Square Eliminates Flat Fee For Small Businesses

You may be using Square, the pocket-sized credit card reader, as a way of accepting payment on plastic while avoiding a lot of extra fees. If so, Square has some bad news for you.

The company announced recently it will be discontinuing a monthly $275 flat fee for businesses processing less than $250,000 annually.

These Square users will now pay the same 2.75 percent swipe fee per transaction larger customers do.

(On its website, Square says some larger customers can get additional breaks on swipe fees. But the company isn’t specific how much revenue must be generated to get those lower rates.)

In the announcement, the company said the decision was based on customer feedback. But a conciliatory tone also suggested the knowledge some would be unhappy:

Over the past year we heard from many of our customers that caps and limits in the program were inhibiting growthâ€"at a certain point, rates went back up the more you sold. So, effective February 1, 2014, we’re replacing the Square monthly pricing program with one low per-swipe rate for your business.

Of course, Square also stressed it still doesn’t charge the annual activation, setup or cancellation fees credit cards do.

In truth though, the change will cost some small businesses considerably more.

Launched back in August 2012, the flat or monthly fee program was meant to entice small businesses into giving Square a try, Venture Beat reported at the time.

These businesses now go from paying a flat fee for using the card to paying a fee on each transaction.

To put this into perspective, Square explains its 2.75 percent swipe fee would leave bout $97.25 out of every $100.00 transaction.

And manually entered transactions would cost more: 3.5 percent plus a 15 cent manual transaction fee. So that leaves $96.35 out of every $100.00. (You get the idea.)

Sure, bigger customers with more revenue must already pay these fees. And Square may claim its “inhibiting growth” because sellers are suddenly paying more once their sales increase.

Still, it may be unwise to change a policy meant to make the service more attractive to smaller businesses in the first place.

Image: Square

Vonage Acquires Vocalocity, Increasing Its Small Business Footprint

Vonage has acquired Vocalocity in a $130 million transaction.  In so doing, Vonage â€" which is best known as a provider of residential VoIP phone services â€" has increased the number of small business customers it serves.

Vocalocity started in 2006 as a provider of VoIP services.  VoIP stands for “Voice over Internet Protocol,” a phone system that connects via the Internet instead of traditional phone lines and switches.  At the time of the acquisition, Vocalocity had 23,000 small business customers.  Vonage, which has 2.4 million total subscribers, doesn’t release its numbers specifically for small business customers, but it already had a sizeable number of SMBs as customers, as well.

The small-business VoIP service in the combined company will now be marketed under the Vonage Business Solutions brand. Vonage’s third quarter 2013 earnings release stated:

“This transformative acquisition will place Vonage at the forefront of the large and rapidly growing small and medium business market.”

Translation?  Vonage is now one of the largest providers of VoIP services to the SMB market.

And the market size for hosted VoIP services to small businesses is significant.  According to a July 2013 report by Frost & Sullivan, the SMB market alone for VoIP is $15 billion annually.

Yet, 85% of small businesses are still using traditional phones, estimates Wain Kellum, President of the new Vonage Business Solutions, and formerly Vocalocity’s CEO.  He told us in an interview that small businesses not using VoIP are missing out on benefits.

When small business owners first learn about VoIP,  he said they initially are attracted due to the cost savings.  On average, VoIP can reduce monthly phone costs by around 30% â€" depending on how many calls the business makes, what percentage are international calls, and other factors.  It’s only later that the business owners come to understand the operational improvements that a VoIP system can bring, Kellum added:

“A lot of small business customers come to us because we take their existing phone bill and cut it significantly.  But then they discover all the things you can do with a cloud-based phone system.    It can give a small business new ways of doing things that a traditional phone system can’t.  One of the advantages of a cloud-based VoIP system is that you can integrate with other cloud services.  For instance, your customer service personnel can see a QuickBooks record about a past due payment when a customer calls in, and can issue a verbal reminder.”

While the term “cloud” is still confusing to some, the conversation has gotten a lot easier now that there are more business services in the cloud, Kellum said. “We just explain that they currently buy things at places such as Amazon over the cloud, or Internet.  Today they can buy their phone service through the cloud, too.”

Kellum says that Vocalocity small business customers will benefit from the acquisition. For one thing, they immediately get a reduction in international calling rates. Vonage touts “long distance rates to the most frequently called countries that are, on average, 75% lower than the competition.”

Small business customers of Vocalocity will also soon get extended service hours. Vocalocity’s service hours are 9 am to 9 pm Eastern time. By the end of the year customer service will be available to them 24/7, Kellum said.

Vocalocity customers will also see more product innovation due to the increased resources of Vonage being available, he also anticipates.  Vonage is much larger than Vocalocity.  Vonage currently has a market cap of $668 million.

Most of Vocalocity’s customers are small businesses with 50 or fewer employees, Kellum said.  ”Our sweet spot was 25 employees and under,”  although the company also has customers with up to 500 employees, he added.

Vocalocity was founded in Atlanta by Boris Jerkunica, owner of the Atlanta Silverbacks soccer team.  Vonage is headquartered in Holmdel, New Jersey, with operations  in the U.S., Canada and United Kingdom.  Marc Lefar is Vonage’s CEO.

Image: Shutterstock mobile/Vonage remix

How to Keep Your Health and Sanity While Working From Home

Telecommuting is stressful. Running a full-time business from home is, perhaps even more straining. I know it and you probably do too.

Whether you’ve been doing it for a while like me, or you’re going to start working from home soon, below are some really useful tips on how to work from home without crawling the walls - and without “growing into your house” if you get what I’m saying.

Please keep in mind that most of the information you’re about to read is nothing ground-breaking. It’s from my own personal experience. Much of what I’ve learned while running my online business has been learned the hard way - by waking up out of a daze on several occasions and realizing that working from home is a “J.O.B.”

You have to treat your home-based business, or telecommuting job like you would a day at the office. You have things to do, and if they don’t get done, you don’t get paid. Plain and simple. If you can’t accept that fact, just don’t telecommute.

I’m not going to tell you how to run your business in this article, rather I’m going to give advice on staying sane and healthy.

1. Get Up and Get Dressed

This might sound silly. Who doesn’t wanna roll out of bed and work in their pajamas?

The simple fact of the matter is that getting dressed has a psychological-boosting effect on your mind and body. Even if you don’t have clients or employees that come by the house, you have to put some clothes on.

It helps you to feel like a productive member of society. After a few days of sitting around in your pajamas, you’ll start to feel the walls closing in. Like you’re trapped and not allowed to leave the house. Cabin fever isn’t a phenomenon that only applies to any mountain men you may know.

2. Start Every Day Early and with Exercise

I bet you thought I was going to tell you to get up and eat a hearty breakfast, or to get your “to do” list together.

Nope, you have to do something physical to get your brain working and your metabolism fired up. Exercise stimulates serotonin (happy hormone) production and will give you a calorie-burning boost that will last several hours while you’re sitting in your desk chair.

One of the worst pitfalls that comes with working from home is feeling like you have a license to be lazy and sleep in.

“The early bird gets the worm” is still one of the most fundamentally true quotes. Don’t throw away that alarm clock, at least until you’re retired.

3. Eat a Healthy Breakfast and Start Planning Your Day

I would actually say that you should skip breakfast, but that would raise some controversies. So the best thing for you is to eat healthy breakfast. Keyword healthy: Eating lots of bacon in the morning is not necessarily a healthy way to start your day.

For some of you, this is going to be one of those expedited processes that you don’t allot much time to. That’s okay. Consider starting the day with a protein shake and a bit of oatmeal, or some other kind of slow-digesting carbohydrate meal. Lots of carbs are important for intense exercise, but will make you fat and your blood sugar levels soar if you’re not terribly physically active while you work.  (Yes farming is technically considered working from home, but this post refers to working within the four walls of a house.)

Elevated blood sugar levels strain your body and cause dizziness, elevate blood pressure, incite fatigue and cloud your thinking (proof.) None of these things will contribute to your well-being or effectiveness. As always, consult with a nutritionist on how to start your day with the right kind of breakfast.

While you’re making your meal and/or eating it, concentrate on formulating a brief outline of what you’re going to do for the day. Some people like to write these items down. This helps get you into a working mindset, without diving right in and feeling overwhelmed.

Don’t watch television during this time. It’s much more rewarding to do something you ‘want’ to do later, after work. By contrast, nothing feels worse than realizing an entire day, or even an all-important hour of work time got away from you because you got sucked into a morning talk show or movie.

4. Take 15 Minutes Every Two Hours

This is another tip that can be personalized to your own schedule and preferences. Perhaps you can go four hours comfortably without a break. Nonetheless, you have to take some time away from the computer or phone to unwind.

This is a great time to grab a healthful snack, jump on the treadmill, do some pushups or pullups, etc. A little exercise is great for getting the blood flowing, especially to your back and neck, which take a lot of abuse while sitting. Forum or social media posting is also good for a psychological boost, so long as it isn’t of the negative variety.

Don’t watch television, unless you have to watch the news for your job. Again, this can break your focus. It’s really crucial to keep on a schedule and to make sure that you’re working again within a short time period.

5. Wear Noise Reducing Headphones with Classical Music

When I have many tasks I need to get done quickly, nothing beats noise-reducing headphones. Those of you who can work with bombs going off around you might not benefit from this advice. But believe me, anyone who’s easily distracted needs noise reducing headphones.

I prefer classic or baroque music, anything without vocals. Non-vocal music has proven effects on improving productivity and the way your brain processes and develops information.

If you begin to incorporate even just a few of these methods into your workday, you’ll maintain a healthy balance.

Frustrated Photo via Shutterstock

You Can Solve Problems With “Design Thinking”

You Can Solve Problems With “Design Thinking”

Stories of all scales can stir people when facing a giant task.  Some Christians imagine the story of David and Goliath.  History buffs may think of the small band of Greeks that held off the Persian Army at the Battle of Thermopylae.  Kids, be it small or of the heart, imagine themselves as a favorite …

Content

Usefulness

Freshness

88

Summary

This book provides a refreshed view of problem solving and delivering innovation and provides examples meant to be a blueprint for implementing design thinking in your organization.

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Stories of all scales can stir people when facing a giant task.  Some Christians imagine the story of David and Goliath.  History buffs may think of the small band of Greeks that held off the Persian Army at the Battle of Thermopylae.  Kids, be it small or of the heart, imagine themselves as a favorite hero.

But when you consider the start up world, stirring inspiration is no small request. For entrepreneurs, many days can feel as if the metaphorical slingshot, sword and shield for business success is nowhere to be found.

To break that missing-slingshot feeling, businesses can examine what to do to improve the processes supporting its products and services.  One theory of approach is design thinking.  Yet misperceptions and poor applications of it exist.   The book Solving Problems With Design Thinking: 10 Stories of What Works offers the best success stories meant to inspire new approaches.

The authors Jeanne Liedtka, Andrew King and Kevin Bennett have conducted extensive research and bring even more extensive backgrounds. Liedtka served as an associate dean at the Darden School of Business at the University of Virginia. King is a research associate at Darden, while Bennett serves as a manager for marketing and partnership development at Personal, a technology start-up in Washington, D.C.  All three bring extensive viewpoints on organizational strategy.

The authors assert from research that there are four stages of design thinking:

• What is - The current reality of the product.
• What if - envision multiple realities of how a product or service is used.
• What Wows - Refinement of what is accessible with the resources available.
• What Works - simply put, what can be done.

Think SWOT combined with brainstorming, and you get the general idea behind the framework. On the same page that the stages are explained there is an image to reflect the “divergence” and “convergence” of design thinking-related options:

Notice how much larger the “What If” is meant to be - the broadening of options, while the “What Wows and Works” filters the ideas to practical choices.

The authors go on to provide 10 examples of design thinking in practice. Most occur within large corporations - IBM’s trade show branding case is listed first - but an examined start up, MeYou Health, scales its lessons-learned for smaller firms among these presented findings.

All the examples are meant to be a blueprint for implementing design thinking in a variety of organizational activities, from internal communication to improving customer engagement.

The authors also note the politics that can arrive from applying Design Thinking principles.  One such idea is the Moses Myth - the idea managers hold that they are not creative or even have to be creative.  In fact, the authors shared management perceptions from a previous study, and dispelled some myths, such as this one on sharing training with managers:

“…those that defined it (design thinking) as something that trained designers do did not see it as a useful tool set for managers to acquire. They not only doubted whether it was possible for managers to acquire those skills, but also thought it was a bad idea to encourage them to even try. Managers trying to do design work were likely to lower the quality and credibility of design! We heard the opposite view from other experts: Mangers not only could become design thinkers, but should - so powerful was the process for finding innovation. ”

The authors show managers and designers working to best implement processes that will serve their organization well. The summary highlights a few key takeaways, such as how collaboration is possible with design thinking practices:

“Not a single store features a lone actor, a Steve Jobs driving innovation by dint of personal genius. Our stories are full of people who are different from one another co-creating with one another…”

There are other books that can take the topic of innovation planning further. From the ones I have reviewed here on Small Business Trends, The Other Side of Innovation would be a good bet.  Another selection, best for businesses with service offerings, is Service Innovation.  And for fitting design thinking into start up pitches, Venture Capital Investing can provide a framework for questions in context to your market as well as requesting for capital.

But on its own, Solving Problems With Design Thinking provides a refreshed view of problem solving and delivering innovation.  Place this book on your next project planning for your business.