, while long-term investments could lead to substantial growth over time.

    Opportunity Cost

    Every dollar invested in one area is a dollar not available for another. Consider what other opportunities you might be forgoing by making this investment.

    Cash Flow Impact

    It’s essential to ensure that an investment won’t strain cash flow. This is where a solution like invoice factoring comes into play, as it provides immediate funds through the sale of your receivables, which can then be reinvested into growth areas. For industries such as security services, leveraging invoice factoring for security firms can help bridge cash flow gaps, ensuring operational stability while enabling reinvestment into critical business areas.

    2. Human Capital Investment

    Human capital investment refers to the resources a business allocates toward improving its employees’ skills, knowledge, and productivity. This includes hiring the right talent, providing ongoing training and professional development opportunities, and fostering a positive work environment. Investing in human capital is essential because employees are often a business’s most valuable asset, as capable, motivated staff drive innovation, efficiency, and, ultimately, profitability.

    How Much to Invest in Human Capital

    There’s a significant divide in how much companies spend on these investments. For instance, a services provider or IT company may spend anywhere from 30 to 50 percent of its overall budget on HR expenses, the Economic Times reports. Meanwhile, a manufacturing company might spend six percent or less. Because of this, it’s often easier to create a ballpark figure for annual spend by developing a budget based on the number of employees. On average, businesses spend an average of $2,810 per employee each year, according to Gartner research.

    What to Consider When Making a Human Capital Investment

    Investing in your workforce goes beyond just filling positions. Consider a range of factors that will help cultivate a motivated, skilled, and loyal team. Some aspects to remember as you plan your human capital investments are covered below.

    Recruitment Strategy

    Attract and hire individuals whose skills and values align with the company’s goals. Consider what specific competencies are needed to support business growth and how to source candidates who embody those traits.

    Training and Development

    Continuous learning is critical. Offering training programs helps employees stay current with industry trends and improves their ability to contribute meaningfully to the business. This includes technical skills, leadership development, and soft skills like communication and teamwork.

    Employee Retention

    High turnover can be costly. Investing in retention strategies, such as competitive salaries, benefits, work-life balance, and a positive company culture, ensures that your investment in people pays off in the long term.

    Performance Management

    Regular feedback and performance reviews help employees grow in their roles. A clear system for evaluating and rewarding performance can motivate employees and align their efforts with the company’s objectives.

    Health and Well-Being

    Supporting employees’ physical and mental health through wellness programs, flexible working arrangements, and supportive management practices can enhance productivity and reduce absenteeism.

    3. Technological Investment

    Technological investment refers to allocating resources toward acquiring, implementing, and maintaining technology that enhances business operations. This can range from upgrading IT infrastructure and adopting new software to investing in automation, cybersecurity, and data analytics tools. In today’s fast-paced business environment, staying technologically competitive is crucial for efficiency, scalability, and innovation.

    How Much to Invest in Technology

    Businesses spend an average of 3.28 percent of their revenue on IT, according to Deloitte. This varies greatly, with some industries like banking and securities coming in at over seven percent, while others like manufacturing at less than two percent.

    What to Consider When Making a Technological Investment

    Technology is a critical driver of growth and efficiency in any business. However, investing in technology requires careful consideration to ensure your chosen solutions align with your business needs and objectives. Let’s take a quick look at some factors to evaluate before making a technological investment.

    Business Needs and Goals

    Identify what specific challenges or opportunities the technology will address. Will it streamline operations, improve customer experience, or enhance data security? Ensure the technology aligns with your long-term business goals.

    Scalability

    Consider whether the technology can grow with your business. Investing in scalable solutions means you won’t need to reinvest in new systems as your business expands.

    Integration with Existing Systems

    Evaluate how the new technology will integrate with your current systems. Seamless integration is critical to avoiding disruptions and maximizing the investment’s benefits.

    User Training and Adoption

    Technology is only as good as the people using it. Plan for training and support to ensure your team can use the new tools effectively. Resistance to change can undermine the ROI of even the most advanced systems.

    Cost vs. Benefit

    Analyze the total cost of ownership, including initial purchase, implementation, and ongoing maintenance. Compare this with the expected benefits, such as time savings, increased productivity, or improved security, to determine if the investment is worthwhile.

    4. Marketing and Advertising Investment

    Marketing and advertising investment refers to allocating resources, such as time, money, and effort, toward promoting your business, products, or services to reach and engage your target audience. This includes everything from digital marketing campaigns and social media advertising to traditional channels like print ads, TV commercials, and event sponsorships. Effective marketing drives brand awareness, generates leads, and ultimately increases sales.

    How Much to Invest in Marketing and Advertising

    Businesses spend an average of 13.6 percent of their total budgets on marketing, according to HubSpot. As with other categories, there is a significant divide by industry. Consumer packaged goods, for example, comes out on top at over 25 percent, while others, like transportation, spend an average of less than two percent of their total budgets on marketing.

    What to Consider When Making a Marketing and Advertising Investment

    Investing in marketing and advertising is crucial for business growth, but it requires careful planning to ensure your efforts are effective and efficient. Below, we’ll cover a few factors to consider when deciding where and how to allocate your marketing budget.

    Target Audience

    Understanding your target audience is foundational. Knowing who your customers are, what they need, and where they spend their time will help you tailor your marketing efforts to reach them effectively.

    Marketing Channels

    Choose the right marketing channel mix that aligns with your audience’s preferences and business goals. This could include digital channels like social media, search engine marketing (SEM), and email marketing, or traditional channels like print, radio, or TV.

    Budget Allocation

    Determine how much you can invest in marketing and where to allocate your budget for the best return. When making these decisions, consider factors like customer acquisition cost (CAC) and a customer’s lifetime value (LTV).

    Content and Messaging

    Craft compelling content and clear messaging that resonates with your audience and differentiates your brand from competitors. Consistent, high-quality content across all marketing channels helps build trust and credibility.

    Measurement and Analytics

    Implement systems to track the performance of your marketing efforts. Metrics like conversion rates, click-through rates (CTR), and return on ad spend (ROAS) will provide insights into what’s working and what needs adjustment.

    5. Product or Service Development

    Product or service development refers to creating new products or services or improving existing ones to meet customer needs and market demands. This investment is crucial for staying competitive, expanding your market share, and driving growth. Whether it’s introducing a new product line, enhancing a current service, or innovating to solve a specific problem, development efforts help a business adapt to changing market conditions and customer expectations.

    How Much to Invest in Product and Service Development

    Businesses reinvest just under four percent of their revenue into R&D, according to NYU research. Naturally, industries such as pharmaceuticals, semiconductors, and software come in on the higher end, approaching or surpassing 20 percent, while others, such as transportation, come in at little more than one percent.

    What to Consider When Making a Product or Service Development Investment

    Investing in product or service development is a strategic move that can significantly impact your business’s growth and competitive edge. However, ensuring that your development efforts align with market demands and business goals requires careful consideration. Here are some key factors to keep in mind.

    Market Research

    Before investing in development, conduct thorough market research to understand customer needs, preferences, and pain points. Identify gaps in the market that your new or improved product or service can fill.

    Customer Feedback

    Leverage feedback from your existing customers to guide your development efforts. Understanding what your customers like and dislike about your current offerings can provide valuable insights into how to improve or expand them.

    Innovation and Differentiation

    Consider how your product or service will stand out from competitors. Innovation doesn’t always mean inventing something entirely new. It can also involve making significant improvements to existing offerings or delivering them in a unique way.

    Cost and Feasibility

    Assess the costs associated with development, including research, design, prototyping, testing, and marketing. Evaluate whether the potential returns justify the investment and whether your business has the resources to execute the development plan effectively.

    Time to Market

    Consider the timeline for bringing your product or service to market. Speed can be critical in fast-moving industries. Delays can result in missed opportunities or the risk of being outpaced by competitors.

    6. Infrastructure Investment

    Infrastructure investment refers to allocating resources toward building, maintaining, or upgrading the physical and organizational structures needed for a business to operate efficiently. This can include investing in facilities, machinery, technology systems, and even organizational processes. Infrastructure is the backbone of your business, enabling smooth operations, scalability, and the ability to effectively meet customer demand.

    What to Consider When Making an Infrastructure Investment

    Investing in your business infrastructure ensures long-term success and operational efficiency. However, these investments require careful planning and consideration to ensure they align with your overall business strategy. Here’s what to consider before committing resources to infrastructure.

    Business Needs and Growth Plans

    Assess your current and future business needs. Will the infrastructure support your growth plans? Consider whether your current facilities, equipment, and systems can handle increased production, more employees, or expanded services.

    Cost-Benefit Analysis

    Conduct a thorough cost-benefit analysis to evaluate whether the potential benefits of the investment outweigh the costs. This includes the initial expenditure, ongoing maintenance, and possible disruptions during the upgrade or build-out.

    Scalability

    Consider whether the infrastructure can scale as your business grows. Investing in scalable solutions now can save time and money in the future by reducing the need for frequent upgrades or replacements.

    Regulatory and Compliance Requirements

    Ensure that any infrastructure investments comply with industry regulations and standards. This is especially important in sectors with strict regulatory requirements, such as healthcare, finance, or manufacturing.

    Environmental and Sustainability Considerations

    Businesses are increasingly expected to consider their operations’ environmental impact. Investing in sustainable infrastructure—such as energy-efficient buildings, renewable energy sources, or waste reduction systems—can reduce your environmental footprint and appeal to environmentally conscious customers.

    7. Strategic Partnerships

    Strategic partnership investment involves forming alliances with other businesses or organizations to achieve mutual benefits. They’re often seen as one of the advantages of networking in business because they often happen organically, just by being in the right place at the right time. These partnerships can take many forms, such as joint ventures, collaborations, or long-term contracts, and can involve anything from sharing resources and expertise to co-developing products or services. The goal of strategic partnerships is to leverage each partner’s strengths to create value that would be difficult to achieve independently.

    What to Consider When Making a Strategic Partnerships Investment

    Strategic partnerships can be a powerful way to expand your business’s capabilities, reach new markets, and enhance your competitive edge. However, forming these partnerships requires careful consideration to ensure they align with your business objectives and deliver mutual value. Let’s take a look at what to consider when entering into a strategic partnership.

    Alignment of Goals and Values

    Ensure the potential partner’s goals, values, and vision align with yours. A strong alignment helps foster a collaborative relationship and ensures that both parties are working toward the same objectives.

    Complementary Strengths

    Look for partners whose strengths complement your own. For example, a company with strong distribution networks might partner with a business with innovative products but limited market reach. This synergy can lead to greater success for both parties.

    Clear Terms and Expectations

    Establish clear terms, roles, and expectations for the partnership. This includes defining responsibilities, contributions, profit-sharing arrangements, and how conflicts will be resolved. A well-drafted agreement helps prevent misunderstandings and ensures a smooth collaboration.

    Long-Term Viability

    Consider the long-term viability of the partnership. Will the relationship continue to provide value as your business grows and the market evolves? Ensure that the partnership is flexible enough to adapt to changes over time.

    Risk Management

    Assess the risks involved in the partnership and develop strategies to mitigate them. This could include legal risks, financial risks, or the risk of dependency on the partner. A thorough risk assessment will help you prepare for potential challenges.

    Be Ready for Your Next Investment: Kick Off a Strategic Partnership with Charter Capital

    With decades of experience and specialized expertise in industries like trucking, oil and gas services, staffing, and manufacturing, Charter Capital understands the challenges growing businesses face. Because of this, we provide tailored funding solutions that can help you bridge cash flow gaps or make crucial investments in your business to ensure long-term success. To ensure you’re ready when an opportunity to grow your business emerges, request a complimentary factoring quote now.

  • The Role of Invoice Factoring in Staffing Company Growth

    The Role of Invoice Factoring in Staffing Company Growth

    Staffing Company Growth 1 | The Role of Invoice Factoring in Staffing Company Growth

    Business growth always comes with challenges. However, in the staffing industry, these difficulties often intensify with every passing pay period. This is the nature of the industry, but it doesn’t have to be that way for your staffing company. On this page, we’ll explore why businesses like yours often struggle with cash flow and how staffing invoice factoring addresses these concerns head-on while improving other areas of your business.

    Financial Realities of the Staffing Industry

    The staffing industry is unlike any other, especially when it comes to financial challenges and the need for reliable cash flow.

    Unique Financial Challenges in Staffing

    It’s common for staffing companies to provide their clients with employees but not receive payment for their services until weeks or months after the work has been performed. However, you must still pay your staff weekly or bi-weekly, which creates a cash flow gap.

    This can be extremely challenging for small staffing firms and those experiencing rapid growth. For instance, a staffing company might secure a large contract that necessitates hiring many temporary workers quickly. While this is great for business growth, it also means the company must cover payroll expenses upfront without immediate reimbursement from the client.

    The Importance of Reliable Cash Flow

    Reliable cash flow is crucial. We’ll dig into some of the reasons for this below.

    Meeting Payroll Obligations

    Paying employees on time is non-negotiable. Failure to do so can lead to legal issues, employee dissatisfaction, and high turnover rates.

    Operational Stability

    Consistent cash flow ensures your company can cover its day-to-day expenses, such as rent, utilities, and other operational costs, without disruption.

    Growth and Expansion

    With steady cash flow, your staffing company can take on new clients and contracts, invest in marketing, and expand without worrying about financial shortfalls.

    Exploring Invoice Factoring

    Invoice factoring is a unique business funding solution that allows businesses to address cash flow gaps without going into debt by instantly turning their unpaid invoices into cash. It works well for businesses that provide work or goods to other businesses.

    What is Invoice Factoring?

    With invoice factoring, you sell your unpaid invoices to a third party, called a factoring company or factor, like Charter Capital. We advance most of the value of the invoice to you right away, then handle the collections process so you can focus on your business.

    At the onset of your factoring agreement, we’ll also explore the creditworthiness of your customers and provide you with some guidelines to help minimize risk with each client whose invoices you intend to factor. Then, you simply send the invoices to us whenever you need a quick cash injection, and we provide the cash up front.

    The Process of Invoice Factoring

    • Work: Send your team to work and invoice your clients like you normally do using your standard 30, 60, or 90-day terms.
    • Receive Immediate Payment: Send your factoring company a copy of the invoice. If you’re working with Charter Capital, you can receive payment for most of the invoice’s value on the same day.
    • Receive Balance: Your factoring company collects the balance from your client and follows up if needed. When the invoice is paid, you receive the remaining sum minus a small fee for the factoring service.

    The Financial Benefits of Invoice Factoring for Staffing Firms

    Invoice factoring is a flexible financial solution that meets the evolving needs of staffing companies. Unlike traditional loans, factoring is neither a loan nor a line of credit. It allows staffing agencies to access immediate cash by selling their unpaid invoices to a factoring company. This financial tool helps growing staffing agencies maintain operational stability without accumulating debt, making it a safer option for firms that are rapidly expanding or have unpredictable cash flow patterns.

    Factoring offers several distinct benefits for staffing companies. It provides fast access to working capital, allowing agencies to manage payroll, cover operational expenses, and pursue growth opportunities. Additionally, accounts receivable factoring reduces the burden of chasing down payments, as the factoring company handles collections. Many factoring companies also provide credit checks, helping agencies assess client risk and ensure they work with reliable customers.

    Choosing the right factoring company is key. The best staffing factoring companies provide customized solutions that address the specific needs of staffing firms, offering a reliable and straightforward way to ensure consistent cash flow and operational success.

    Advantages of Invoice Factoring Over Traditional Financing

    Traditional loans are often viewed as the ideal solution to bridge these types of cash flow gaps, but they’re not always accessible and may come with drawbacks that staffing companies don’t want.

    Quick Access to Cash

    Whereas banks can take weeks or months to pay out, factoring companies provide instant payment. This may be vital if you’re in a tight spot and need to cover an urgent expense like payroll.

    No Additional Debt

    Roughly one in five small and midsized businesses have outstanding debts that total $100,000 to $200,000, according to Business.com. It’s a heavy weight to carry, especially as interest rate hikes and pauses have made it difficult to pay off balances, as CNET reports. Many businesses are avoiding taking on new debt because of this. Factoring is one of the few funding solutions that align with this no-debt philosophy. 

    How Invoice Factoring Benefits Staffing Agencies

    Factoring provides many benefits to staffing agencies, primarily by addressing the cash flow challenges that arise from the gap between invoicing clients and receiving payments.

    Smooth Out Cash Flow Hurdles

    The delay in receiving payments from clients can create substantial cash flow problems, especially for smaller staffing firms and those experiencing rapid growth. Factoring helps by advancing a significant portion of the invoice value almost immediately after the invoice is issued. This infusion of cash smooths out cash flow and ensures your agency has the funds to continue operations without interruption.

    Stay Competitive

    In the competitive staffing industry, reliable payroll funding is crucial. Staffing agencies often struggle to manage cash flow due to long payment cycles from clients, even though they must pay employees regularly. Payroll factoring, also known as invoice factoring, addresses this challenge by providing an immediate cash advance based on the value of unpaid invoices. This liquidity allows staffing agencies to meet payroll obligations on time and retain top talent.

    Payroll factoring helps agencies focus on growth rather than seeking short-term loans or other financing. It provides fast access to capital, avoiding the complications of traditional financing. By working with a factoring company, staffing firms can avoid the delays often associated with bank loans. The factoring process is simple: invoices are submitted to a third-party factoring company, which advances most of the value immediately and collects payment from the client.

    Choosing a staffing factoring company that understands the unique challenges of the industry is essential. The best factoring companies for staffing offer funding solutions that stabilize cash flow and reduce administrative burden.

    Manage Payroll in a Timely Manner

    One of the biggest challenges for staffing agencies is meeting payroll on time. Employees expect their wages regularly, regardless of when your agency gets paid by clients. Factoring ensures that your agency has the cash needed to pay workers on time to maintain employee satisfaction and avoid legal issues related to delayed payments.

    Payroll Funding: A Lifeline for Staffing Agencies

    Payroll funding through invoice factoring is a critical resource for staffing agencies of all types. When agencies have to pay their staff on a weekly or bi-weekly basis but must wait for clients to pay their invoices, cash flow gaps can become a serious issue. Factoring for staffing agencies bridges this gap by providing immediate access to funds, allowing agencies to meet payroll obligations without delay. This is particularly beneficial for temporary staffing agencies and recruitment agencies that often operate with tight margins and fluctuating cash flow.

    Staffing factoring works by enabling your agency to sell outstanding invoices to a factoring company that offers payroll funding for staffing. The factoring company advances a percentage of the invoice value, typically 80 to 90 percent, to your agency, ensuring you can pay your employees on time. Once your client pays the invoice, the remaining balance, minus a small factoring fee, is forwarded to you. This process ensures that your staffing agency has the liquidity needed to operate smoothly, avoid legal complications related to late payroll, and maintain employee satisfaction, which is essential for long-term success.

    Grow and Expand

    With the steady and reliable cash flow factoring provides, your staffing agency can focus on growth opportunities. You can take on larger contracts, hire more employees, and expand services without worrying about how to fund these initiatives.

    Reduce Administrative Burden

    Factoring companies often provide additional services such as credit checks on clients and collections. This reduces administrative burden and allows you to focus on core activities like recruiting and placing employees.

    Build Better Client Relationships

    It’s better for your clients when they have longer payment terms, but it’s better for you to collect faster. Factoring allows you to provide your clients with the terms they want without creating issues for your agency. Plus, your factoring company takes over the collections process, which allows you to avoid any awkward discussions as due dates approach or pass.

    Benefits of Invoice Factoring for Staffing Agencies

    Invoice factoring is more than just a financial tool—it’s a lifeline for staffing agencies facing cash flow challenges. Unlike traditional financing, factoring for staffing companies provides a quick and reliable solution for maintaining operational stability. By advancing a significant percentage of the invoice value upfront, factoring companies for staffing agencies enable you to manage payroll efficiently, even when clients take weeks or months to pay their invoices. This is crucial for temporary staffing and recruiting agencies that must make payroll on time to keep operations running smoothly.


    Moreover, invoice factoring for staffing companies eliminates the stress of waiting for invoice payments, allowing you to focus on growing your business rather than chasing outstanding invoices. With competitive factoring rates and no hidden factoring fees, the cost of factoring is transparent, making it an attractive option for many staffing businesses. The factoring process is simple: send your invoices to a factoring company, and they advance the funds minus a small factoring fee, ensuring you have the cash flow needed to meet payroll obligations and expand your operations. This support is vital, especially for startup staffing agencies that need to stabilize cash flow quickly.

    Measuring the Impact of Invoice Factoring

    You can measure the impact of factoring on your staffing company through several key performance indicators (KPIs).

    Days Sales Outstanding

    Days sales outstanding (DSO) is a measurement of how quickly your business turns invoices into cash. Compare figures from before and after factoring. A significant reduction in DSO indicates improved cash flow stability.

    Cash Flow Forecasting Accuracy

    Tracking the accuracy of cash flow forecasts before and after factoring can allow you to identify improvements related to your cash flow prediction and management.

    On-Time Payroll Percentage

    Monitoring the percentage of payrolls met on time can highlight the direct impact of factoring on meeting payroll obligations. An increase in this metric signifies better payroll management.

    Payroll Processing Time

    Measuring the time taken to process payroll can show efficiency gains. Faster processing times may result from improved cash availability.

    Revenue Growth Rate

    Analyzing your growth rate before and after factoring can help you determine if the company is able to take on more contracts and clients due to improved cash flow.

    Client Acquisition Rate

    Similarly, tracking the number of new clients can help you identify how well factoring supports your growth.

    Administrative Cost Savings

    Factoring companies typically handle collections and credit checks, which reduces the administrative burden on your agency. Tracking changes in administrative costs can quantify the savings.

    Time Spent on Collections

    Measuring the time employees spend on collections and comparing it before and after factoring can highlight efficiency improvements.

    Bad Debt

    Because staffing factoring companies oversee collections and provide credit checks before factoring, many agencies see a reduction in bad debt. Compare before and after figures to see how your business is impacted.

    Debt-to-Income Ratio

    Assessing changes in the debt-to-income ratio can show how factoring influences your agency’s financial stability. A lower ratio indicates better financial health.

    Working Capital

    Tracking working capital levels before and after factoring can help you see how much additional liquidity your agency has to cover short-term obligations and invest in growth.

    Client Satisfaction and Retention

    Factoring can improve client relationships by ensuring smooth operations and avoiding disputes over payment terms or late payments. Monitoring client satisfaction scores and retention rates can show the impact of factoring in maintaining positive client relationships.

    Grow Your Business with Staffing Invoice Factoring

    Staffing invoice factoring may be a financial tool, but it has the potential to improve many areas of your business. If you’d like to boost working capital, ease payroll management, and more, request a complimentary factoring quote from Charter Capital.

  • 6 Common Bookkeeping Mistakes to Avoid

    6 Common Bookkeeping Mistakes to Avoid

    Avoid these bookkeeping mistakes.

    Think your business excels at accurate bookkeeping? It’s not as easy as it sounds, and even small errors or oversights can cause major issues as your business grows. On this page, we’ll review some of the most common bookkeeping mistakes that small businesses make, why it’s worthwhile to correct them, and actionable steps you can take right away to shore things up.

    1. Lack of Regular Reconciliation

    Regular reconciliation is a crucial component of financial management. When businesses fail to reconcile their accounts regularly, they risk overlooking discrepancies, which can lead to significant financial issues. For instance, if a transaction is recorded incorrectly or missed, it can create errors in financial statements, which may lead to poor financial decisions and potential cash flow problems.

    Understanding Bank Reconciliation

    Reconciliation involves comparing the company’s financial records with external records from banks, suppliers, and customers. This process allows businesses to identify and correct errors, ensuring records accurately reflect the business’s financial position.

    How to Address a Lack of Regular Reconciliation

    To avoid the issues associated with a lack of regular reconciliation, follow a standardized process and leverage financial tools, as outlined below.

    • Schedule Regular Reconciliation: Set a monthly schedule for reconciliation to catch errors early.
    • Use Accounting Software: Tools like QuickBooks, Xero, or FreshBooks can automate parts of the reconciliation process, making it easier and more accurate.
    • Reconcile All Accounts: This includes bank accounts, credit cards, and even petty cash.
    • Review Statements Carefully: Look for discrepancies in amounts, dates, and descriptions.

    Mastering Reconciliation: A Key to Financial Health

    Regular reconciliation is a cornerstone of good bookkeeping practices. By systematically comparing your business checking account records with external statements from banks and vendors, you can ensure your bookkeeping is accurate and up-to-date.

    For many small business owners, the task of reconciliation may seem daunting, but it’s essential for maintaining financial health. By catching errors early, regular reconciliation helps you avoid costly mistakes and ensures that you have a clear picture of your cash flow. A professional bookkeeper or accountant can streamline this process, saving you time and money while enhancing your ability to make informed decisions. Incorporating reconciliation into your bookkeeping system will keep your books accurate, helping you manage your business more effectively and focus on growth.

    2. Not Keeping Accurate Records

    Not keeping accurate records is a common mistake that can seriously affect small businesses.

    Why Accurate Records Are Essential

    Keeping accurate records is essential for many reasons.

    • Financial Clarity: Accurate records provide a clear picture of the company’s financial situation, which allows the owner to make informed decisions.
    • Tax Compliance: Proper records are necessary for tax reporting. Inaccurate or incomplete records can lead to errors on tax returns, which can result in fines or audits.
    • Cash Flow Management: Accurate records help businesses track cash flow. This is essential in ensuring the company has enough funds to cover expenses and invest in growth.
    • Loan and Investment Readiness: Lenders and investors require detailed financial records to assess a business’s viability. Without accurate records, it can be difficult to secure financing.

    How to Address Inaccurate Records

    Apply the following tips to avoid the pitfalls of inaccurate records.

    • Leverage Accounting Software: Besides helping with reconciliation processes, accounting software can help track income, expenses, invoices, and other financial transactions.
    • Stay Consistent: Update records regularly, ideally daily or weekly, to ensure they reflect current financial status.
    • Keep All Receipts and Invoices: Store physical copies of all financial documents, including receipts, invoices, and bank statements.
    • Train Staff: Ensure that anyone involved in record keeping understands the importance of accuracy and follows established procedures.
    • Conduct Regular Reviews: Review financial records periodically to identify and correct errors.

    3. Mixing Business and Personal Finances

    Mixing business and personal finances may seem natural. After all, 78 percent of small business owners use their own funds to launch their business, according to the U.S. Chamber of Commerce. Plus, more than half dip into their personal funds to cope with business challenges, according to the Bipartisan Policy Center. But, this is not a good practice and can create major issues as the business grows.

    Why You Shouldn’t Mix Business and Personal Finances

    Comingling finances can create several issues for businesses and business owners.

    • Lack of Financial Clarity: Mixing finances makes it difficult to determine a business’s profitability. Personal expenses mingled with business transactions obscure the true financial picture, leading to poor financial decision-making.
    • Tax Complications: If your business is a separate entity from you, as is the case with LLCs and corporations, the IRS requires you to keep separate financial records. Failure to do so can create tax issues for your business.
    • Limited Liability Protection: Mixing personal finances with corporate finances can make the line between them murky, which may put personal assets at risk if the business faces legal issues.
    • Difficulty in Securing Financing: Lenders and investors need clear records to assess business viability. Mixed finances make it challenging to present a credible financial history.

    Best Practices to Avoid Mixing Business and Personal Finances

     To avoid the issues associated with comingled funds, businesses should ensure accounts are always kept separate.

    • Open Separate Bank Accounts: Maintain distinct checking and savings accounts for business and personal finances.
    • Use Dedicated Credit Cards: Utilize business credit cards exclusively for business purchases and personal cards for personal purchases.
    • Leverage Accounting Software: Use your accounting software to keep track of all business finances so it’s clear they are separate.
    • Track Expenses Diligently: Ensure every business expense is documented and categorized separately.
    • Pay Yourself a Salary: Establish a regular, documented salary or owner’s draw to keep personal withdrawals clear and consistent.
    • Log Loans Appropriately: If you choose to use your personal funds for your business, ensure they’re logged as loans with the company and that repayment is tracked as such to create clear lines of distinction.

    Personal and Business Finances: Maintaining Clear Boundaries

    Mixing personal and business finances is a frequent mistake among small business owners, leading to significant challenges at tax time. To avoid this, maintain separate accounts. Open a dedicated business checking account for all business transactions. This separation is critical for accurate bookkeeping, preventing common errors such as misclassifying transfers as income or reimbursable expenses.


    When personal and business expenses are mingled, it complicates tax deductions and increases the risk of accounting errors. By keeping clear boundaries, you can avoid potential financial pitfalls and ensure your bookkeeping is accurate. A professional bookkeeper or accountant can help you establish these boundaries, ensuring that your financial records are clear and compliant. This practice not only saves time but also protects your business from costly errors.

    4. Neglecting to Back Up Financial Data

    Neglecting to back up financial data is a critical mistake that can have catastrophic consequences for a small business.

    Why Backing Up Financial Data is Crucial

    Backing up financial data is essential for a variety of reasons.

    • Protection Against Data Loss: Financial data can be lost due to hardware failures, cyberattacks, accidental deletions, or natural disasters. These losses can be irrecoverable without backups, putting the business at risk.
    • Business Continuity: Having backups ensures that a business can quickly recover from data loss incidents, minimizing downtime and making it easier for companies to maintain operations.
    • Regulatory Compliance: Many industries have regulations requiring businesses to maintain and protect financial data. Failure to back up data can result in non-compliance, resulting in fines and legal issues.
    • Trust and Credibility: Clients and partners expect a business to manage their data responsibly. Regular backups demonstrate a commitment to data security, which can enhance trust and credibility.

    5. Failing to Plan for Taxes

    Failing to plan for taxes is a common mistake that can lead to significant financial strain for small businesses.

    Why Planning for Taxes is Essential

    Because taxes are a significant expense for most small businesses, failing to plan for them can have major consequences. A few of the most common are outlined below.

    • Avoiding Surprises: Without proper planning, businesses may face large, unexpected tax bills that can disrupt cash flow and financial stability.
    • Minimizing Tax Liability: Effective tax planning helps businesses identify deductions, credits, and strategies to reduce overall tax liability.
    • Ensuring Compliance: Proper planning ensures businesses comply with tax laws and regulations to avoid penalties and audits. This is important, as the IRS can impose substantial fines for late or inaccurate filings.
    • Improving Financial Forecasting: Understanding tax obligations helps businesses develop more accurate projections and budgets, which is essential for making informed business decisions.

    6. Not Seeking Professional Help When Needed

    Failing to seek professional help when needed can hinder your business growth and financial health. Professional assistance in areas like accounting, tax planning, and legal matters can provide critical support and guidance.

    Why Seeking Professional Help is Important

    Building a solid network of financial pros to support your business can prove invaluable for many reasons.

    • Expertise and Knowledge: Professionals bring specialized knowledge and expertise that can prevent costly mistakes and optimize financial management.
    • Time Savings: Outsourcing complex tasks allows business owners to focus on core activities to increase overall productivity.
    • Compliance and Risk Management: Professionals help ensure businesses comply with regulatory requirements and avoid legal issues.
    • Strategic Planning: Experts can provide valuable insights for strategic planning that helps businesses make informed decisions about growth, investments, and risk management.

    How to Weave Professional Assistance into Your Operations

    Each business may benefit from partnering with different professionals or leveraging unique services.

    • Identify Key Areas for Assistance: Determine which aspects of the business could benefit from professional help, such as general bookkeeping, tax planning, business funding, or legal.
    • Choose the Right Professionals: Look for certified, licensed, and experienced professionals who understand the needs of your industry.
    • Network and Ask for Referrals: Seek recommendations from other business owners or industry associations to find reliable professionals.
    • Evaluate Cost vs. Benefit: Consider the potential return on investment when hiring professionals. Where there is a cost involved, the long-term benefits often outweigh the expenses.

    Avoid Common Bookkeeping Mistakes with Invoice Factoring

    Invoice factoring isn’t designed to help you avoid bookkeeping mistakes. It’s a form of business funding that provides you with instant cash by accelerating payment on your B2B invoices. However, in addition to providing cash instantly, the process helps you avoid some of the most common bookkeeping mistakes. For instance, your factoring company will verify the accuracy and validity of your invoices and provide records for all the invoices you factor, which aids in reconciliation. Your factoring company will also take over the collections process for you, operating much like an outsourced collections department. Plus, you’ll benefit from cash injections as needed, which can be helpful if you need to purchase accounting software, pay for professional help, or cover any other expense associated with improving your bookkeeping.

    As a top-rated factoring company with more than two decades of experience, Charter Capital makes factoring easy with same-day funding, no long-term contracts, and competitive rates. To take the first step toward a brighter financial future, request a free factoring quote.

  • 6 Types of Business Insurance You Can’t Afford to Ignore

    6 Types of Business Insurance You Can’t Afford to Ignore

    Explore the most common types of business insurance and how they work in this detailed guide.

    Would replacing a $1,000 laptop be challenging for your business at times? What about paying $10,000 in medical bills for a client who slips and falls at your business, $100,000 for giving a client bad advice, or $1,000,000 to restore operations after a fire? Each business has a point at which recovering from an unexpected event will prove challenging or perhaps even impossible. As part of your risk management and financial planning, it’s crucial to invest in insurance that can shield your business from these potential financial blows.  This includes not only policies like general liability and property coverage, but also often-overlooked essentials like health insurance for independent contractors, especially for self-employed professionals and freelancers who don’t have access to employer-sponsored plans. In this guide, we’ll explore six common types of business insurance that could be a lifesaver for your business, depending on your unique needs.

    1. General Liability Insurance

    General liability insurance protects your business from claims involving bodily injury, property damage, and personal injury, such as defamation or false advertising. It helps cover the costs associated with legal defense and settlements so you can focus on running your business without worrying about a potential lawsuit.

    Key Concepts of General Liability Insurance

    • Bodily Injury: This covers medical expenses and legal fees if someone is injured on your business premises. For example, if a customer slips and falls, this insurance can help pay for their medical treatment and any legal claims they make.
    • Property Damage: If your business operations damage someone else’s property, general liability insurance can cover the repair or replacement costs. For instance, if you accidentally damage a client’s property while providing a service, the insurance will step in.
    • Personal and Advertising Injury: This includes coverage for claims of libel, slander, and copyright infringement related to your business advertising activities.

    Why General Liability Insurance is Important

    • Legal and Financial Protection: It helps protect your business from the high costs of lawsuits and claims. For instance, a typical slip and fall case settles for between $10,000 and $50,000, Forbes reports. Some cases reach well into the millions. These outcomes can be devastating for a business without insurance.
    • Client and Contract Requirements: Many clients and business partners require proof of liability insurance before working with you. It shows you’re responsible and prepared for potential risks.
    • Peace of Mind: Knowing you have coverage allows you to focus on growing your business without worrying about unexpected legal and financial setbacks.

    2. Product Liability Insurance

    Product liability insurance covers legal costs and damages if a product you sell, manufacture, or distribute causes injury or property damage to a customer. This type of insurance is essential for any business that deals with physical products, as it helps mitigate the financial risks associated with product-related lawsuits.

    Key Concepts of Product Liability Insurance

    • Manufacturing Defects: These are flaws that occur during the manufacturing process. For example, a batch of electronics may have faulty wiring that leads to fires.
    • Design Defects: These are inherent flaws in the product design that make it unsafe. For instance, a poorly designed children’s toy could pose a choking hazard.
    • Marketing Defects: These include improper labeling, insufficient safety warnings, or inadequate instructions. For example, a pharmaceutical company may fail to warn users about a medication’s potential side effects.

    Common Claims Covered by Product Liability Insurance

    • Injuries from Defective Products: Roughly 29,000 people are injured by defective products every year, according to the U.S. Consumer Product Safety Commission. Product liability insurance can cover medical expenses and legal fees if a customer is injured while using a product as intended.
    • Property Damage: If a product causes damage to a customer’s property, such as a malfunctioning appliance starting a fire, this insurance can cover the costs of repair or replacement.
    • Legal Defense Costs: In the event of a lawsuit, product liability insurance covers the cost of legal defense, including attorney fees and court costs.

    Why Product Liability Insurance is Important

    • Financial Protection: Lawsuits related to product defects can be extremely costly. For instance, a single product liability claim can result in millions of dollars in damages, which would be catastrophic for most uninsured small businesses.
    • Compliance and Contracts: Many retailers and distributors require proof of product liability insurance before agreeing to carry your products. It demonstrates your commitment to safety and responsibility.
    • Reputation Management: Handling product-related claims efficiently helps you maintain customer trust and protect your business’s reputation. Customers are more likely to trust a company that takes responsibility for its products.

    3. Professional Liability Insurance

    Professional liability insurance, also known as errors and omissions (E&O) insurance, covers legal costs and damages if your client sues your business for errors, omissions, or negligence in your services. This type of insurance is particularly important for service-oriented companies such as consultants, accountants, lawyers, and medical professionals.

    Key Concepts of Professional Liability Insurance

    • Negligence: This involves failing to exercise the level of care expected of a professional, leading to client harm. For example, an accountant might make a mistake on a tax return that results in penalties to the client.
    • Errors and Omissions: These are mistakes or oversights in the services provided. For instance, a software developer might miss a critical bug that causes a client’s system to crash.
    • Defense Costs: Professional liability insurance covers the costs of defending your business against claims, even if the claims are unfounded.

    Common Claims Covered by Professional Liability Insurance

    • Incorrect Advice: Professional liability insurance can cover the resulting claims if a consultant provides faulty advice that leads to financial losses for a client.
    • Mistakes in Services: For example, if a web designer fails to meet a project’s specifications and causes the website to malfunction, the insurance can cover the costs of correcting the issue and any legal claims.
    • Missed Deadlines: If a professional misses a critical deadline that results in a financial loss for the client, this insurance can help cover the damages.

    Why Professional Liability Insurance is Important

    • Financial Protection: Lawsuits related to professional services can be costly. For example, the cost of defending and settling a professional liability claim can easily reach $100,000 or more.
    • Client Contracts: Many clients require proof of liability insurance before engaging your services, as it assures them they’re protected against errors.
    • Reputation Management: Handling claims professionally helps you maintain your reputation and client trust. Clients are more likely to continue working with a business that takes responsibility for its services.

    4. Commercial Property Insurance

    Commercial property insurance covers your business’s physical assets from a wide range of risks. This includes your building, if you own it, the contents within the building, and sometimes even the property outside the building, such as signage and landscaping.

    Key Concepts of Commercial Property Insurance

    • Building Coverage: This protects the physical structure of your business.
    • Contents Coverage: This includes protection for the items inside your building, such as equipment, furniture, inventory, and supplies.
    • Business Interruption: Some policies include coverage for loss of income and operating expenses if your business is temporarily unable to operate due to a covered event.

    Common Claims Covered by Commercial Property Insurance

    • Fire Damage: There are more than 108,000 non-residential fires each year, according to the U.S. Fire Administration. Fires can cause extensive damage to your building and its contents.
    • Theft and Vandalism: If your business is broken into and equipment or inventory is stolen, commercial property insurance can help cover the replacement costs.
    • Natural Disasters: Damage from events like hurricanes, tornadoes, and floods can be covered, depending on the specifics of your policy and the types of insurance you collect.

    Why Commercial Property Insurance is Important

    • Asset Protection: It ensures that your business’s physical assets are protected against unexpected events. For example, replacing damaged equipment can be extremely costly without insurance.
    • Financial Stability: In the event of significant property damage, this insurance helps you avoid financial strain by covering repair or replacement costs and, in some cases, covering lost income during the recovery period.
    • Lender Requirements: If you have a mortgage or loan for your business property, the lender typically requires you to have commercial property insurance to protect their investment.

    5. Home-Based Business Insurance

    Home-based business insurance is designed to cover the unique risks that home-based businesses face. It typically includes a combination of coverages, such as general liability, property insurance, and business interruption insurance, tailored to the specific needs of a business run from home.

    Key Concepts of Home-Based Business Insurance

    • Business Property Coverage: This protects business equipment, inventory, and supplies used for business purposes at your home. It covers risks like theft and fire.
    • Liability Coverage: This includes protection against claims of bodily injury or property damage related to your business activities. For example, if a client visits your home office and gets injured, this coverage can help with medical and legal expenses.
    • Business Interruption: This coverage helps replace lost income if you cannot operate your home-based business due to a covered event, such as a fire or natural disaster.

    Common Claims Covered

    • Theft of Business Equipment: If your business laptop or other essential equipment is stolen from your home, home-based business insurance can cover the replacement costs.
    • Client Injuries: If a client slips and falls while visiting your home office, this insurance can cover medical expenses and legal fees.
    • Property Damage: If a fire damages your home office and business inventory, the policy can help cover the costs of repairs and replacements.

    Why Home-Based Business Insurance is Important

    • Comprehensive Coverage: A standard homeowner’s policy does not typically cover business-related losses or liabilities. Home-based business insurance provides the necessary protection for your business assets and activities.
    • Financial Protection: This insurance helps cover the costs of unexpected events that could otherwise result in significant out-of-pocket expenses. For example, replacing a stolen laptop can easily cost $1,000 or more, which can strain finances without insurance.
    • Professionalism and Credibility: Having appropriate insurance shows clients and partners that you take your business seriously and are prepared for essential risks.

    6. Business Owner’s Policy

    A business owner’s policy (BOP) combines general liability insurance, commercial property insurance, and often business interruption insurance into a single policy. This package covers businesses’ most common risks, providing broad protection and simplifying the insurance process.

    Key Components of a Business Owner’s Policy

    • General Liability Insurance: Covers claims of bodily injury and property damage.
    • Commercial Property Insurance: Protects the physical assets of your business.
    • Business Interruption Insurance: Covers the loss of income and operating expenses if the business is temporarily unable to operate.

    Additional Components of a Business Owner’s Policy

    Depending on your insurer, a BOP can often be customized with additional coverage to meet specific needs, such as:

    • Cyber Liability Insurance: Protects against breaches and cyberattacks.
    • Equipment Breakdown Insurance: Covers repair or replacement of broken equipment.
    • Professional Liability Insurance: Covers claims related to professional services and advice.

    Why a Business Owner’s Policy is Important

    • Comprehensive Coverage: A BOP provides a broad range of protections in one package, covering the most common risks businesses face. This ensures you are well protected from various potential losses.
    • Reduced Cost: Your premium will usually be lower when you bundle multiple policies into one. This makes it a cost-effective option compared to purchasing individual policies.
    • Simplified Management: Managing one policy with a single renewal date simplifies the administrative burden of handling multiple insurance policies.

    Safeguard Your Cash Flow with Factoring

    Eight in ten small business failures can be traced back to cash flow issues, the National Federation of Independent Businesses reports. That’s not surprising because so many things impact your cash flow, from the speed of customer payments to seasonality, everyday expenses, and often catastrophic situations like these insurance policies cover.

    Although invoice factoring is not insurance, it can help stabilize your cash flow and ensure you have working capital when your bank account might otherwise be empty. With factoring, you sell your unpaid B2B invoices to a factoring company like Charter Capital. We advance you most of the invoice’s value immediately, then wait for payment from your client. You receive the final balance minus a nominal fee for the service when your customer pays their invoice. The cheapest factoring companies offer competitive rates, helping businesses maintain cash flow without overpaying for factoring services.

    Factoring is flexible. You factor all your invoices all the time, some of them, or just factor select invoices occasionally as the need for instant capital arises. If you’d like to safeguard your cash flow and have access to factoring services, whether you need money now or may need it down the line, request a complimentary rate quote.

  • How to Use Customer Feedback to Boost Small Business Growth

    How to Use Customer Feedback to Boost Small Business Growth

    Learn how to get the feedback you need and what to do with it in this detailed guide.

    Customers are speaking up. Is your brand listening and turning their words into actionable strategies to grow your business? On this page, you’ll learn how to find and solicit customer feedback and what to do with the information you learn to boost your business growth.

    What is Customer Feedback?

    Customer feedback refers to the information clients share about a business and their experiences with it.  It’s often split into two categories: unprompted and prompted.

    When the business doesn’t ask for the feedback, it’s considered “unprompted.” This is often the case with customer reviews left on sites like Yelp or Google.

    When the business requests information, it’s called “prompted.”  Surveys businesses send to clients to gauge their overall happiness are a prime example.

    Benefits of Gathering Customer Feedback

    There are lots of benefits of customer feedback. We’ll explore a few below.

    Learn More About Your Audience

    The data you gather can help you understand the needs and wants of your customers better so you can tailor your offerings to them and ensure your marketing efforts resonate with them.

    Understand Customer Happiness

    Depending on how you gather data, you can either get a holistic view of customer happiness, which often indicates the likelihood of long-term business success, or you can identify the churn risk for specific customers and take steps to boost their happiness before they leave.

    Train Your Team

    Customer feedback can reveal issues with quality and service. You can then take steps to improve the customer experience and train your team to create a more customer-centric culture. Feedback can also be used to celebrate wins and demonstrate what a great experience entails. This is a great way to boost morale, too.

    Improve Products or Services

    Often, customer feedback includes ideas to improve your products or services or highlights pain points the team can brainstorm on and address when enhancing your offerings.

    Kickstart Discussions and Improve Issues

    Each time a customer speaks, it presents an opportunity for your brand to hear them out and address their concerns.

    How to Gather Customer Feedback

    There are lots of different ways to gather customer feedback. We’ll review a few below.

    Review Sites

    In all, 38 percent of people leave reviews after a positive experience, ten percent do so after a negative experience, and 25 percent do so after both positive and negative experiences, per BrightLocal surveys. In other words, people are already leaving you feedback that you may not be seeing.

    Be sure to claim your profiles on sites like Google Business and Yelp so you’re notified when someone reviews your business and participates in the discussion.

    Social Listening

    Mentions of your brand can appear anywhere on the web. Use a social listening tool to monitor for your company name, products, or other branded terms so you know what’s being said. For instance, Google Alerts is a free service and will notify you when any terms you select appear in Seach.

    Surveys

    Surveys are a simple way to gather prompted feedback. If you go with a lengthier survey, be prepared to incentivize users to increase completion rates. Shorter surveys can be equally helpful and will likely have higher completion rates. A few of the most popular short surveys are covered below.

    Customer Satisfaction (CSAT) Survey

    The CSAT survey asks a single question: “How would you rate your overall satisfaction with the [goods/service] you received?” Respondents are asked to provide a rating between one and five, with five being extremely satisfied and one being very unsatisfied.

    Once you gather up all responses, add the total number of four and five ratings, then divide it by the total number of responses and multiply by 100 to get the total percentage of satisfied customers.

    Average CSAT scores vary by industry and business. You can partner with a survey company that’s familiar with your industry or manage the survey independently, monitor how it changes over time, and focus on continuous improvement.

    Net Promotor Score (NPS) Surveys

    NPS surveys work similarly to CSAT surveys, but they measure customer loyalty. The NPS survey also asks a single question: “How likely is it that you would recommend [this organization, product, or service] to a friend or colleague?” Respondents are asked to provide a rating between zero and ten, with ten being extremely likely and zero being very unlikely.

    Those who provide an answer of zero through six are considered your “Detractors.” They’re unhappy customers who may damage your brand and slow your growth through their negative comments. Those who provide scores of seven or eight are considered “Passives.” They’re satisfied but aren’t enthusiastic about your company and may be vulnerable to competitors. Lastly, those who score nine or ten are your “Promoters.” These people will likely spread positive sentiments about your brand, refer others, and help your company grow.

    To calculate your NPS, subtract your total percentage of Detractors from your total percentage of Promoters.

    Again, each industry is different. For instance, health insurance companies score an average of 7.1, while wireless providers score an average of 18.7, per Qualtrics. You may want to partner with an experienced survey company or send NPS surveys periodically to monitor your progress.

    Customer Effort Score (CES)

    CES surveys measure your customer experience and are a little more versatile. For instance, they can help you identify the ease with which customer service helps someone solve an issue, how easy it is to find information, or how easy it is to use your products or services. This survey may be useful because ease is a strong driver of loyalty.

    CES uses a single question as well: “[Organization] made it easy for me to [issue being addressed].” For instance, “XYZ Widget Co. made it easy for me to exchange my product” or “XYZ Widget Co. made it easy for me to order widgets in bulk.”

    Respondents are asked to provide a rating between one and seven, with seven indicating they strongly agree and one indicating they strongly disagree. Average scores can be tracked over time to help gauge the experience your brand provides.

    Follow-Up Calls

    One of the best times to gather feedback directly from customers is a short time after their order is fulfilled. In this case, a member of your team calls to ensure things are going well, asks a question or two of your choosing, and provides assistance if needed. This approach is labor-intensive, but it also allows you to solve issues and identify opportunities for improvement proactively.

    Focus Groups

    Focus groups involve gathering a group of current customers or people who share traits with your customers and requesting their feedback. Feedback analysis from focus groups is often used when developing new products or services to help ensure the approach is a good fit for the market.

    Exit Intent Surveys

    Exit intent surveys occur on your website and are generally triggered by the user as they move their mouse to the toolbar at the top – a sign that they’re leaving. These give you the opportunity to find out why someone is visiting your website and identify how well your site is meeting user needs.

    How to Grow Your Business with Customer Feedback

    Now that we’ve explored some ways to gather customer feedback let’s examine how you can use that information to grow your business.

    Improve Products or Services

    Nine in ten people say companies should fuel innovation by listening to customers and buyers, SurveyMonkey reports. Develop a system for shortlisting ideas and adding them to your implementation roadmap. For instance, an idea that can be implemented almost effortlessly will likely land near the top of your list, while one requiring more resources will be earmarked for later implementation. The number of requests for the improvement and perceived benefit of implementation should also be considered.

    Strengthen the Customer Experience

    If your feedback reveals opportunities to strengthen the customer experience, take action whenever possible. You can also use the information to identify gaps in the experience, train your team, and help prioritize feedback initiatives.

    Don’t forget to celebrate wins with your team, especially if a person or department is mentioned by name. This can dramatically boost morale, which also impacts overall customer satisfaction.

    Improve Your Business Reputation

    As BrightLocal data shows, 88 percent of consumers prefer brands that respond to all reviews, while little more than half are likely to use a business that only responds to positive reviews or only responds to negative reviews. For this reason, it’s essential to respond to all reviews.

    Improve your business reputation with a reputable factoring company by partnering with factoring companies that prioritize customer feedback and ensure fast and transparent funding.

    Develop a process for replying to reviews and ensure the person responding has pre-approved statements that can be used. This way, all responses are befitting of the brand.

    Weave Feedback into Your Marketing

    Don’t forget to share the news when customer feedback is used to make improvements. Customers appreciate being heard, and your happiness scores are likely to get a boost. Mention that initiatives are the result of customer feedback in emails, on social media, as you send out future surveys, and more.

    Feedback can also be shared on your website. For instance, you may wish to develop a testimonials page and share positive customer feedback there. You may also boost conversions by including feedback on action-oriented pages, such as below an order form or contact form.

    Get the Capital You Need to Implement a Customer Feedback Strategy

    While many customer feedback strategies are relatively inexpensive, you may need a quick cash injection to kickstart a partnership with a survey company, purchase software, or implement ideas you uncover. Reputable factoring companies can help by accelerating payment on your B2B invoices and giving you immediate payment without putting your business in debt. To explore the fit for your business, request a complimentary rate quote