Do I need a business credit card?

You’ve already got one personal credit card – or maybe more. So do you really need one for your business too?

Having a credit card for business use can actually be a very smart move.  This is because a credit card can effectively give you a one month interest-free loan – if you use it responsibly, that is. Businesses often find they need to pay for something while they are waiting to be paid themselves. So you’ve earned the money, but your client hasn’t yet paid you and in the meantime you need to buy more stock, a credit card can help you bridge this gap.

Another reason for using a credit card is that you are more likely to get your money back if you’re a victim of fraud than you are with a debit card.

But do you really need to go out and get a business credit card? If you’re just starting out and you’re not spending much on your business, then it may just be easier to use your personal credit card. (You may want to check the card’s terms and conditions to make sure they allow this, though). But once you’ve got going, it’ll probably be easier if you separate your business credit card purchases from your personal ones.

Here are some things to think about when you compare credit cards:

APR (Annual Percentage Rate)

This is the annual charge of the card based on the cost of purchases, but won’t usually include fees for things like late payment or withdrawal fees.

I had a quick nose around the web and found that the APRs for business credit cards had a similar range to those for personal cards. That said, there was a wide range of APRs on both business and personal cards, so do shop around if you’re looking for either.

Minimum repayment

Credit card providers will require you to make a minimum repayment you need to make each month. You can compare both this and the fee you’ll be charged if you miss a payment.

Fees

Both personal and business cards can charge an annual fee, although this seems to be much less common for personal credit cards than for business cards.

Other benefits to compare

Some personal credit cards offer rewards such as Nectar/Tesco clubcard points or cashback and some business cards offer discounts on AA cover or travel insurance. Both types of card can offer balance transfers.

Minimum income

Most of the business credit cards I checked needed you to have a minimum income expected income of £10,000 over the next 12 months. Many personal credit cards don’t specify a minimum income.

Credit limit

This is the maximum amount that the credit card company is prepared to lend you on your credit card. It’s always good to have some spare credit available on your card to allow for interest to be added. Otherwise you may go over the limit and be charged a fee.

And finally – keep a good credit rating

Your credit rating is the financial information held about you at the credit reference agencies. Most companies that offer credit (for example for mortgages or mobile phone contracts) take your previous credit history into account, so it pays to keep a good credit rating.  You can do this by paying your bills on time and staying within your credit limit.

Here are other articles in this series, why not take a look…?

Do I need business insurance?

Do I need a business phone line?

Do I need a business bank account?

Do I need a business plan?

Note: this information applies to UK readers only.

Image courtesy of David Castillo / FreeDigitalPhotos.net

How to Earn What You Deserve as a Mumpreneur

UPDATE, Feb 2013: I wrote this post as part of the launch for my Earn What You Deserve as a Mumpreneur e-course in May 2011. The course is no longer available, but this post has some fab advice, so enjoy!

Being a mumpreneur is tough. You’ve got all the usual business balls to juggle, but you have to fit them around toddler tantrums, sick children, broken sleep, piles of laundry and everything else a mums does. Mums in business are often motivated by needing family-friendly work rather than an entrepreneurial urge and our learning curve is a steep one.

With the business and your clients, partner, friends and children all demanding attention it’s easy for the money-making to slip down your to-do list.

I’ve asked successful business mums and small business experts for their top advice for earning what you deserve.

Here’s what they said..

Focus on what you do best and outsource the rest. Surround yourself with a network of peers and partners who can take on the tasks you don’t want to do. This could be anything from admin to accounts, sales or technology but handing it to the experts will help you grow whilst keeping overheads low.

Emma Jones, founder of small business support company, Enterprise Nation www.enterprisenation.com

Whatever business you decide to set up, make sure it makes you HAPPY!

Adriana Lokman, Director of Enterprise Start-Up & Development Association (www.esuda.co.uk)

One of the reasons why I see mumpreneurs not making enough money from their home business is that they are not presenting a professional business to customers, and not yet behaving like the boss of a professional business (which they now are) To be taken seriously by  prospective customers and the wider business community I believe that us mums running businesses from home have to set a high standard, invest in ourselves and show everyone that we can make ‘home made profits’! No more dabbling…for serious results take your business seriously.

Mel McGee, founder of www.supermummy.com – online community for business mums and author of ‘Millionaire Mumpreneurs’ For FREE membership visit supermummy.com

My tip is to value yourself and what you offer. Too many mums in business pitch their products and services at the cheaper end of the market. Do your sums properly to work out the costs of running and promoting your business. Listen to the thanks and compliments you get from clients or customers. Truly value what you do, set your prices accordingly, and you’ll find others value what you offer too.

Author and award winning entrepreneur Antonia helps mums get into business at Become a Mumpreneur.

Planning is a key part of any business especially when you are combining it with a family & marriage.  Ensure you plan your work time and play time that way everyone knows what is happening and when but also plan for the future for your business – unless you know where you are going how will you know how to get there?  Set yourself goals/targets for 3/6/12/24 months and keep reviewing them remember to include within this your marketing plan otherwise you will be aggressively waiting for the phone to ring rather than being proactive.

Debbie Mann Founder of Independent Property Inspections and Manager of The Mumpreneurs Networking Club.

Invest in a good email marketing system and offer a newsletter or opt-in report. The better relationship you build with potentially interested customers, the easier it will be to earn their trust … and their custom!

Karen Skidmore, marketing mentor at CanDoCanBe and creator of the Web Tech Club, the marketing club for technophobic business owners

Stop thinking like an employee and start thinking like an entrepreneur.  The average hourly rate for everyone else may be £10 an hour, but you’re not everyone else.  When you’re the boss you decide what to charge and how much you want to earn, it’s a perk of the job!  I like to work backwards from my goals.  I figure out how much I need to realise my goals and then how much I need to earn per month/per week.  I create and sell products that help me achieve that income and in turn my life goals.  In short where you can, stop selling time for money and where you can’t ensure that you’re selling it at a rate that makes it worthwhile.  Time is the scarcest commodity we have, treat is as such.

Erica Douglas, ACE Inspire, winner of Best Start Up 2010 at the Mumsclub Business Awards

When you create a new business, look carefully at what’s already out there. Copying someone else’s idea only works if you know you can do it bigger, better and (ideally) cheaper. It’s far better to try and carve out your own niche and identify a brand new opportunity if you can – and the chances are you’ll feel far more passionate about it.

Sally Whittle, Founder, Tots100

we need to remember that pricing is part of our brand. our price sends a message to the world about the value of our products & services. we must value our own expertise, talent and experience if we expect others to, and we must price our work so that it matches our brand message & the values of our ‘ideal clients’.

karen gunton of build a little biz and author of the workbook build a brand.

“They say that 80% of your productivity comes from just 20% of the work you do, so for every ten items on your do to list, just cross of the eight least important! You’ll be amazed how it focusses your mind…”

Jo Middleton, freelance journalist and writer of the award-winning blog Slummy single mummy.

Work out what makes you special and then tell everyone about it. Don’t be shy – you are capable of much more than you think.

Amy Taylor, Founder of Amy Taylor Accountancy, specialising in accounts and tax services for Mums in Business. www.tayloraccountancy.net

Don’t hide your face behind your business. People buy People so let your customers know who you are

Laura Morris, Founder of www.rentabuggy.co.uk and Business Mentor at www.mumtomumpreneur.co.uk.

We often don’t recognise our skills as valuable.  Because we may find something easy to do – it’s hard for us to believe that someone else will pay us to do it for them. If you want to put a real value on your time, start by working out what it would actually cost to replace you in the home. It’s quite an eye-opener.

Heather Bestel – Award Winning Business Mentor for Mumpreneurs, www.mumsgotabusiness.com

Be open to doing things that don’t seem to have an instant payoff. Twitter is a lot of work, but it’s brought me one big client and several smaller ones. I never know it would be so lucrative for me! So don’t dismiss things just because you don’t know or understand them.

Liz Weston, providing Marketing, Comms and PR solutions through Weston Communications, www.westoncommunications.org.uk

Force yourself to stay focussed on profits at all times – it is easy to get caught up in exciting ideas, but if they won’t show a return on investment that is really worth the time and effort you put in, they are not good business sense.

Polly Marsh, Director of Cuddledry, makers of the award-winning Cuddledry apron towel

Be bold in making changes – don’t hang onto a product, service or idea just because you like it or ‘it’s always been there’ – if it doesn’t make money, you have to ditch it.

Helen Wooldridge, Director of Cuddledry, makers of the award-winning Cuddledry apron towel

Don’t be afraid to use a lifeline and call a friend or email another Mumpreneur and ask for help or advice. I found being brave and connecting with like minded business women has really helped my confidence and direction with my businesses.

Emma Burford of www.mumsbusinessdirectory.com and www.sayitwithchocolate.co.uk

Celebrate all your accomplishments and achievements – no matter how small they may seem, this could be a vital turning point for your business and believe in yourself and your product as if you don’t, no one else will!

Suzanne Borrell, Director of PR, Communications and Marketing, What’s on 4 Ltd and Event Director, BabyExpo Babyshows
What’s on 4 Ltdwww.brightonbabyexpo.co.uk/baby-show

Don’t be afraid of technology. Even if it seems daunting, it CAN help. It’s worth getting up to speed with what’s out there, especially what’s available using ‘the cloud’ (i.e. web based!). Using specific tools and apps (often free) really can help you work smarter. Do invest a little time up front to find what could help you in the long term. It’s also great for business continuity should something unexpected happen!

Jane Geldart – Owner of PlantPure Candles (www.plantpure.co.uk), Group Leader for Mum’s The Boss Avon and Somerset.

Choose a business that suits your personality and passions.  DO you like to work indoors or out?  Do you like to work on your own or with a team.  DO you like to meet lots of people.  Do you like set, regular hours and tasks or a varied, flexible life. Is there anything in the world that you really love doing, and anything that you really really hate?  Write down your answers to all these questions and any more you can think of then compare them to how you would need to work in the business you are thinking of starting – does it work for you?

Debbie O’Connor, Motivating Mum UK

Pitch yourself as an expert in your genre, write a blog giving some tips away for free and charging for your ‘expertise’ … this will help with PR, marketing for your business and not cost you anything. I now have local radio stations call me all the time about mum/business related topics

Joanne Dewberry Dorset Business Mum of the Year – www.joannedewberry.co.uk