Your EIN is an integral part of your business. Without it, your business can end up in hot water with the IRS. This article explains the purpose of an EIN, when to get one, and shares the ways to look up a misplaced EIN or locate the identifier of another business should you so desire.
An employer identification number (EIN) is a unique nine-digit code your business uses for tax purposes. It acts like a personal social security number and is tied to your company for life.
The Internal Revenue Service (IRS) issues EIN numbers to companies for free. If applying online, you’ll receive a number immediately, along with a confirmation letter for your records.
When Should My Business Get an EIN?
Sole proprietorships and single-employee LLCs can skate by without needing an EIN. Each of these business types will need to provide the owner’s social security number in its place. Even if one isn’t required, obtaining an EIN can help separate personal and business dealings.
The moment your company hires its second employee, you can no longer use a social security number and must file for an EIN. This is immediately the case for a business formed as a partnership or corporation.
Most banks want to see an EIN before allowing you to open a business bank account, even if you’re still a one-person show. This holds true for business credit cards as well.
You’ll also need an EIN if you file excise taxes or withhold taxes for any nonwage income you’re paying to a resident alien.
Ways to Apply for an EIN
Only registered businesses are able to apply for an EIN. In most cases, obtaining your tax identifier is one of the first things you’ll want to do after completing the formation process.
There are a few ways in which you can apply for an EIN:
Online
Creating an EIN online through the IRS is the fastest and easiest method. Through the IRS’s Internet EIN form, you can fill out the application in one quick session. The IRS will validate your information during the session, and if everything checks out, you’ll receive your number immediately.
You can send a completed SS-4 Form to the appropriate fax number at the IRS. Once the IRS determines you’re eligible for an EIN, they will fax back confirmation along with your new EIN. Expect the process to take around four business days.
By Mail
Send a completed SS-4 Form to the appropriate IRS address if you want to submit your application by mail. The average time it takes to hear back by mail is four weeks.
By Phone
Those living overseas can apply for an EIN via telephone. You’ll be asked a series of questions from the SS-4 form to prove you have the authority and necessary information to receive one.
This option is not available to business owners living in the United States.
How Can I Find My EIN Number? – EIN Lookup Guide
If you need to locate your own EIN number, there are a few options you can try.
Check Your EIN Confirmation Letter
When you apply for an EIN, the IRS issues a confirmation letter validating your request. This document is the first place you’ll see your EIN and is the best place to track it down.
For those filing online, you’ll receive an instant notification in the form of an EIN confirmation letter. You can save the letter to your computer or access it online in the future.
If applying by fax or mail, you’ll receive your EIN confirmation letter via the same correspondence. Hopefully, you saved this physical document with other important business papers for easy reference.
Lookup EIN on Other Forms
Since your EIN represents your business on tax forms, you’ll find yourself recording it on tax returns and business license requests. Any tax notices you’ve received back from the IRS may also have your EIN.
Your employer ID number likely won’t change for the duration of your business, so any old records you have on hand would be a good place to look.
Talk to Your Bank
Many banks require an EIN when creating a business account or taking out a loan. Call the bank you do business dealings with and have them assist you in tracking your tax identifier down.
Any business requesting a business license at the state or local level has to provide an EIN on the application. Even if you no longer have the paperwork, you can contact the agency to see if they still have it on record.
Reach Out to the IRS
The IRS has a Business & Specialty Tax Line that, among other things, can provide you with your lost or misplaced EIN. Hours of operation are Monday through Friday from 7 am to 7 pm in your local time.
When you get through, an assistor will ask a series of questions to ensure you’re authorized to receive the EIN number. You’ll receive the identifier over the phone and not through any physical or online means.
Wait times for speaking with someone at the IRS can be insanely long, so use this route as your last resort.
How to Find Another Company’s EIN – EIN Lookup
Locating the EIN for another company may not be as straightforward a process. Here are a few methods you can try for looking it up.
Look at the SEC Database
If the business you’re interested in publicly traded stock, you can use the U.S. Securities and Exchange Commission database to locate EIN information. The filings should have the information on hand, but you can also check a recent 10-Q or 10K.
Check the Tax Exempt Database
Tax-exempt companies are all part of a database on the IRS website. All you need is the name of the business you’re inquiring about.
Search the Web
There’s a chance you can find a company’s EIN through some careful internet searching. Local, state, or federal websites may have employer information just waiting for you to find it. If you know the state the company operates in, the Secretary of State site may be a good place to start.
Get a Credit Report
There are few privacy protections for business credit reports. If you can get your hands on one, you may see that company’s EIN mixed in with financial information. Some places may charge a fee to let you leaf through a report.
Hire a Third Party
EIN databases keep tabs on tax identifiers for a wide variety of businesses. It’s not free, but these services may have the information you’re looking for.
Call Them
You can always pick up the phone and reach out to someone in the financial department of the company you want an EIN from. This may work well for businesses you have a relationship with, but these organizations have no obligation to share this information.
How to Look Up an EIN Frequently Asked Questions (FAQs)
This FAQ provides answers to common questions about EIN numbers.
Is a company’s EIN public information?
A company’s employer identification number is public information, but you should limit its exposure as much as possible. Unscrupulous individuals can obtain your EIN and create false documents or attempt fraud.
What can you do with an EIN number?
An EIN number functions as your federal tax identifier. You’ll need an EIN to open a business bank account, apply for business licenses, hire staff, or file taxes.
Is EIN the same as a Social Security number?
An EIN is not the same as a social security number, although a business can use either one for tax purposes under certain circumstances. A social security number is linked to an individual, and an EIN is a number generated by the IRS for a specific business.
Does an LLC need an EIN?
An LLC (Limited Liability Company) with more than one employee must have an EIN for tax purposes. In many cases, banks will require an EIN (as opposed to a social security number) when opening an account or taking out a loan.
Bottom Line on EIN Lookup
You’ll need your EIN to file annual taxes, open a bank account, or request a business license with the authorities. Should you misplace it, there are a few potentially time-consuming methods for getting your EIN back. Keeping proper documentation can save you the hassle of tracking it down and will help protect your company’s privacy down the road.
If you rely on vehicles for your business to thrive, don’t shift into drive before picking up some commercial auto insurance. Personal coverage won’t cut it if you or a staff member has an accident while on the job. Keep reading to discover the best commercial auto insurance companies offering your vehicle or fleet the protection it needs.
When weighing the best commercial auto insurance companies, we looked at providers covering a wide margin of vehicles for current and future business use. We also considered coverage options, how easy the claims process was, and the amount of time it takes to receive approval for coverage. Finally, we wanted to make sure the insurance provider has a support staff that is quick to help and has all the right answers.
Click here for a more detailed understanding of our ranking methodology for picking the top commercial auto insurance companies.
Also ranked as the best small business insurance provider, Embroker has a speedy application process with complete coverage for automobiles and other aspects of your business. Plans typically come back affordable, but Embroker keeps pricing information close to its chest until you request a quote. The company works with brokers instead of supplying coverage itself and doesn’t have a mobile app to use on the road.
Why we chose it: With affordable coverage options for your fleet and drivers, Embroker is the best business auto insurance out there. Read our Embroker review to find out more about it.
Affordable coverage
Fast application process
Complete coverage with customizable plans
Unclear pricing information
No mobile app
Works with brokers
Pricing: Embroker isn’t forthcoming with pricing information, as many factors can affect the cost of a plan. For instance, a vehicle’s type, value, and mileage all play a role. So too does the number of vehicles in your fleet, any cargo they transport, and your employees’ driving records.
Vehicle Types Covered
Commercial auto insurance covers vehicles owned by the business itself or individuals using one for the sake of business. Vehicles typically covered by Embroker include:
Passenger cars
Pickups
SUVs
Vans
Delivery Vans
Cement mixers
Tractor Trailers
Flatbeds
Cranes
Coverage Options
You’ll have to deal with any incident involving one of your business vehicles, so it’s important to have sufficient coverage. Embroker’s policies cover injury or property damage to third parties and any medical bills from your driver. Plans also pay for vehicle repairs or help bridge the gap in money owed in a lease. You can add protection from weather or theft and even tack on roadside assistance if you want more protection.
Claims
When filing a claim, the first step is to reach an Embroker through chat. A team member will help you provide the necessary information to eliminate any bumps in the road. Serious incidents may require a visit from an adjuster.
Approval Time
It doesn’t take too long to receive a quote for business auto insurance. Once you’ve provided the necessary data, Embroker should have some numbers for you within 15 minutes. The most time-consuming aspect is figuring out which types of coverage work best for your business.
Support
While Embroker has offices in four cities, the best way to deal with the company is online. Its website lists several phone numbers, email addresses, and even has a chat feature. Team members are standing by between 9 am and 9 pm eastern standard time.
Next Insurance: Best Commercial Auto Insurance for Fast Coverage
With Next Insurance, you can get quotes faster than anywhere else and feel confident with your end result. The site doesn’t cover niche industries like food trucks but does provide a discount if you bundle auto with other policies. You’ll receive free digital insurance certificates to distribute as needed, but Next Insurance does not work in every state. Furthermore, some claims are handled out of state and bog down the process.
Why we chose it: Next Insurance’s easy application process will have a quote for you in under ten minutes while ensuring you’re getting the coverage you need. Read more about Next Insurance here.
Quick and easy application process
Can save up to 25% by bundling policies
Free digital certificates of insurance
Does not work with food trucks or mobile businesses
Some claims are handled out of house, slowing down the process
Not available in every state
Pricing: The Next Insurance website reveals commercial auto insurance costs can range from $62.50 to roughly $250 per month, depending on your vehicles and driving history. The company focuses on small businesses and may not have coverage to support larger ventures.
Vehicle Types Covered
Next Insurance doesn’t explicitly state what it does cover but mentions several things it does not. Motorcycles, vehicles with more than two axles, and food trucks are all off the table. Similarly, The company does not provide policies for passenger transportation businesses.
Coverage Options
Commercial auto with Next Insurance can help pay for medical expenses, collision repairs, damage to property from one of your vehicles, and legal fees along the way. Policies go on to offer money toward rental vehicles or towing as needed.
Claims
It’s most expeditious to file your claim online in the event of an accident, but you can also reach out to a Next Insurance team member via phone. In either case, you’ll have to provide photos and documentation of the event. Next Insurance usually makes a determination within 48 hours of submission.
Approval Time
Nothing tops Next Insurance regarding approval time for coverage. With carefully crafted questions, you can have a quote in mere minutes to approve and start protection on the vehicles you and your team use for business purposes.
Support
Customer support members are standing by between 9am and 8pm Monday through Friday. where you can reach someone by phone, email, or the online chat feature. The company does not have physical locations you can visit at this time.
Hiscox: Best Commercial Auto Insurance for Comprehensive Coverage
Advertised as America’s leading small business insurer, Hiscox has coverage for just about every business need under the sun. Over 120 years of experience have helped the team develop specific policies for hundreds of industry types. The team tends to handle claims slowly and works best for small businesses. Anyone other than those in Alaska can try Hiscox risk-free for up to 14 days.
Why we chose it: Hiscox understands company risk not just in auto coverage but in many other areas of business as well.
Several other types of business insurance to pair with
Over 120 years in business
14-day money-back guarantee
Slow to respond to claims
Best suited for businesses of ten employees or less
No coverage in Alaska
Pricing: There’s zero pricing information on Hiscox’s website, even for pre-built plans. The only way to get cost information is by applying for a quote through the application process.
Vehicle Types Covered
There’s no overt vehicle restriction on any of Hiscox’s best commercial car insurance policies. Plans state you can cover any owned, rented, hired, or employee-owned vehicles used for work purposes.
Coverage Options
Hiscox has policies for physical damage to owned, hired, rented, or employee vehicles working on your behalf. In the event of an accident, the insurer works to cover costs for your business, employees, and anyone else involved.
Claims
A few days may pass before Hiscox takes note of your claim, and then you’ll have to wait longer to be assigned an agent. All in all, the entire process can take close to a month before you have any resolution.
Approval Time
You’ll find several tailored policies for hundreds of business types on Hiscox’s web page. Should you need to customize one of these plans, it can take significantly longer to get coverage.
Support
Customer service works from 8am to 10pm eastern standard time to handle issues and claims with your service. Hiscox does not provide email or chat support for those looking to communicate through other means.
The Hartford: Best Commercial Auto Insurance for Large Businesses
The Hartford has a FleetAhead program that works to improve fleet operations for large businesses alongside plans to cover large fleet operations. Getting a quote isn’t smooth, but it is possible to receive money toward alternative energy vehicles as you upgrade. You’ll need to speak with an agent to finish up the quote process, but over 1 million customers currently use the system.
Why we chose it: The Hartford’s fleet-focused plans can help businesses with several vehicles stay protected in any situation.
Great range of plans for large numbers of vehicles
Pays an additional 10% (up to $2,500) for replacing vehicles with hybrid, electric, or natural gas models
Over 1 million business customers
Convoluted quote process
Requires talking to an agent to finalize a rate
Focuses more on fleets of vehicles
Pricing: While you won’t find pricing information on The Hartford’s site, the company has special discounts for hybrid, electric, or natural gas vehicles. With a focus on larger fleets, it’s possible to save on multiple vehicles or pay in full up front.
Vehicle Types Covered
Policies with The Hartford represent any and all vehicles your company uses for business purposes. This includes cars or trucks you rent or lease and those used for transportation services. There’s no indication of a maximum vehicle size on the site, and the Hartford offers incentives for hybrid and electric automobiles.
Coverage Options
The Hartford’s best business auto insurance plans shield your company from costs due to bodily injury or damage to vehicles or property. You can extend coverage to include fire, theft, or natural disasters as well. There are options for gap coverage on leased vehicles, and the Hartford can cover rental expenses when an auto is in the shop.
Claims
You can report a claim either by phone or through the Hartford’s online system. In both scenarios, you’ll work with a claims handler to assess the damage and provide compensation due to loss. The process is thorough but can take a few weeks from beginning to end.
Approval Time
When dealing with commercial auto insurance quotes, you’ll need to call an agent to review all fleet details. While an online process may take less time, The Hartford team helps ensure you don’t miss anything you’ll need.
Support
Many offices in communities around the country affiliate themselves with the Hartford and can provide coverage details. These can be hard to distinguish unless you first look on the Hartford website. To avoid the hassle, you can call or chat from 8am to 7pm EST. The claims department is available all the time.
Allstate: Best Commercial Auto Insurance for Customer Service
Allstate prides itself on keeping the front door open in each of its local offices around the country. The company wants to make an impact on each business owner with personalized service. There are limitations on how to submit claims, and qualifications for membership often vary from state to state. However, those in for the long haul can see discounts on higher than average prices over time.
Why we chose it: Allstate’s 9,000 physical locations and a personalized touch help the company stand out in a sea of online competition.
Local agents in many locations around the country
Personalized attention
Discounts based on long-term use
Must file claims over the phone or in person
Prices can be high
Qualifications vary from state to state
Pricing: Like many of the other best commercial auto insurance companies, Allstate isn’t clear on what costs will be until you’ve walked through the quote process. No two businesses are the same, and Allstate will provide a unique quote depending on your fleet, company history, and coverage limits.
Vehicle Types Covered
Allstate understands companies aren’t the same, offering customizable coverage depending on your business needs. In most instances, its insurance plans cover the following vehicles tagged for business use:
Cars
SUVs
Vans
Pickup trucks
Box trucks
Service utility trucks
Coverage Options
After obtaining insurance through Allstate, business owners can rely on cost coverage for bodily harm and repairs from a collision. Those wanting fuller coverage can pick up comprehensive insurance that protects from other types of loss and pays for rentals while other vehicles are in the shop.
Claims
There are multiple ways to submit a claim through Allstate, including via phone call or mobile app. If you’re not far from one of the company’s 9,000 locations, filing in person is possible.
Approval Time
When requesting a quote online or in person, the insurer will navigate you through a series of forms to determine the best protection for your company’s vehicles. After completing the process, you’ll have to wait a number of days for Allstate to provide costs for coverage.
Support
Getting in touch with an Allstate agent shouldn’t be much of a challenge. You can find a local business through the website or simply call the toll-free number for assistance. There’s also an app to stay on top of the latest happenings regarding your policy.
Ranking Methodology for the Best Commercial Auto Insurance
In this section we will spell out what we considered when we chose the best option. We will have one intro paragraph and in this section, we will spell out what we considered when we chose the best option. We will have one intro paragraph and then list out the criteria with what it is and how it was considered, like the following:
Vehicle Types Covered: Your business may be a certain size now, but it likely won’t always stay that way. As you expand your fleet and add in new vehicle types, it’s important to make sure your carrier can accommodate them. You also don’t want to get stuck in a policy with a maximum number of vehicles you outgrow in time.
Coverage Options: Coverage you purchase for your cars, trucks, and big rigs should pay for any repairs and damage to property caused while one of your workers was driving. If your driver or passengers were injured, the best commercial auto insurance companies should handle expenses there as well. Policies can also pay for legal fees and the cost of rentals while your vehicle is out of commission.
Claims: Any claim you file should be part of a straightforward process that doesn’t take all day to complete. Once submitted, the insurance company should provide clear expectations about the documentation they need and the timeframe to receive a determination.
Approval Time: The best business auto insurance keeps the application process brief and the approval time even shorter. They understand you can’t drive a car without insurance coverage and work hard to provide reasonable quotes you can approve right away.
Support: Accidents can happen anytime, and getting matters resolved quickly is paramount. After all, a damaged vehicle could translate into delays and loss of income. The best commercial auto insurance companies have people on hand when you need them most.
Components of Commercial Auto Insurance
Be sure to consider the following components when choosing the ideal commercial auto insurance plan for your business.
Coverage
As you build your policy, you’ll want to weigh the types of incidents your vehicles might be exposed to and which circumstances are important to cover. This includes specific types of damage to the vehicle, medical expenses due to bodily injury, and even the destruction of property.
There’s no reason to limit commercial auto insurance to times on the road. More comprehensive coverage can protect you in case of theft, weather, or vandalism while your car is parked. If your business can’t afford to lose a vehicle to repairs, you can opt for rental expenses as well.
Policy Limit
No matter how great your policy is, your insurance company will assign a ceiling to the amount they’re willing to pay. This number may appear as a lump sum or come split between medical expenses, vehicle damage, and the like.
A more extensive fleet likely needs a higher policy limit, but raising the roof generally comes with higher monthly rates.
Deductible
The deductible represents the out-of-pocket amount you’ll need to pay upfront before your insurance provider steps in. Lowering the deductible amount for your vehicles typically increases the monthly amount you’ll need to pay.
Monthly Premium
You’ll need to pay a monthly premium in order to retain your coverage. Costs can vary greatly depending on how you set up your policy.
Does My Business Need Commercial Auto Insurance?
Nearly every state requires personal car insurance to get you from point A to B. These states also have specific guidelines surrounding what constitutes personal use and what’s considered a business purpose. If you ever use a vehicle for business reasons, you’ll need to have commercial auto insurance as well.
Personal auto policies won’t cover accidents while you or a staff member are on the road. What’s more, not having appropriate coverage could land you in legal hot water. Most states require bare-bones coverage, but it’s a good idea to pay a little more to get the protection you need.
Any company meeting at least one of the following points must have a business auto insurance policy:
Your company owns, rents, or leases at least one vehicle
You or someone in your business transports tools, equipment, goods, or people from one place to another
Employees drive a vehicle designated for business
You use an automobile only for work purposes
Your vehicle is part of a business service
What Does Commercial Auto Insurance Cover?
Commercial auto insurance providers may offer pre-built packages for certain industries, but you’ll want to improve upon these policies to fit your business needs. Consider the following coverage types when customizing your plan:
Collisions: When your business vehicle makes contact with another car or object, collision coverage comes to the rescue. It can pay for some or all damages to the vehicle you or a staff member were driving.
Comprehensive: Comprehensive coverage goes beyond accidents, including reimbursements from fire, water, vandalism, theft, or similar events depending on your coverage.
Medical Expenses: Commercial auto insurance can pay for some or all of your medical expenses if you get hurt in an automobile accident. Policies can also offer assistance to passengers riding in the car with you.
Personal Injury Protection (PIP): Twelve states require personal injury protection, also known as no-fault insurance. It is a special form of coverage that pays for healthcare expenses stemming from an accident. Compensation extends to others in the vehicle, even if they don’t have insurance of their own.
With PIP insurance, medical expenses are taken care of no matter who is at fault.
Property Damage: Property damage coverage pays toward any destruction caused to another person’s belongings in an accident you were at fault for.
Bodily Injury: Bodily injury coverage pays for wounds another person receives resulting from an accident you’re responsible for.
Rental Reimbursement: When your normal business vehicle is undergoing repairs from a covered incident, rental reimbursement can pay toward a rental car, so business doesn’t stall.
Uninsured Motorists: If an uninsured motorist strikes your vehicle, having this coverage pays for any injuries you receive.
Best Commercial Auto Insurance Frequently Asked Questions (FAQs)
Want to learn more about commercial auto insurance? This section features answers to common questions on the topic.
Can I insure my car through my business?
It isn’t possible to insure a personal vehicle with your commercial auto insurance. If you use this car at times for business purposes, you can use your business insurance to cover those instances.
Is commercial auto insurance more expensive?
Generally speaking, you’ll find commercial auto insurance to be more expensive than a personal policy. Prices often reflect the number of vehicles you have available and the amount of risk your team experiences while driving. On the plus side, commercial auto insurance tends to have higher limits and, therefore, more coverage.
What state has the cheapest commercial truck insurance in 2023?
Mississippi currently holds the title for the cheapest commercial truck insurance in the United States. Interestingly, the state’s rates are up to four times lower than other locations. Following Mississippi, Wyoming, Massachusetts, Iowa, and Arizona round out the top five.
What are the benefits of commercial car insurance?
Commercial auto insurance offers assistance when dealing with the aftermath of an accident. A policy typically covers injury to drivers and passengers as well as repairs to the damaged vehicle. Many leasing companies require a commercial auto policy before you can use their automobiles.
Best Commercial Auto Insurance – Bottom Line
Commercial auto insurance is an imperative part of any company using vehicles for business purposes. The best providers cover a wide range of cars, trucks, and heavy machinery with one policy while considering the needs of your specific business model. Should an incident occur, you want to be certain both your team and vehicles are in good hands and your company doesn’t have to miss a beat.
Customers are turning to credit cards more than ever when making purchases, but not just any store can accept plastic. Point of sale software is an integral part of any small business strategy wanting to capitalize on this large market. Read on to discover the best POS software currently available and what makes each one a winner.
As we pored over all the point of sale systems available for small businesses to use, we looked to price and payment processing fees as major factors. We also wanted to make sure the hardware didn’t create any barriers, and the contract length wasn’t too long. Finally, we studied additional features that make the software stand out and how easy it was to find support when you need it most.
Click here for a more detailed analysis of our methodology.
Square POS is easily accessible for small businesses with a completely free-to-use Basic plan. It even comes with a complementary card reader for those working in a physical location. Flexible tools make Square beneficial for just about every business type.
You will have to use Square’s payment processing system, though, and rates can be on the expensive side. Even with the paid plan, marketing tools and loyalty programs still cost extra.
Why we chose it: Square is the best point of sale software for small businesses thanks to its low barriers for entry and wide range of tools.
Pricing: It doesn’t cost a dime to get started with Square POS software. The free plan contains a thorough feature set with enough for any business type to get started. When ready to open up reporting and management tools, jump to the Plus plan at $60 per month for each location you do business.
Payment Processing Fees
Square’s payment processing fees are on the high side, a clear tradeoff from offering most of its services for free. Expect to pay 2.6% + 10¢ for any in-person credit card transaction and 2.9% + 30¢ for online customers. These fees can significantly add up as your business grows.
Hardware
You’ll receive a free small card reader when you join Square’s ranks that you can use right away for in-person sales. If you want to look more professional, the POS software provider has portable terminals, iPad stands, and full-blown desktop registers you can purchase.
Readers: $10 for basic, $49 for contactless
Stand: $149 (iPad not included)
Terminal: $299
Register: $799
Contract Length
There are only month-to-month contracts with Square, so you can drop your service any time. Keep in mind hardware devices are proprietary and won’t do you any good with another POS software company.
Features
Businesses can benefit from a slew of inventory management tools to track your products and a free online store to build an internet presence. The POS software also creates customer profiles and can generate sales reports depending on your current plan. Payroll, marketing, and loyalty programs are all add-ons worth weighing the costs of.
Support
When in need of help, Square has a large database of resources, getting started guides, video tutorials, and more. If you can’t find your answer there, it’s possible to track down a live agent via live chat or with a phone call.
TouchBistro dedicates its services to the food and beverage industry with several amazing restaurant POS tools. Its software works with iPad devices and has a customer support team always standing by to help. Signing up requires a year contract, and TouchBistro doesn’t do a good job explaining its processing fees. While you can get basic features for a reasonable fee, add-ons can cause your monthly rate to skyrocket.
Why we chose it: TouchBistro’s long list of delicious features and flexible pricing makes it the best POS software for the restaurant industry.
Pricing: You’ll pay a flat $69 per month to unlock the majority of TouchBistro’s services for use. From there, features such as online ordering, marketing tools, and reservations can significantly increase the cost. Small businesses may have to pick and choose which add-ons make the most sense until sales blossom.
Payment Processing Fees
TouchBistro doesn’t even hint at what payment processing fees might be. The platform uses a number of payment partners that decide rates based on your credit history, sales volume, and a bunch of other factors. While this can work to your advantage, it can be a detriment to startups without much history.
Hardware
You can integrate all of TouchBistro’s software onto any current iPad device, eliminating the need for expensive, proprietary hardware. If you want your restaurant space to look more the part, TouchBistro does have credit card readers, cash registers, receipt printers, and more that you can use. Of course, there’s no way to know how much these devices cost without requesting a quote for your specific business.
Contract Length
If you commit to TouchBistro for your restaurant, you’ll be in a contract with them for at least a year. When you receive your quote, there may be some wiggle room in pricing if you opt for an even longer timeframe. There’s no option to bail on your contract early if you do decide to change POS software providers.
Features
TouchBistro’s many features allow you to build an optimal floor plan and set up how you want staff to manage tables. You can also track inventory, swap dishes in and out, and streamline job assignments and payroll. Some features like online ordering, marketing, and loyalty programs cost extra.
Support
Support is another of TouchBistro’s stronger suits, offering 24/7 service any day of the year. You can call or chat with an agent depending on your preference to get your questions answered quickly.
Shopify POS speaks omnichannel business, curating its feature set to work on any device or platform currently in existence. These tools extend to physical locations as well, even though the site shines most for its online store builder and international commerce tools.
Payment processing fees run high, though, and anyone looking to use third-party payment services gets hit with significant fees as well. Depending on the plan you select, you’ll have to limit staff exposure to just a few team members.
Why we chose it: Shopify POS reaches far and wide to facilitate business dealings to anyone in the world on whatever platform they choose.
Additional fees for using third-party payment providers
Pricing: You’ll have three plans to choose from when using Shopify POS with ever-increasing features as you move up the ladder.
Basic: $29/month
Shopify: $79/month
Advanced: $299/month
A major shift from plan to plan is the number of staff accounts you can have logged in to manage operations from different locations. Payment processing fees decrease as you work up the ladder and are worth considering when looking at your total sales.
Each plan comes with Shopify POS Lite, an introductory feature set for sales. Users can upgrade to Shopify POS Pro for $89/month per location to maximize point of sale tools and eliminate some of the bottlenecks the base software offers.
Payment Processing Fees
Your payment processing fees with Shopify POS vary depending on the plan you subscribe to. At the entry-level, Shopify will grab 2.9% of your credit card sales but will drop to 2.4% if you join the Advanced level. International sales are possible but suffer from even higher rates.
It is possible to use other payment processors when your Shopify account. In addition to whatever they charge you, Shopify POS will take somewhere between 0.5% and 2% off the top for their portion.
Hardware
For physical locations, Shopify POS has plenty of portable hardware tools. Most devices are standalone, but you can download software onto an iPhone and eliminate the need for additional machines. The all-in-one POS Go retails for $429, but simple card readers are as low as $39 apiece.
Contract Length
All your dealings with Shopify POS are on a month-to-month basis. There are no contractual obligations to worry about, and you’re free to move on at any time. If you invest in any of Shopify POS’s hardware, they won’t do you any good with a new platform.
Features
Online sellers can rejoice at Shopify’s massive eCommerce platform and all the tools you’ll need to create the perfect website. The POS provider also has impressive shipping discounts, offering up to 88% off standard rates. Many tools help your business reach international buyers with options for language and currency conversion and the ability to manage different markets.
Support
You can connect with a Shopify POS customer support agent any time of day or night via email, phone, or online chat. Agents do get bogged down from time to time during peak hours. If you end up on hold, you can browse Shopify’s extensive database for answers from other users.
Clover POS loves equipping store owners with professional hardware devices to really look the part. Plans include registers, kiosks, or portable machines to maximize in-person sales. The platform has several pre-built plans for specific industries but will work with any type of business to create the system you need. If that’s not enough, your first 30 days of use are completely free.
Pricing can get quite confusing, and any transaction without a credit card present has a much higher processing rate. It’s best to do business directly through Clover’s website, as some would-be partners run sketchy business deals.
Why we chose it: Each of Clover POS’s carefully crafted packages includes the software and hardware you’ll need to succeed.
Some Clover partners may not do legitimate business
Keyed-in transactions have significantly higher processing rates
Pricing: Clover POS varies its pricing and plans to the specific type of business you operate. Costs also vary depending on whether you pay monthly for hardware or buy your devices outright and shoulder a much lower monthly fee.
On the retail side, plans for hardware and software change considerably based on the features you need and how you choose to pay.
Retail monthly rates:
Starter: $60/month
Standard: $130/month
Advanced: $175
These same plans look quite different should you opt to pay for the hardware upfront:
Starter: $799 upfront + $14.95/month
Standard: $1,799 upfront + $44.95/month
Advanced: $2,298 upfront + $54.90/month
Clover POS has a similar pricing model for restaurants, professional services, and home & field as well. If your business doesn’t match one of Clover’s pre-built options, the POS software provider will work with you.
Payment Processing Fees
There’s some variation in payment processing fees among different price tiers. Expect to lose 2.6% + 10¢ at the Standard level and 2.3% + 10¢ if you upgrade to advanced, although these numbers can vary slightly depending on the type of business you run. Any keyed-in credit card transactions cost upwards of 3.5% + 10¢ per use.
Hardware
From portable card readers to registers, Clover POS has an impressive line of hardware. Plans come preloaded with the hardware Clover recommends for your business type, but you can swap these out for something else if you wish. You will need Clover hardware to run POS software from your store, though.
Contract Length
Whether you choose to pay for software and hardware monthly or buy the hardware outright, you will enter a one-year contract with Clover. Should you decide to switch POS providers during that time, expect high termination fees and hardware you can’t use elsewhere.
Features
Clover POS’s tools handle inventory management well, no matter what business you run. There are options for online ordering and tracking tools for viewing sales. If you pay a little more, you can access customer management tools to build long-term relationships.
Support
Customer support is on hand 24/7 to help with questions or issues you may have about your POS software. Clover doesn’t have a large database with help topics you may find with other providers.
With Revel Systems, you can adapt to changing customer needs and personalize client interaction through Open API. It’s possible to further customize payment methods and integrations with other software. To do away with expensive hardware, Revel Systems downloads seamlessly into iPads for point of sale. You will need to sign up for a three-year contract to get the best rate, and even that might be high for some small businesses. There’s no information anywhere on payment processing fees.
Why we chose it: Revel Systems unleashes the power of Open API, integrations, and flexible payment systems to put customization firmly in your hands.
Best rate requires two terminals and a three-year contract
No transparency with payment processing rates
Monthly pricing is expensive
Pricing: To get started with Revel Systems, be prepared to lay down $99 per terminal each month from the get-go. Since you have to purchase two terminals to lock in this rate, you’re looking at nearly $200 per month just to commence POS operations.
If you want to buy some onboarding help, you’re looking at an additional $674 to have trained staff come in and show you the ropes.
Payment Processing Fees
Revel Systems declares transparent, flat processing fees for credit cards and then fails to mention pricing anywhere on its site. The POS software company even has its own payment processor. You should get a better understanding of these rates upon requesting a quote, but you can use third-party options if you don’t like what you hear.
Hardware
All the software you’ll ever need runs right off iPad devices. Revel Systems sells cool iPad stands along with credit card readers, printers, barcode scanners, and even a cash drawer based on your store’s needs.
Contract Length
You are in it for the long haul if you sign up for Revel Systems. Contracts are three years in length for best pricing.
Features
The ability to customize your POS software with Open API is a huge plus for Revel Systems. Loads of management tools help you control all aspects of your business and make adjustments on the fly to accommodate an ever-changing market.
Support
Revel Systems offers a somewhat pricey onboarding service to show you how to get your POS system up and running. If you encounter any issues after using the platform for some time, you can contact customer support by phone or chat at any time.
Lightspeed POS makes it easy to assign SKUs and track inventory levels across multiple locations. Payment processing fees are flat across all plans and sit below the majority of the competition.
This helps offset the cost of higher monthly rates for plans, and those using the lowest tier won’t have access to Lightspeed’s eCommerce platform. You’ll need to contact support for hardware costs, but Lightspeed will walk you through onboarding until your team is ready to fly solo.
Why we chose it: Lightspeed POS has an abundance of inventory management tools to keep your business stocked.
Pricing: If your business revolves around restaurants or retail, Lightspeed POS has a plan for you. The software provider has unique pricing models for each industry that grows in features as you move up the list.
The above prices are for an annual contract. You’ll pay quite a bit more if you choose a month-to-month approach.
Payment Processing Fees
It’s a blessing to see Lightspeed POS’s flat payment processing rates, where so many other companies muddy the water. You’ll hand Lightspeed POS 2.6% + 10¢ for in-person sales, whereas online customers will cost you 2.6% + 30¢ for each purchase. If you wish to use a third party for payment processing fees, your monthly rates will jump through the roof.
Hardware
Things get a little hazy when looking at Lightspeed POS’s hardware. You can use an iPad for all your in-person sales but add in a cash box and receipt printer if you so desire. Any businesses wanting a more official desktop setup can go that route as well. You will need to call Lightspeed for pricing.
Contract Length
It is possible to follow a month-to-month contract with Lightspeed, but doing so will raise your fees by around 20%. Your best bet is to purchase an annual contract to get the best rates.
Features
Any business dealing with any amount of stock will want to check out Lightspeed’s inventory system. You can track product levels across multiple locations, tag items with unique serial numbers, and reorder directly from the POS platform. Additional features include an eCommerce platform and several key reporting tools.
Support
Lightspeed POS has a lively customer base that contributes to the forum on a regular basis. If you can’t find your answer there, a customer service representative can help you 24/7 by phone or online chat.
Quickbooks has three plans to choose from, each with a high initial cost that unlocks the software until the end of time. This can get costly for businesses with multiple locations, as each site needs a unique license. The software runs on Windows devices and fuses seamlessly with Quickbooks financial tools to round out your business needs. Help may be hard to come by at times since customer support doesn’t work nights or weekends.
Why we chose it: With Quickbooks, you don’t have to worry about never-ending monthly software costs eating into your bottom line. For one flat fee, you’ll own the platform’s POS software forever.
All plans are a one-time purchase
Integrates with QuickBooks financial software
Can use the software on Windows devices
Separate licenses required for each location
No 24/7 support available
Expensive initial costs
Pricing: Quickbooks breaks the mold with its one-time purchase plans. If you can overcome an initial cost, the software is yours to use forever. It should come as no surprise that each subsequent plan grows the feature set as that one-time price rises.
POS Basic: $1200
POS Pro: $1,700
POS Multi-Store: $1,900
These costs do not include the hardware you might need or payment processing fees from customer credit card use.
Payment Processing Fees
Quickbooks has two payment plan options to consider. The pay-as-you-go option will set you back 2.7% for each swipe of the card. You can get this rate down to 2.3% by paying $20 per month, but you’ll also pay a 25¢ transaction fee with each purchase. Do the math and see which plan makes the most sense for your business.
Hardware
You can buy credit card readers, barcode scanners, or even a full hardware bundle with all the fixings. The full bundle costs $900 but doesn’t include your software interface. Fortunately, all Quickbooks tools run right off a standard Windows computer or laptop.
Contract Length
There are no contracts with Quickbooks, as you’ll lay down one amount of money upon joining Quickbooks’ ranks and use its software indefinitely. There is a monthly rate for payment processing fees if you don’t pay as you go, but you can opt out of that at any time.
Features
Quickbooks POS marries very well with the company’s financial platform, handling sales, invoicing, and payroll. Although Quickbooks’ financial side is a separate package with an additional cost, the two work amazingly well together. The POS software does a great job tracking inventory and integrates with a lot of the top sales platforms.
Support:
You can only get in touch with a customer support agent from 5 am to 6 pm during the work week. If you encounter an issue in the evening or during operations on the weekend, you may be out of luck until you can connect with someone on Monday morning.
Ranking Methodology for the Best POS Software for Small Businesses
A lot of factors go into making POS software something to write home about. We considered the following when picking out our favorites:
Price: Let’s face it, price is always a huge consideration for any small business. The best POS software must have an entry-level price point for a company to settle into. Adding new features along the way should similarly not break the bank.
Payment Processing Fees: Payment processing fees scrape a little bit of your profits off the top for the POS software provider you’re using. These percentages and additional transaction fees can make a significant difference in your income. The best point-of-sale software services keep these fees low.
Hardware: If you have an in-person location, you need the physical hardware in conjunction with POS software to take payments by credit card. Many companies run their software off inexpensive iPad devices to keep costs down but offer more professional-looking registers for those that can afford it.
Contract Length: Even if a POS software provider is the ideal fit for your business right now, you don’t want to get stuck in a contract if your needs change or something better comes along down the road. Many point of sale companies work off month-to-month contracts, allowing you to change things up just about any time.
Features: Not every point-of-sale service is the same. Those on top the leaderboard have additional features that set them apart from the competition. Finding tools that match up with your business model can give you a nice advantage.
Support: Software can be confusing, crash for no apparent reason, or simply not work as you think it should. In these instances, it’s a blessing to have customer service agents standing by to help. The best POS software systems have 24/7 support teams alongside a wealth of knowledge in a database or on forums.
Best POS Software for Small Businesses – Frequently Asked Questions (FAQs)
This FAQ answers some of the biggest questions surrounding POS software.
Is Square POS really free?
At the entry level, Square POS is free to use. The platform will take a portion of your sale as it’s cut for providing you with a service.
Can a laptop be used as a POS system?
POS systems using desktop software can run on a laptop device. Most POS platforms will not work on a laptop and require a tablet or proprietary hardware to function.
How much does a POS system cost?
Each POS system comes with unique features and fees. Some have free introductory level plans, and the most feature-rich platforms can charge hundreds per month.
What POS system do most retailers use?
Retail businesses often turn to Shopify, Square, and Lightspeed for their POS needs. These three software platforms meet the needs of inventory management and don’t cost an arm and a leg to use.
Bottom Line – Best POS Software for Small Businesses
POS systems are essential for credit card sales, whether your business is brick-and-mortar or entirely online. The best POS software introduces an abundance of features at a low cost that even the smallest business can work with. Square tops our list for its free starter plan and range of industry coverage, but we feel any of the companies on this list will serve you well.
No small business can prevent all types of incidents in the workplace, no matter how hard it tries. Small business insurance can protect a company in the event of unforeseen circumstances, so long as you have the right coverage. Read on to learn about the best small business insurance companies currently available and what makes them stand out.
When creating our list of the best small business insurance companies, we studied application approval time and which industries it best supports. We felt it was also important to offer a wide range of coverage and have an easily accessible customer support team. Our top picks also needed to have a straightforward claims process and worker’s compensation coverage in the event of a mishap.
Learn more about our methodology for choosing the best small business insurance companies here.
Embroker: Best Small Business Insurance Provider Overall
Embroker gives business owners a laundry list of coverage options to ensure all insurance needs are taken care of. At times, the depth of plans can be overwhelming, and you’re never sure what you’ll pay until you’ve put together a package. Still, a fast application process and employee and health benefits only add to its list of perks. Embroker just needs a mobile app to round out its diverse feature set.
Why we chose it: A multitude of coverage options and speedy service make Embroker the best small business insurance currently available. Read our complete Embroker review for an in-depth evaluation of its offerings.
Pricing: Embroker doesn’t offer much in the way of costs, as the company is a marketplace for insurance carriers. It will tally prices for different plans, and you can choose what’s best for you. Embroker will receive a commission for connecting you with available opportunities.
Approval Time
You can have an insurance plan in 15 minutes after completing the application process. The tricky part is weeding through all Embroker’s available coverage options and deciding what’s best for your business. The company will help you along the way, but you’ll want to plan a little extra time.
Industries Supported
While you can build a plan for any business, Embroker has pre-built coverage plans for tech companies, law firms, and even has an understanding of organizations dealing with cannabis. Being dedicated to small businesses, Embroker’s coverage focuses on your company’s constantly changing needs. If a pre-built package doesn’t speak to you, Embroker will help you create coverage that will.
Support
Embroker has four office locations in strategic locations, but for the most part, it is an online provider. Luckily, it’s possible to reach an agent during the work week from 9 am-9 pm eastern time. Your broker may have additional contact information.
Claims Process
To file a claim, you’ll first need to reach out to your personal broker or contact Embroker through chat. These individuals will help you through the claims process and let you know which photos or documentation to provide. Serious claims may necessitate an adjuster to review information further. Your account dashboard will keep you up to speed with your claim.
Types of Coverage
You won’t be short of opportunities to protect your business from things both in and outside your control. Whether you choose a package or not, you can cover your company from physical and virtual crime, damage, errors and omissions, and so much more. Embroker even provides health benefits for employees.
Worker’s Compensation
Worker’s compensation protects your business from costs due to injury on the job. Embroker has high policy limits to cover lost wages, medical expenses, and even death.
Next Insurance works solely with small businesses with the hope of providing speedy, straightforward coverage. Better yet, it’s possible to save on policies by bundling two or more into one package. Once approved, you’ll receive free digital certificates to show off your coverage. The company does lack some more specialized types for specific business models, and at times the claim process can run slow. Next Insurance isn’t in every state, so verify coverage before applying.
Why we chose it: Next Insurance has tailored business insurance in a hassle-free package that can offer big savings on the competition. Read our Next Insurance review to read more about it.
Quick and easy application process
Can save 10% by bundling policies
Free digital certificates of insurance
Lacks some specialized insurance types
Some claims are handled out of house, slowing down the process
Pricing: You can obtain an instant quote through Next Insurance, where the company will ask a few questions about what you do. These steps will point you to the ideal policy and its associated costs. Unfortunately, Next Insurance doesn’t provide approximate costs for different plans at a glance. You can save 10% by bundling two or more policies together.
Approval Time
From the time you start your application process, you’ll have a quote in about five minutes with everything you need to know to make a decision. It’s wise to browse policies before committing to be sure you’re not missing something important.
Industries Supported
You’ll find tailored policies for thousands of professions, each designed to meet the needs of that particular area. These policies also consider the state you’re working in and additional requirements that may bring. Just some examples include DJs, daycares, landscaping businesses, and restaurants.
Support
There aren’t any physical Next Insurance locations you can walk into. Its customer support team can take your call any time between 9 am and 8 pm Monday through Friday. You can also access the crew through online chat or by email.
Claims Process
Business owners can file a claim online or by calling Next Insurance’s hotline. After explaining the details of the incident, the agent will collect the required photos and documentation to submit your claim. Most claims have decisions within 48 hours.
Types of Coverage
Next Insurance does general liability well and provides insurance for property, vehicles, and products. Those needing more specific coverage for cyber threats or directors and officers will not find what they need here.
Worker’s Compensation
Worker’s compensation through Next Insurance costs as little as $14 per month. It pays for medical expenses, lost wages, or retraining of staff after time off due to injury. You can also protect your business from employee lawsuits or take care of employees who can no longer work after an incident.
Hiscox has some of the best general liability insurance for small business, but it doesn’t stop there. You can choose from several standard policies or delve into specialized coverage such as medical malpractice or cybersecurity as you see fit. If things don’t go as planned, Hiscox offers a 14-day full refund policy. Plans tend to revolve around small businesses of ten employees or less but can’t cover anyone in the state of Alaska. While the claims process works well, it can take a long time to resolve.
Why we chose it: With over 120 years of experience, Hiscox has carefully curated insurance packages for over 180 unique professions. With Hiscox, chances are high that you’ll find all everything you need for your small business.
Specialized coverage for several industries
Over 120 years in business
14-day money-back guarantee
Slow to respond to claims
Best suited for business of ten employees or less
No coverage in Alaska
Pricing: Even Hiscox’s pre-built insurance policies don’t reveal out-of-pocket costs to business owners. The provider does allow monthly payment options to help growing businesses avoid large expenses.
Approval Time
You can go with one of Hiscox’s tailored policies or customize one to suit your company’s needs. Once you know what you’re looking for, Hiscox will get you a quote quickly and turn on coverage the moment you approve the terms.
Industries Supported
Having over 180 business types represented is no small feat. The click of a button can reveal the coverage you need, but Hiscox will still work with you to identify any additional areas you should protect. Just a few notable professions include personal trainers, hairdressers, and real estate agents.
Support
Hiscox has nine offices scattered across the country, but most customers will have better luck by telephone. Customer service is available from 8 am to 10pm eastern time via a toll-free number. There’s no online chat feature or an email address for support purposes.
Claims Process
It can take up to a day before Hiscox acknowledges your submitted claim and a few more for the insurance provider to assign you an agent. From there, you can wait up to another week to verify your coverage and two more to have a decision.
Types of Coverage
You’ll be hard-pressed to find something not protected under Hiscox’s wide range of coverage. The company will also work with you as your business grows to include a board of directors, additional property, or specific risks in your field.
Worker’s Compensation
Costs for worker’s compensation vary depending on the number of employees you have and health risks within your organization. Should someone in your company receive an injury, Hiscox will help cover expenses due to injury, missed wages, and rehabilitation.
The Hartford: Best Small Business Insurance for Worker’s Compensation
Over one million customers stand behind the Hartford, making it some of the best small business liability insurance available. Among the Hartford’s claims to fame are its worker’s compensation packages, with policies matching your company’s needs and state requirements. Policies cover several business sectors but have no sway in Alaska, New Jersey, or Hawaii. Chances are you won’t be able to complete the application process online, and it’s wise to watch for price increases after becoming a member.
Why we chose it: Among a wide range of coverage options, the Hartford offers the best worker’s comp insurance for small businesses.
Stellar worker’s compensation packages
Over 1 million small business customers
Covers a wide range of business sectors
Most policies require talking to an agent to finalize a rate
Some users complain of significant price increases over time
Does not offer policies in Alaska, New Jersey, or Hawaii
Pricing: The Hartford lists average annual premiums for business owner policies at $3,135 and general liability at $1,057. Worker’s comp typically runs about $840 per year, but any of these numbers can change depending on business factors and your location.
Approval Time
It’s possible to fill out a somewhat lengthy online form or call The Hartford directly to receive a quote. Most instances require speaking with an agent to complete the application, stretching out the approval time.
Industries Supported
The Hartford works with small and large businesses alike, offering insurance needs for the masses. Industries it’s known to support include education, museums, pet services, and more. Choosing a business type reveals common policies for that sector.
Support
You’ll find a smattering of agents throughout the states affiliated with The Hartford in some way. The quote support team works 8 am to 7 pm EST during the week, and The Hartford’s claims department is available 24/7. There’s also a chat feature on the website during business hours.
Claims Process
After reporting a claim by phone or online, The Hartford hooks you up with an experienced claim handler to help the rest of the way. With a large customer base, it may take a few weeks to hear a final decision.
Types of Coverage
It’s possible to cover everything from boxes to boats with The Hartford’s spectrum of coverage. The company also offers personal home and auto policies for those looking beyond business dealings.
Worker’s Compensation
Many years in the insurance business and dealings in most states have honed the Hartford’s knowledge of worker’s compensation requirements. In addition to standard protection against medical costs, the Hartford offers preferred medical providers, prescription drug features, and other top-tier benefits.
Allstate: Best Small Business Insurance for Physical Office Locations
Allstate currently has over 9,000 locations in the United States in addition to an online service. These physical buildings do tend to drive policy costs up, and there’s no way to submit a claim online. You’ll find an impressive range of coverage options, including damage from forces of nature beyond anyone’s control. When applying, qualifications can be confusing since they vary from state to state.
Why we chose it: Allstate’s offices throughout the country make it ideal for personal connection and human beings that understand how your business works.
Local agents in many locations around the country
Huge range of coverage options
Offers natural disaster coverage
Must file claims over the phone or in person
Prices can be high
Qualifications vary from state to state
Pricing: It should come as no surprise that Allstate’s policies lean on the expensive side. The company has thousands of physical locations and does more with overhead and marketing than most competitors.
Approval Time
The insurance provider walks you through a series of questions about your business during the quote process. The form takes a notable amount of time to complete before even seeing what the costs will be. Finally, review and underwriting must take place before making a purchase.
Industries Supported
You won’t find ready-to-go policies for certain industries with Allstate. Instead, the quote process uncovers the nature of your business and shapes your policy through questions.
Support
Most physical offices are open during regular business hours, so you can pop your head in with a question or a claim. For urgent matters, you can call the toll-free number at any time to reach an agent over the phone. The company also has a mobile app and a presence on Twitter.
Claims Process
It is possible to file or track a claim online, but Allstate’s preferred method is through the phone system. You will have to wade through automated prompts before even starting the process. Many local offices will also handle claims for you. After an initial consultation, Allstate agents will evaluate damages and write up an estimate for repairs.
Types of Coverage
Allstate’s business policies can cover property, liability, equipment issues, and work interruptions. You may have issues locating protection for more specific means. Its focus on insurance extends to areas outside of business, such as identity protection and life.
Worker’s Compensation
There’s no clear answer on Allstate’s website regarding the protections it offers for worker’s compensation. Since policies tend to fluctuate from business to business, you’ll have to request a quote to learn more.
Ranking Methodology for the Best Small Business Insurance
In this section, we will spell out what we considered when we chose the best option. We will have one intro paragraph and then list out the criteria with what it is and how it was considered, like the following:
Approval Time: Insurance is not something you want to do business without for any period of time. The best options don’t overcomplicate the approval process while sending quotes your way in a matter of minutes, not days. Any back and forth on terms should be similarly speedy so you can get your certificate of insurance as fast as possible.
Industries Supported: Many of the best small business liability insurance companies have pre-built plans for a wide variety of industries. Some even customize plans based on the state you do business in. If you’re not a fan of a particular package, it’s usually possible to make changes to fit your business model.
Support: An insurance company can have amazing coverage that does little good if you can’t connect with an agent when you need one. The top providers usually have chat, email, and phone support during hours that work well for everyone.
Claims Process: The claims process can be one of the most arduous parts of dealing with an insurance company. The best small business insurance companies facilitate the submission process and connect you with a handler in record time. Once you’ve provided all the information needed, these providers also offer quick turnaround time.
Types of Coverage: If your business needs to protect it, chances are these top insurance companies will cover it. While nearly all cover property or vehicle damage, the top options have innovative coverage for cyber attacks or have the means to grow with your business as you expand to new horizons.
Worker’s Compensation: Companies with the best worker’s comp insurance for small business work to understand the specific needs of your business. They provide comprehensive plans to battle medical bills, paid leave, and rehabilitation for injured team members.
What Insurance Does a Small Business Need? – What Types of Coverage Are Available?
Insurance companies make many types of coverage available to businesses. Depending on your business model, you may need some or all of the following to ensure you’re safe in the event of a mishap.
General Liability Insurance
General liability insurance contains essential coverage you’ll find at the core of any policy. It deals with individuals outside your company threatening legal action due to injury, property damage, or negative impact on one’s reputation.
When needed, general liability insurance can deal with medical bills, property clean-up, legal defense, settlements, libel, slander, and the like.
Errors & Omissions (E&O) Insurance
Also known as professional liability insurance, errors and omissions serves to protect your business should customers sue for errors or negligent behavior in products or services you provide. It often has a broader reach than general liability insurance and works well to complement that policy.
Customers can submit legal action against you for either actual or perceived damages, and E&O insurance intercepts either of them. It covers costs you’ll need for a legal defense and any settlement costs you incur due to your mistake.
Commercial Property Insurance
Commercial property insurance unsurprisingly handles damages or loss to physical property such as a building or inventory. These damages can come from a number of sources, including fire, vandalism, theft, or even civil disobedience.
Anyone operating out of a physical location or dealing with inventory should have some form of this coverage. Unless you own a building outright, your lender will likely require you to carry commercial property insurance. Costs vary depending on the amount of coverage you request at the time of quote.
As long as you incur damage from a source listed in your plan, commercial property insurance will repair or replace damaged property as advertised.
Worker’s Compensation Insurance
Worker’s compensation exists to protect you from incidents involving your employee injuries while on the job. Most states require some level of worker’s compensation but varies from state to state.
The insurance takes care of medical bills and lost wages for the injured employee and can also help with rehabilitation costs as the worker heals. In worst-case scenarios, worker’s comp may also pay out death benefits to surviving spouses or family.
When an employee accepts the benefits of worker’s compensation, they give up their right to sue your company for whatever took place.
Commercial Auto Insurance
Commercial auto insurance protects both company vehicles and drivers in the event of an accident on the road. It can also cover damages from theft, vandalism, or other instances where the car is not in motion. In most cases, a personal vehicle can fall under commercial auto insurance if you’re using it for business purposes at the time of the incident.
This type of insurance can pay the medical bills for anyone in the vehicle and damages to the vehicle itself. When your company is the one at fault, coverage can extend to other cars or trucks involved in an accident as well.
Business Interruption Insurance
As the name implies, business interruption insurance helps offset lost income from a covered event that forces your business to close temporarily. If a disaster damages your building or someone steals necessary equipment, you can receive compensation so you don’t have to shut down for good.
Business interruption insurance may also help pay the mortgage or rent on your building or payroll for your staff. In some instances, it may give funds toward a temporary business location or additional needs to reopen doors.
Inland Marine Insurance
Any small business dealing with products, materials, or inventory moving across transport lines can opt to receive inland marine insurance. Should something happen to your assets while they travel on a truck or train, this insurance will compensate you for damage or loss.
This type of insurance only works for transportation across land and not water, as the name implies. It can also cover the costs of temporarily storing goods in a warehouse due to a logistic issue.
Cyber Liability Insurance
With so much business happening online, it’s just as important to protect your digital assets. Should your business become the victim of a cyberattack, your information and that of your customers can be taken.
Cyber liability insurance combats losses from these data breaches, viruses, and ransomware attacks. It can cover operational expenses and any fallout your clients experience from being exposed. Since these types of attacks can damage a company’s reputation, this insurance may also contain funds for public relations.
What is a Business Owner’s Policy?
A business owner’s policy lumps general liability insurance, commercial property insurance, and sometimes business interruption insurance together in one convenient package. These three forms of coverage provide a solid backbone to build the perfect policy to protect your business. Buying a business owner’s policy almost always costs less than picking up the plans individually.
Best Small Business Insurance Frequently Asked Questions (FAQs)
Small business insurance isn’t always so black and white. This FAQ serves to answer common questions about its importance at your company.
How important is small business insurance?
Small business insurance can offer protection on the things that matter most to your business. Whether a one-person sewing operation or landscaping company, insurance can help you recover quickly if you experience injury or deal with equipment breakdown. Those without insurance may not be able to survive expenses from such a setback.
Do I need business insurance for a sole proprietorship?
Every type of business structure needs insurance, especially those operating a sole proprietorship. As a sole proprietor, there is no dividing line between personal and business assets. In the event of an incident, even your house or car isn’t safe. Having insurance can absorb the blow and cover damages you’d otherwise have to deal with yourself.
Should I get insurance before starting a business?
It’s a good idea to pick up insurance during the setup phase of your business to cover anything you simply can’t afford to replace once you open your doors. Setting up an insurance policy from the get-go also helps you budget accordingly upfront so you don’t have to make allowances later on.
What kinds of business-related items does insurance not cover?
The best general liability insurance for small business covers a multitude of categories but won’t protect you from everything. Usually, these policies don’t include losses from natural disasters or damage from weather. These plans also tend not to offer coverage for incidents customers face while at your business. Some insurance companies can accommodate these areas for an additional cost.
Best Small Business Insurance Companies – Bottom Line
Although small business insurance is an expense, it is a necessary cost of doing business to ensure your assets are protected. It’s imperative to obtain insurance coverage on anything you can’t afford to replace, but there are policies available for almost everything under the sun. Any of the providers listed in this article can provide the security you need to run your business without fear of disaster.
BlueVine Review is an online lender and financial tech company with several free features that make it easy to manage business funds. Its business checking and business loan services work separately or in tandem to provide you with opportunities to help your venture grow. Find out in this BlueVine review if it’s the right place to open a business bank account.
BlueVine works well with budding business owners who desire to keep personal and business funds apart. It’s hard to top 1.5% APY for up to $100,000 on a business checking account, but this rate loses some appeal once your account grows any larger. Several free features add to the appeal, but there are limitations on monthly deposits and withdrawals that you’ll want to keep your eye on.
It’s quite easy to sign up for a checking account, and anyone from sole proprietorships to corporations can do so. You can even open a business bank account with an EIN only to keep your personal information out of the picture.
High interest rates
Very few fees
No minimum deposit required
Monthly transfer limits
Checking accounts only
Fee for cash deposits
BlueVine at a Glance
BlueVine provides business checking accounts or business loans. Business checking accounts are free to open and include several free features, including no overdraft fees and unlimited transfers. Best of all, there are no monthly fees and no minimum requirements to keep your account open, which makes it one of the best banks for startups.
It offers an impressive 1.5% interest on balances up to $100,000 and is among the highest on the market. Fees do bubble up periodically for things like outgoing wire transfers and cash deposits.
What makes BlueVine stand out are its business loans, hence earning it a spot on our list as the best bad credit loan for startups. The lender will spot you up to $250,000, considering you meet its requirements. It usually takes no more than a few minutes to get approved, and interest rates are a respectable 4.8% for payback.
Who BlueVine Business Checking is Best For
BlueVine is best for anyone starting a small enterprise that needs a specific location for business funds. Within the software, you can track expenses, transfer funds, and more without spending a penny. You may find yourself outgrowing BlueVine as your company expands, but it is a great place to start.
Bluvine Business Checking Pricing
It’s free to sign up for a business checking account with BlueVine. Furthermore, you don’t have to pay monthly fees or keep a minimum balance to keep your account open. You’ll incur fees only with cash deposits, outgoing wire transfers, or using out-of-network ATMs.
BlueVine
Features
Monthly Fee
$0
Minimum Deposit
$0
Overdraft Fees
$0
APY
1.50% on balances up to $100,000
Transactions
Unlimited
Account Types
Business checking and business loans
Cash Deposits
$4.95
ATM Fees
$0 in-network,
$2.50 out of network
Outgoing Wires
$15
Being the best business bank account for LLCs, BlueVine makes banking easy with no monthly fees and no minimum deposit required to keep your account open. They don’t even charge fees for account overdrafts. In addition, you don’t have to worry about ATM fees from BlueVine itself so long as the ATM is in-network. Anything out of network will set you back $2.50 per use. Keep in mind that you may still receive a charge from a bank for using their ATM.
There’s no maximum number of transactions you can make with BlueVine as long as you stay within monthly withdrawal and deposit limits. For instance, you can make as many direct deposits as you’d like, but cash transfers cap at $7,500 per month. You can only take out $2,000 per day from ATMs as well.
Anyone with BlueVine’s business checking account receives 1.5% interest for balances up to $100,000. To activate this rate, you’ll need to either spend $500 per month with a BlueVine Business Debit Mastercard or receive at least $2,500 per month into your account from outside sources. If you fail to meet one of the requirements, you won’t earn any interest that month. Subsequently, any money in your account over $100,000 does not receive interest either.
BlueVine does have a few fees to keep on your radar. Cash deposits incur a $4.95 charge for hitting your account, and you’ll be billed $15 for any outgoing wire transfer. Incoming transfers are free.
BlueVine Business Checking Features
BlueVine has several enticing features that make it stand out as an online bank for business. Let’s take a look at them in more detail now.
BlueVine Business Checking Account
If you’re looking for a free business checking account, you’ve come to the right place. Because business checking is where BlueVine focuses a majority of its attention, the company does it really well. Members have access to several free features and interest incentives that most other banks can’t offer.
Business Loans
In addition to checking, it’s also possible to tap into a business line of credit for up to $250,000 for those big purchases. Interest rates here are as low as 4.8%, and you may even get approved in a matter of minutes.
You’ll need at least a 600 FICO score, $10,000 in monthly income, and at least six months in business incorporated or operating in a U.S. state. After a few additional questions and access to current bank statements, BlueVine will make a decision about your loan. Check out the best options available if you’re considering a bad credit business loan.
Minimal Fees
With so many free services, one might wonder how BlueVine makes any money at all. There are no fees for starting up an account and no minimum balances you have to maintain. You won’t receive a charge if your balance drops to zero, and you won’t incur any penalties for trying to overdraw your account.
You won’t receive a charge whenever you use one of the 37,000+ ATMs that BlueVine is in-network with. It’s easy to locate these, thanks to the online ATM locator. Should you need to use an out-of-network ATM, you will incur a $2.50 fee for doing so. You can deposit cash into these ATMs as well, but BlueVine will charge $4.95 for the service.
Unlimited Transactions
BlueVine boasts unlimited transactions, which is true to an extent. You can deposit as much as you’d like from another financial institution, but you’re limited to $5,000 per month on transfers from the website or mobile app. The online bank caps cash transfers at $7,500 per month but places no limit on incoming wire transfers. You can’t take out more than $2,000 in cash from an ATM or cash back service in a single day, but there are no limits otherwise.
High Interest Rate
Opening a business checking account with BlueVine gives access to its 1.5% interest rate for amounts up to $100,000. Any funds in your account above $100,000 will not generate any interest.
You’ll have to meet one of two requirements to be eligible for this interest rate. You can either spend at least $500 per month with your BlueVine Business Debit Mastercard or have at least $2,500 coming into your account each month from outside sources. Should you not meet either of these requirements, you won’t receive any interest on your account.
Bill Pay
With BlueVine, you can manage and pay bills straight from the Dashboard on the site or mobile app. Keeping all your bills in one place helps with management, and it’s possible to link one of 40,000 payees to make the process even easier.
The software gives the option to pay from your checking account or credit card to help keep track of cash. You can schedule one-time or recurring payments within the system to ensure you never miss a bill.
Sub-accounts
If you need to separate funds into different categories, BlueVine lets you open sub-accounts with unique account numbers at no extra cost. These sub-accounts can do everything the primary account can do, minus having access to a debit card.
Transfers
It’s easy to transfer funds between primary and sub-accounts with the click of a button. Similarly, you can send wire transfers anywhere for a flat $15 per transaction. There’s no fee or limits if you receive a wire transfer from an external source.
Mobile Banking
BlueVine members can make use of a mobile app on Android or iOS to bank from anywhere. These apps are free to use and have all the same features you’ll find on the website.
Free Checkbooks
Using BlueVine, you’ll receive up to two checkbooks each year at no cost to you. If you use more before the year is up, you will have to purchase them through the website.
BlueVine Contact Info
BlueVine doesn’t hide its customer service information, listing everything you need to know on its “Contact Us” page. There’s a link to an email form, or you can call support at (888) 216-9619. The team is available from 8 am to 8 pm EST Monday through Friday.
Alternatives to BlueVine Business Checking
If BlueVine doesn’t speak to you, perhaps a similar service will. Below are some of the top online business checking alternatives to consider.
Novo is a top alternative to BlueVine and similarly only offers checking accounts for business purposes. It’s free to sign up and there are very few fees for using any aspect of the service.
Unlike BlueVine, you’ll get stuck with a $27 penalty any time you overdraw funds. However, you’re not required to keep a certain monthly balance, and the bank refunds ATM fees no matter where you use them.
Banking on the go is easy with Novo’s mobile app. You can download the software to either Android or iOS devices. Novo does fall short when it comes to cash, since you can’t deposit even a single physical dollar into your account. Read our in-depth Novo review to learn more about its accounts and fees.
Lili raises the stakes with a free tax optimizer to prevent over or underpaying. You can automatically set aside funds for tax time so there are no surprises when the time comes. The app also helps you sort through personal and business expenses so you know what to write off.
There’s no fee or minimum amount required to sign up for Lili, and a majority of its services are free to use. There are some monetary limitations on deposits and withdrawals though that may not suit larger businesses. It’s not possible to perform any wire transfers through Lili either.
If you’re saving up for a big purchase, Lili allows you to open up an account for such a purpose. Unfortunately, none of your money accrues any interest while using Lili’s free version.
Those looking to generate 1% interest or unlock additional features such as overdraft protection may wish to consider Lili Pro. This service costs $4.99 per month and should pay for itself through interest alone. Read our complete Lili review to learn more about its accounts.
Tax optimizer
No minimum balance or monthly fees
Can place money in savings buckets for future use
Several features are locked behind Lili’s paid membership
Like most online business checking accounts, Kabbage doesn’t charge fees for the setup process. You also won’t have to pay any monthly fees, and you never have to keep a minimum balance. To go above and beyond, Kabbage doesn’t charge any fees whether you’re accessing an in-network or out-of-network ATM.
For amounts of $100,000 or less, you’ll receive a 1.1% APY each month without prerequisite. Anything in your account over that limit won’t receive any interest, though. You’re limited to a sole owner since Kabbage doesn’t do joint accounts.
Kabbage doesn’t have many fees, but they do charge upwards of $4.95 for cash deposits. Outgoing wire transfers will set you back $25 anytime you need to send one out. When using the mobile app, take note that deposits can take several days longer to clear. Read our in-depth Kabbage review to learn more about its accounts and fees.
If you are interested in opening a business account, here is a detailed Bank of America Review, NBKC Bank Account Review, and Chase Bank Review packed with information about the pros, cons, and alternatives that help you choose the right business account.
No monthly fees or fees for signup, no minimum balance
High interest rate
No Kabbage fees for out of network ATM withdrawals
Axos goes beyond business checking accounts to offer business savings and personal accounts as well. Its basic business account has no fees for signing up or maintenance, and there’s no minimum balance. This account will reimburse you for any ATM fees you incur wherever you find yourself.
Business owners can also partake in a savings account, although interest rates are quite low at 0.20%. Even if you manage to squeeze into the premium savings account with a $25,000 minimum opening deposit, the APY doesn’t change.
In fact, Axos’ rates across the board aren’t that great. CD rates land at 0.20% as well, not offering much incentive to grab a certificate. You can even set up personal savings and checking accounts through Axos if you so choose. Read our complete Axos review to learn more about its accounts. If you are interested to more in-depth review for other banks, we have also US Bank Review, Capital One Review, and SoFI Review.
Several checking account options
Unlimited domestic ATM fee reimbursements
No monthly maintenance fees or balance requirement for basic checking
CD rates aren’t great
Low APY on business savings accounts
Some accounts require high deposits
Frequently Asked Questions (FAQs) for BlueVine Business Checking Review
Opening a business account with BlueVine can generate a plethora of questions. Read on to find answers to some of the most common ones.
Is BlueVine a Legit Bank?
Yes, BlueVine is a legitimate lender doing business since 2013. All its checking accounts are through Coastal Community Bank.
Is BlueVine FDIC Insured?
Yes, BlueVine is FDIC insured for up to $250,000 per member. It is insured through Coastal Community Bank.
Does BlueVine Accept Wire Transfers?
Yes, BlueVine does accept wire transfers. Incoming transfers are free, but you will incur a $15 fee for outgoing wires.
How Do You Get Approved for BlueVine?
BlueVine’s approval process for loans is fairly straightforward. You simply need to have at least a 600 FICO score, six months in business, and generating at least $10,000 per month in revenue. It is essential that your business operates or has been incorporated in an eligible U.S. state.
Bottom Line on BlueVine Business Checking Review
BlueVine business checking brings a lot to the table with a long list of free features and services. Having access to both a free business checking account and a line of credit puts young businesses in a good place to succeed. If you’re careful about how you use your money, this impressive service may never even cost you a dime.
Best Business Bank Accounts by State
Below you will find an interactive U.S map that can help you locate and compare different banks and financial institutions that offer business accounts in your area.
Short for “doing business as”, a DBA allows your business to operate under a different name. This helps give your business an identity, a purpose, and a chance to differentiate itself from the other companies out there. This article explains what a DBA is, why you’d want one, and how to file a DBA with your state.
All enterprises have a legal name established at the time of business registration. For partnerships and sole proprietorships, that legal name must be the name of the owner or owners.
A DBA, or “doing business as”, allows a company to conduct business under a different name. Although LLCs (Limited Liability Companies) and corporations get to choose a name during formation, these entities can also use a DBA to go by a different name.
When starting a DBA, you need to file a request with the state your business operates in. Once the state approves, you can freely use the DBA for advertising or legal matters. Note that your state may refer to a DBA as a fictitious name, assumed name, or even a trade name.
What a DBA Doesn’t Do
While a DBA makes it possible to operate under a new name, it is not a business structure. As a result, a DBA does not offer your business any legal protection. For sole proprietorships and partnerships, personal assets are not safe in the event of a lawsuit or debt collection.
Both LLCs and corporations grant limited liability protection, creating a barrier between your business and personal belongings. With these business structures, there are very few instances where your car, house, or funds would be at risk.
Also, keep in mind that a DBA may not permit the exclusive use of a name. In all but a few states, any other business can decide to file a DBA with the exact same name as you. You can either share the name or file a different DBA and hope for the best.
Why Use a DBA
Using a DBA can be beneficial to your business. Let’s check out some of the top reasons to file one:
Privacy
If you’re a sole proprietor or a partnership without a DBA, your name becomes the face of your company. It will appear on public records and therefore exposed to the masses. A DBA can’t separate your personal and business assets, but it can create privacy for those not wishing to have your personal name so easily accessible.
Stand Out Among the Competition
The business world is full of other companies with similar products or services trying to bring more customers their way. Using your personal name doesn’t reveal what your venture is all about.
Filing a DBA lets you carefully craft a name that customers will be drawn to over the rest of the competition. Choosing something short and memorable can make all the difference for first-time and repeat customers looking to purchase what you sell.
An IT company named John Smith may not get a second look, but filing a DBA for Tech Check is bound to draw more attention.
Expanding to New Areas of Business
After finding success in your business niche, it may be time to broaden your horizons to different product categories. If your current legal name or DBA doesn’t accurately reflect the new line of business, you can use a DBA to market this new area.
Most states allow a business to create as many DBAs as they desire. Each filing requires paperwork and a fee for the state to set up.
Credibility
Having a more official-sounding name speaks volumes for business credibility. Customers may not be as trusting of a company using only your personal name as its title.
To Open a Business Bank Account
Some banks will not open a business bank account to sole proprietorships or partnerships using nothing more than a legal name. Instead, they require proof of a DBA filing before honoring your request. Business bank accounts often come with perks to help manage company finances more efficiently.
Filing a DBA is a fairly straightforward process across the country. Here are the steps you’ll need to follow to do business under another name:
Step 1: Understand Your State’s Guidelines
Registering a DBA varies significantly from state to state. Be sure to research and understand your state’s guidelines before attempting to submit any paperwork.
Some states demand filing at the city level, whereas others mandate submissions to the county or state government. A few require registration at multiple government levels.
If you’re already conducting business in a state under your legal name, it makes sense to file your DBA at the same location. Anyone having flexibility with state selection or forming an online business may want to consider a state with minimal DBA requirements.
Step 2: Come Up With a DBA Name
Once you’ve figured out state matters, you’ll want to come up with the perfect DBA name for your company. This designation should tell customers what you are at a glance and what to expect when visiting your store or website.
Nearly every state has no rule about multiple businesses using the same DBA, so you will need to be creative in order to stand out. Catchy, fun, and unique names also tend to draw more attention and ultimately more shoppers.
However, if your name is too lengthy or difficult to spell, customers may not remember you or be able to pass your name along to others. It’s okay to consider variations with non-dictionary words as long as they spell how they sound.
Think about the full scope of your business now and in the future when deciding on a DBA name. Something too specific may make it awkward to expand to new areas down the road if you want to keep all your products and services under one name.
Each state does have some limitations on titles you can use. For instance, you can’t imply your business is an LLC or corporation with your DBA if it doesn’t fall under that business structure.
Step 3: Check if Your DBA Name is Available
With one or more names in mind, use a professional business registration service to see what’s available. When doing a search, these services will alert you to other companies with the same or similar designations. If you strike out, some platforms will take your concept and offer suggestions that aren’t currently in use.
And a Domain Name As Well
With the perfect name in hand, you should register a domain that’s the same if you ever plan to take your business online. If a domain matching your DBA isn’t available, you may want to take your name search back to the drawing board.
A domain acts as a web address for your company, and customers won’t know where to turn if it’s any different from your DBA name. Keeping the two the same helps shoppers find your site and can add to your professional appeal.
There’s no way to buy a domain name, but you can rent one for up to ten years at a time. Sites like NameCheap make it easy to see which domains are available and the costs for picking one up.
Step 4: Register your DBA
Before you can legally start using your DBA name, you will have to register it with the state. This requires filling out the appropriate forms and paying any necessary fees. You’ll have to deliver paperwork in person or by mail in some states, whereas others will let you complete forms online.
As soon as you’re official in the government’s eyes, you’ll receive a document stating that you can conduct business under your DBA name. Financial institutions or other companies may request this information before striking up business dealings with you.
Step 5: Publish Your DBA Name
You’ve registered your DBA name, and now you want to shout your new business title from the rooftops. Publishing your DBA in an approved newspaper or recognized legal publication is a great way to get the word out there.
Although optional in most areas, a number of states require this announcement within a set period after the DBA registration process. Newspaper publishers in these locations typically have a firm understanding of what the state mandates.
Work with newspapers to determine the dates your company’s information will appear and what applicable costs will be. If there’s an issue with the publication, be sure to let the newspaper know right away.
Step 6: Maintain your DBA Name
A few states will let you continue using your DBA name in perpetuity, but most require you to renew every few years. You’ll need to submit a new application and fees much the same way you did during the initial setup.
If you let your DBA name lapse, you can no longer legally use it when promoting your business. Anyone caught doing so could face serious repercussions.
How to File a DBA – Frequently Asked Questions (FAQs)
Below you’ll find answers to common questions about DBA registration.
What’s the difference between an LLC and a DBA?
A limited liability company (LLC) is a business structure combining personal protection and tax advantages. When starting an LLC, business owners register a unique name with the state.
A “doing business as” name is not a business entity and offers no protections. It simply allows a company to use a designation other than the legal one you created it with.
Can I use my DBA name on checks?
Enterprises with a business checking account can use a DBA name instead of a legal name on checks. This can boost a company’s credibility when working with clients or organizations.
How much does it cost to file a DBA?
Fees for filing a DBA differ from state to state. Depending on the state or county you work in, costs can range from just a few dollars to triple digits.
Can I file a DBA online?
Several states, especially those operating at the state level, allow business owners to file a DBA online. Any submitting information at the city or county level may have to visit a local government office to complete the process.
Bottom Line on How to File a DBA
Filing a DBA is a relatively easy process requiring a little ingenuity, a fee, and some time. Doing so can help your business stand out while affording the privacy of not having to use your personal name. Although a DBA doesn’t offer any legal protection, having one in place can significantly increase your company’s influence.
You can use ZenBusiness to search your state’s database for available DBA names. If you need inspiration, ZenBusiness will generate ideas from a list of keywords you provide. When you’ve settled on a name, use this service to send out your application in mere minutes. Read more about what Zenbusines can do for you.
Below you will find an interactive U.S map that can help you locate and compare different banks and financial institutions that offer business accounts in your area.
A Limited Liability Company (LLC) comes with a lot of perks but can be confusing to run without proper documentation. Operating agreements serve to contain everything your LLC needs to flourish. This article explains what operating agreements are and an LLC operating agreement template you can use to create one of your own.
An LLC operating agreement is a document containing crucial information about how you’ve chosen to structure your business. It serves to provide information on legal, operational, and financial aspects of your company that may come under question in the future.
When issues arise, members can turn to your operating agreement as a baseline for how to react. Each owner should have a hand in its formation and be aware of the rules within.
To finalize the document, creators should sign on the dotted line to make it a legally binding document.
Free LLC Operating Agreement Template
Here’s a single-member LLC operating agreement template that will give you a solid idea of what the document looks like.
Note that this is a generic document for Limited Liability Companies with only one member. Here a single member has full control over the LLC, and no other individuals have a membership.
What Should You Include in Your LLC Operating Agreement?
It can be challenging to capture every possible situation in an operating agreement. Start with the following sections and add things as your company grows.
1. Basic Information About Your Business
Right off the top, you’ll want to record your company’s legal name and any “doing business as” titles you’ve chosen to create. Be sure to capture your business address in the state you registered.
All LLCs require a registered agent, an individual, or a service that accepts legal documents on behalf of your business. Add the name and address of this registered agent to this section of your operating agreement.
This section should also contain your business purpose, a few lines about what you plan to sell, or the services you wish to perform. Don’t make this section too specific, as most successful businesses expand beyond their initial offerings at some point.
Place a statement of intent in your basic information mentioning that your operating agreement conforms to all the LLC laws in your state.
If you include any other basic information when filing your articles of organization with the state, you’ll want to include those here as well.
2. Member Information
After capturing the basics, it’s also wise to list details about each of your initial members. Particulars should include name, address, and job title. Since there’s no requirement to split profits evenly among owners, you’ll also want to list the percentage each one gets.
There’s no limit on the number of members your company can have, and you may wish to add more in the future. Be sure to encompass all the requirements for bringing a new owner on board.
Similarly, you’ll want to have a plan in place should a member decide to leave the company. Lay out guidelines for shifting profits and responsibilities to the other members of the team. It’s also important to document any grounds for expulsion and how to handle such a situation.
3. Capital Contributions
At the time you register your business and open your business bank account for LLC, there’s a good chance some or all of your members contributed funds, services, or other forms of capital. You’ll want to list these donations in your operating agreement and their cash value.
In the event, your business needs to raise more capital in the future, provide a guideline for who can present funds and any limits. You may also have to stipulate how interest percentages can shift if a member contributes.
4. Business Management
For managing the day-to-day operations of your business, you can elect to take a member-run approach or hire a manager. Make sure your operating agreement specifies which approach your company decides to take.
In a member-run scenario, you’ll want to create a detailed list of job responsibilities for each member, so there’s no confusion or positional overlap. How you divvy up roles is entirely up to you and your team.
Manager-managed LLCs should clearly explain the manager’s responsibilities and which areas they need to seek counsel from the owners. You can also list the salary for such a position and the length of time you expect it to exist.
States don’t require LLCs to hold meetings the way corporations do, but that doesn’t mean you shouldn’t have any. Your LLC operating agreement should specify how often your company will hold meetings, where they will take place, and how many members must attend to have a quorum.
Furthermore, decide all rules around voting to approve an action. You must choose if each member carries an equal vote or base voting shares on ownership percentage. There should be no questions about what’s needed to approve a vote, whether it’s a majority, a unanimous decision, or something altogether different.
In manager-managed LLCs, you’ll want to spell out when members need to vote on manager actions and the areas a manager is free to act on their own.
Operating agreements are fluid documents and will change over time. Use this space to specify how votes will take place to make changes affecting the company as a whole.
LLCs are in a unique position, able to take on the tax status of another type of business entity.
Many business owners choose pass-through taxation, seen in sole proprietorships or partnerships. Here, the government does not tax profits at the corporate level, taxing income only at the individual level.
Others elect to hold a corporate status, following tax guidelines that come with an S-corp or C-corp.
Whatever tax status you choose to start out with, you’ll want to record it here. Since LLCs can change tax structure as needed, you’ll want to document the process for making an adjustment down the line.
6. Dissolving Your LLC
With any LLC, there may come a time when members decide to dissolve the business. Such a process can be a monumental amount of work, but your operating agreement should cover circumstances that would cause your business to end.
Be sure to mention which members will handle each part of the dissolution, from paying off debts to liquidating assets and filling out the necessary paperwork. Once that’s all settled, you’ll want to list what happens to any remaining assets.
7. A Liability Statement
LLCs offer limited liability protection, shielding members from losing personal assets in the event your business can’t cover a debt or a fee. Sole proprietorships and partnerships do not have the same protections, leaving personal responsibility on the table.
An operating agreement is the perfect place to spell out this protection if someone ever challenges this claim.
8. Additional Provisions
At times, other provisions can find their way into an operating agreement. Additional topics often include the death of a member, how to communicate business affairs, and ways to handle disputes among members.
Many businesses use this space to document state laws governing your LLC or any special circumstances specific to your business model.
Does My Business Need an Operating Agreement?
Most states do not require an operating agreement to start an LLC. However, if you file in one of the following locations, you will need to create such a document:
California
New York
Missouri
Maine
Delaware
If you’re starting an LLC in any other state, you’re technically off the hook. However, it’s a smart move to create an operating agreement anyway.
Not having an operating agreement defaults your LLC to the rules and regulations governed by the state. While some of these may pertain to your specific business, many have to be ambiguous to account for a wide range of company types.
This can lead to confusion among members and uncertainty surrounding how to handle business matters. This lax approach could very well lead to disaster down the road.
Your operating agreement is the foundation you and other business owners can turn to when problems arise. It provides a structure for all the crucial components of your business and, since you create it, is something all members agree upon.
Use a reliable service provider like ZenBusiness to create a professional operating agreement for your LLC.
What Is The Purpose Of An Operating Agreement?
Your company stands to benefit in several ways if you use an operating agreement. Here are a few of the top reasons you should create one right away:
Legal Credibility
As you operate a business, there is always some risk when dealing with products and services. Whether justified or not, customers may have a bad experience with your company and take matters to court.
Operating agreements, especially those with a liability statement, show that LLC owners have taken the time to outline policies, procedures, and protections. Judges tend to look favorably at companies with such documents, upholding the limited-liability nature of the business structure.
In instances without an operating agreement, the court may not feel you have a formal LLC and don’t deserve the protections it affords.
Keep Members on the Same Page
Your entire ownership team needs to sign off on an operating agreement to make it an official document. As a result, every member has to agree on the content within. This includes sensitive areas like ownership percentages and responsibilities within the company.
The operating agreement legally holds each member accountable regarding company guidelines and important company decisions. When push comes to shove, his document explains how to deal with issues and situations where voting could change the course of the company.
Define Key Business Procedures
There’s so much flexibility in how an LLC can function. Areas like tax status and member roles are completely malleable to your company’s needs.
With such a fluid structure, it’s important to document key business procedures that shape the core of your business. An operating agreement is ideal for capturing these critical pieces of information and makes it easy for members to adhere to them.
Avoid Default Laws of the State
Companies choosing not to create an operating agreement must function under the LLC rules dictated by the state they register in. These rules do not take your company’s unique structure into account and instead apply blanket regulations to cover all LLC types.
As long as your operating agreement doesn’t go against your state’s rules, your business has the freedom to choose how to operate. This puts your LLC in a much better place to thrive and can steer you clear of unnecessary gray areas.
How to Create an LLC Operating Agreement Template
It is possible to build your own LLC operating agreement template by following the guidelines in the steps above. Bringing a lawyer in to help with the process can simplify the process but may cost more than a small business can afford.
Smart business owners turn to LLC formation services for drafting an operating agreement that can then be mended as necessary in the future. These services also provide formation tools and can serve as your registered agent.
Our top picks for LLC services that can help you create a professional LLC operating agreement are:
Understanding the ins and outs of an LLC operating agreement template can be a challenge. This FAQ hopes to answer questions about some key aspects of the subject.
Is an LLC operating agreement the same as the Articles of Organization?
An operating agreement and articles of organization are two completely different documents. Your LLC will turn in Articles of Organization when you form your business to register with the state. On the other hand, an operating agreement is an in-house document containing information about your business structure.
Can I make my own operating agreement?
It’s certainly possible to make your own operating agreement, and in most states, you can do so at any time. Due to its complex nature, some businesses choose to use a business registration service to help draft the document.
What is another name for an operating agreement?
Operating agreements are sometimes referred to as membership agreements. A membership agreement clearly indicates that all owners need to approve what they’ve recorded within.
Why should an LLC with only one member still have an operating agreement?
Even with just a single member, an operating agreement helps protect your personal assets if you find yourself in legal hot water. Judges sometimes treat LLCs without operating agreements as sole proprietorships and may rule against your personal assets.
As your business grows, having an operating agreement early on looks good in the eyes of potential investors. Since you’ve already laid the groundwork, bringing additional members on board may cause fewer headaches.
Bottom Line on an LLC Operating Agreement Template
Operating agreements become the cornerstone of your LLC, providing guidelines for any and all facets of your business. This single document helps keep members on the same page, explains key business procedures, and can keep personal assets safe. While most states don’t require one, an operating agreement can spell the difference between success and failure.
Generating your own operating agreement is just one of the many tools ZenBusiness provides business owners. The service is completely free in Premium and Pro plans and costs just $125 otherwise.
Sign up today so ZenBusiness can walk you through every step of the LLC operating agreement template creation process.
A Limited Liability Company is a great business structure to consider, no matter what type of business you plan to run. The many benefits of an LLC allow business owners to build the company they desire while minimizing hardships along the way. This article explains the LLC advantages and disadvantages you’ll want to know about before starting a business of your own.
Check out ZenBusiness for all the tools you need to start an LLC quickly and easily.
Pros and Cons of an LLC – Overview
Pros
Cons
Personal Liability Protection
Various Tax Options
Management Flexibility
Profit Distribution Flexibility
Builds Business Credibility
Uniqueness
Minimal Paperwork
Easy to Form
Good for Individuals
Consequences of Member Turnover
Self-Employment Taxes
Role Confusion
Can Be Challenging to Raise Capital
Can Be Expensive to Set Up
What are the Benefits of Starting an LLC?
There are several benefits of having an LLC as your business structure, no matter the size of your company. Here are some of the top benefits of an LLC to consider when deciding how to create your startup.
Personal Liability Protection
Perhaps the most standout benefit of starting an LLC is the personal liability protection they offer. As the owner of an LLC, your home, car, savings, and the like are secure even when your business can’t cover a debt, fee, or payment on a loan. This protection holds true for each member you have, whether one or several.
Sole proprietorships and partnerships offer no such protection, making your personal finances fair game in the event of a lawsuit or money issue. If there’s any level of risk with your business, an LLC can keep you safe.
If you ever find yourself signing a personal guarantee for a business debt, your personal assets may come into play if your business can’t handle the expense. Other situations where personal liability protection won’t help are combining personal and business funds, committing fraud, breaching your duties as owner of an LLC, or causing harm due to negligence.
Tax Options
As an LLC, you and your other members have a few options to choose from when setting up a tax structure. The business structure does not have its own tax classification and can choose the preferred tax status of another business entity. The four options available to LLCs are:
Sole proprietorship: For single owners only, sole proprietorships don’t pay taxes at the corporate level and instead pass all profits through to the owner. The owner then pays income taxes on this entire amount. Known as pass-through taxation, it allows sole proprietorships to avoid double taxes. The government still considers members self-employed and is subject to self-employment taxes as well.
Partnership: Partnerships always consist of multiple members, but business profits still pass down to each owner without paying taxes at the corporate level. Each owner then pays income taxes on their portion of the profits. In most cases, members have to pay self-employment taxes on income as well.
S Corporation: S corporations similarly have pass-through tax structures to dodge double taxation. Owners can choose to receive a salary from profits and pay payroll taxes on that amount. All other profits pass through the corporate tax level to members, who must pay income tax on their portion of the amount.
C Corporation: A C corporation is the one business model to pay taxes at the corporate level. Any profits taken by members are taxed a second time as income.
Each of these tax options can be favorable to LLCs at various stages of operation. It’s possible to change tax status as an LLC, but the Internal Revenue Service (IRS) typically only allows such a move once every 60 months.
Unless you decide otherwise, your LLC defaults to the pass-through taxation guidelines of a sole proprietorship or partnership, depending on whether you have one or more members. Being able to avoid paying taxes at the corporate level can be a massive boon for LLCs just starting out.
Management Flexibility
When creating an LLC, members can decide to run the show themselves or hire a manager to oversee day-to-day operations.
Individuals with or without other employees have the freedom to create a business the way they see fit and run it how they choose. LLCs with multiple owners having an understanding of a company’s inner workings can run different departments to ensure the business functions as intended.
Those without expertise in running an organization can hire or appoint a manager to control the workings of the business. Members may choose a more passive role or remain involved in some way.
It’s up to you as a business owner to decide how the leadership structure of your LLC operates. There are no limits regarding how many members an LLC can have, nor is there a requirement to maintain a rigid board of directors that corporations must maintain.
Profit Distributions
LLCs don’t have a fixed management structure, which is quite different from other business structures. With partnerships, owners must split profits evenly between themselves. Corporations have shareholders who receive profits based on how many shares each one has.
Members of an LLC get to choose how to distribute profits, however, this must be planned out in your LLC operating agreement. If a particular owner invests more time or capital, that person can bring in a greater share of earnings than others do. It’s up to the current ownership to decide how distributions of income work at the time of startup, but even this can change as a company grows.
You may need to provide reasoning behind the disbursement of profits to the IRS when filing taxes. It must be clear that distributions reflect leadership structure and aren’t an attempt for one or more members to avoid falling into a higher tax bracket.
Business Credibility
Partnerships and sole proprietorships are legitimate business models, but they don’t always appear very credible on paper. Businesses and customers you deal with typically see LLCs as more credible, professional, and trustworthy.
Your business must include some form of the “LLC” or “limited liability company” in your name, further cementing your status as a company worth doing business with.
Uniqueness
With few exceptions, forming an LLC in your state gives you unique access to the name you choose for your business. Other companies can’t come along and create a name identical or similar to yours, offering you a niche to work out of.
Businesses in other states can still use the same name as you unless you register an LLC there as well. If you’re thinking of expanding to a nearby state, it may be prudent to do so. Some states will allow you to reserve a name for a set number of months while you get your affairs in order.
Minimal Paperwork
Another huge perk of forming an LLC is the minimal amount of paperwork needed to get your business off the ground.
Unlike corporations, LLCs don’t have to hold meetings or record meeting minutes. There’s no need for a board of directors or officers and the paperwork required to maintain those positions. Less record-keeping allows members to focus on other matters instead.
At formation, LLCs should establish an Operating Agreement containing all the rules those in your business need to follow. Without this document, your LLC must adhere to the state’s regulations, whether they make sense for your company or not.
Many states do require annual reports summarizing changes made during the last year to keep government records current. Requirements for each state vary considerably, but the paperwork is usually still minimal.
Easy to Form
When the time is right to create your LLC, the process is quite simple. There may be subtle differences depending on the state you form in, but it is something you can do without the help of an attorney.
Below are the steps any business owner needs to follow when setting up an LLC. You can also hire one of the best LLC formation services to create and enjoy the benefits of your LLC at an affordable price.
Step 1: Choose your state
Most business owners prefer to start out in the state they live in, considering they already have knowledge of how the state runs. Delaware and Wyoming can be great options for registering a business, thanks to business-friendly processes and tax perks.
Step 2: Name your business
As mentioned earlier, you’ll have to come up with a name someone’s not already using in your state. Be sure to follow any state guidelines for naming and avoid anything that may mislead customers.
Step 3: Hire a Registered Agent
A registered agent handles legal and state matters that come your business’s way. You can choose to be your own registered agent, but most LLCs look to knowledgeable registered agent services to handle this role.
Step 4: File Articles of Organization
Articles of organization is the sole document you need to file with the state. It provides the government with the into it needs to approve formation.
Step 5: Write an Operating Agreement
This agreement stays within your LLC and should provide a financial, operational, and legal footprint for members and employees to follow. Not creating an operating agreement puts your business into the hands of state government guidelines when disagreements occur.
Step 6: Get an Employee Identification Number (EIN)
An EIN (Employer Identification Number) is effectively a tax code for your business. LLCs with more than one member require an employee identification number, but you can pick one up for free from the IRS.
Good for Individuals
LLCs work well for large businesses, but the business structure serves just as well for individuals building a small venture from scratch. A single business owner without employees still receives the limited liability protection and tax flexibility a larger LLC does. As your business grows, you can modify facets of your LLC to accommodate more staff or additional owners.
Disadvantages of an LLC
Unfortunately, not everything having to do with an LLC is an upside. Here are a few disadvantages to keep in mind when choosing an LLC as your business structure.
Consequences of Member Turnover
Members are the backbone of an LLC and can cause havoc if one or more choose to leave. Owners need to carefully redistribute profits, and states may have specific roles regarding the matter. In some instances, the state may require the dissolution of an LLC after just one member departs.
This sticky situation doesn’t occur in corporations that constantly see shareholders coming and going as shares trade from one person to the next. With an LLC, it is possible to curb some of the chaos through careful documentation in an Operating Agreement.
Self-Employment Taxes
Unless you’ve chosen to follow a corporate tax structure, the IRS records LLCs as partnerships or sole proprietorships, depending on the number of owners. In these instances, owners are still considered to be self-employed.
Self-employed members must pay Social Security and Medicare taxes in an amount relative to what the business earns. This self-employment tax is in addition to income taxes on profits.
Role Confusion
Corporations offer clear roles between owners, directors, and employees with rigid rules about how each one functions. LLCs, on the other hand, do not have such requirements. Without guidelines in place, it can be very confusing to know who can perform certain functions and where divisions of responsibilities lie among higher-ups.
LLCs can create clear-cut lines with the help of an Operating Agreement so long as members take the time to properly flesh the document out.
Can Be Challenging to Raise Capital
Most LLCs will need money at some point, but the business structure doesn’t provide clear opportunities for investors to get involved. Because of the way LLCs do ownership, it’s not nearly as simple to add members as it is with a corporation.
Many investors are similarly deterred by an LLC’s tax-exempt status, as investments can create unrelated taxable income.
Cost
A limited liability company is more expensive to form than your average sole proprietorship or partnership, which can be a deterrent to someone just starting out. State fees can be well into the hundreds per year, a difficult challenge to surmount with little to no income flowing in.
In many states, there’s no cost for starting up a sole proprietorship. Those wishing to use a DBA still pay far less in fees.
Benefits of an LLC – Frequently Asked Questions (FAQs)
The benefits of an LLC play a major part in determining which business structure to use for your business, but they don’t offer the complete picture. This FAQ serves to answer additional questions you may have about limited liability companies.
Is an LLC a good idea?
LLCs allow a lot of flexibility that other business structures don’t offer. No matter your company size, you can also benefit from personal liability protection, minimal paperwork, and easy formation.
How do LLC owners make money?
As a business records profits, owners are able to take out their share as income. Thanks to the flexibility of an LLC, profit contributions to members do not have to be the same amount.
Can an LLC have employees?
There is no limit on the number of employees an LLC can have. Any LLC with more than one member requires an employee identification number (EIN) for tax purposes.
How does an LLC avoid self-employment tax?
The only way for an LLC to avoid self-employment tax is to choose a C corporation tax structure. Although the government taxes income on the corporate level, owners do not have to pay self-employment tax. It is possible to adjust an LLC’s tax status every five years as needed.
Bottom Line on the Benefits of an LLC
The benefits of an LLC far outweigh the negatives, providing an opportunity for those starting a business to protect personal finances while offering pass-through taxation. As LLCs grow, their flexible nature allows for changes while keeping paperwork to a minimum. Easy formation is the cherry on top that should have all new businesses considering LLCs at startup.
To make the process even easier, those wishing to start an LLC can turn to ZenBusiness for all their setup needs. The LLC service has the knowledge to create a business in any state for as low as $49 before state fees.
A limited liability company (LLC) is a business entity operating out of a specific state. Its particular model caters to both single-person enterprises and large organizations through personal protections and tax benefits. This article explains what is an LLC business, its advantages, and the steps needed for formation.
A limited liability company, or LLC, is a popular type of business structure in the United States. Sometimes referred to as a hybrid entity, it takes some of the best pieces of corporations and partnerships/sole proprietorships and mashes them together.
Rules for registering your business as an LLC and regulations for maintaining your enterprise do vary from state to state. Many states allow foreigners and citizens alike to create this type of business structure.
There are no restrictions on the size of an LLC, making the structure available to anyone with a business. One or more individuals can own an LLC, known as “members”. Even small companies or startups with a single member can take advantage of an LLC’s benefits.
Common examples of LLCs
Many large businesses are actually LLCs. Some prominent examples include search engine giant Google, tech company Microsoft, and ecommerce behemoth Amazon. Other big names include Johnson & Johnson, General Electric, Sony, and Pepsi-Cola.
Advantages and Disadvantages of LLCs
There are several upsides and very few negatives to forming an LLC. Let’s take a look at these now.
Advantages
Personal Asset Protection
Perhaps the most appealing aspect of a limited liability company is the ability to safeguard its owners’ personal assets. Should your business become subject to a lawsuit, LLCs create a clear and distinct line between personal and business. Even if your company can’t afford to pay damages, those filing against you are unable to take from your personal finances.
This is not the case with a partnership or sole proprietorship, where there is no such distinction. If hit with legal penalties, your personal assets are fair game.
Tax Options
LLCs have the advantage of choosing a tax status from other business structures, be it sole proprietorships, partnerships, S corporations, or C corporations.
Because of this, it’s rare for this business type ever to pay taxes at the business level. LLCs can benefit from pass-through taxation, where profits pass straight to owners. Members then record their earnings on individual tax returns.
On the other hand, C corporations get hit with double taxes on both the top level and again when reporting on individual returns. When it comes to an LLC vs corporation comparison on taxes, the former takes the win.
Management Flexibility
Whether you’re flying solo or wish to own your business with others, LLCs have a place for you. There are no limits to the number of members an LLC has to have, and that number can change as your company progresses. It’s even possible to divide up profits among these individuals in specific ways.
The ownership also gets to structure the organization how they see fit. They can take it upon themselves to run the business or hire a manager to oversee day-to-day operations. Read more about member-managed vs manager-managed LLC.
Business Credibility
Many other organizations view a limited liability company as a more formal business entity than a sole proprietorship or partnership. Adding the LLC or some form therein to your legal business name goes a long way with customers as well. Some banks may require proof of LLC status to make available certain types of business bank accounts or small business loans.
Simplicity
An LLC is typically easy to form and maintain from year to year. There’s little paperwork involved in the process, and states usually require just one annual report to maintain good standing.
Business owners also have to worry less about administrative procedures that can bog down the corporate structure. With an LLC, you don’t have to hold annual meetings, assign specific officer roles, or keep a record of company minutes.
Disadvantages
Cost
Anyone settled into a sole proprietorship or partnership can benefit from the minimal costs of maintaining business status. Fees for forming an LLC can add up, as many states require upfront payment before allowing you to create your business. Similarly, LLCs must have a registered agent to handle legal documentation.
As each year passes, many states add on additional costs in the form of franchise tax fees or through annual reporting.
Transferring ownership
It’s a bit of a pipe dream to assume the members you start your business with will be there until the end. In corporations, individuals can buy or sell stock to modify ownership, but the same isn’t true for an LLC.
When it comes to transferring ownership in an LLC, usually all members have to approve changes to ownership percentages or add new members into the fold. As you form your LLC, it will be up to the ownership at the time how to structure this rule.
What is an LLC – LLC Formation Process
Forming an LLC is a relatively simple process, but there are some necessary steps involved to ensure compliance with the state. Be sure to follow these steps when creating a business of your own. If you’re interested, read out in-depth guide on how to start an LLC.
Step 1: Select Your State
When starting up an LLC, you can choose any state in the Union to do business in. There’s no requirement when selecting the state you live in or plan to work out of, but most owners opt to use this location for the sake of convenience. If you plan to have a physical location, you will want to establish an LLC in the state with your store.
Each state has its own requirements for forming an LLC, and some tend to have better benefits than others. If looking to form your LLC in a state not your own, you will need to file as a foreign limited liability company. Doing so often comes with additional fees and paperwork.
Step 2: Name Your LLC
Naming your LLC isn’t as simple as coming up with a cool name. LLCs in each state must have unique names distinguishable from all other registered names when you go to file. Using a name search through one of the best LLC services can help you whittle down your options and reduce issues during submission.
Customers have a much better chance of remembering short names that are both clear and memorable. Be sure not to lock yourself into a very specific business type if you plan to expand to new areas in the future.
Your LLC’s designation can’t be misleading to potential customers, though. Anything with “corporation” or some form of the word will surely end up on the rejection file. Along those same lines, it’s not wise to include a word or phrase that alludes to a different business purpose. States may have other rules about naming conventions that you’ll want to be sure to follow.
It’s a good idea to come up with a name quickly, even if you’re not quite ready to file. Several states charge a small fee to hold names for a short period of time while you finalize other details of your startup.
Step 3: Choose a Registered Agent
Every LLC needs a designated registered agent serving as your point of contact for legal and governmental matters. Whoever you choose needs to work regular business hours and have an address in the state you’re forming in.
There’s no rule stating you can’t be your own registered agent, but you’d need to be on hand to handle matters as they arise. Most business owners turn to a service to function as a registered agent. Going with the best registered agent services frees you and other members up to perform other tasks while having peace of mind that sensitive matters won’t get missed.
Step 4: File Your Articles of Organization
This form, submitted to the state, contains important information about your company. Each state’s form is a little different, and some areas may call the document certificates of organization or certificates of formation instead.
As one of your final steps for formation, you’ll need to provide your company name, address, registered agent, and what your business plans to do. Each owner’s name also needs to be on the form with an expectation for how long your venture will exist.
Step 5: Create an Operating Agreement
Your operating agreement serves as the foundation of your business from a legal, operational, and financial aspect. Each member should collaborate to create the rules everyone must follow when running the show.
Although this document is unique to your business, it’s essential to capture key points members can turn to whenever there’s a disagreement among the ranks. List everything that ends up in your articles of organization as a reference and who your members are. This is a great place to record ownership percentages and where responsibilities lie.
From a financial standpoint, cover your tax status and how the company plans to keep financial records. When profits roll in, it should be clear where every penny ends up. There should even be rules on who can change your operating agreement and the method to do so.
Step 6: Get an EIN
An Employer Identification Number (EIN) becomes your company’s unique code for all tax purposes. Any LLC will more than one member requires one, but even single-member LLCs benefit from using an EIN over a social security number. You’ll use this nine-digit number for paying taxes, opening a bank account, or obtaining business licenses.
Step 7: Stay Compliant
Nearly all states require you to check in at specific intervals after forming your LLC. The most common duration is one year, but some governments may wish to hear from you sooner or later. These reports help keep authorities apprised of any changes to your organization and often come with a maintenance fee.
What is an LLC – Top LLC Services
It is possible to accomplish every step of the LLC formation process on your own, but doing so is tedious at best. Missing even one small detail can lead to applications being rejected and significant delays in opening your business to the public.
Consider using an LLC service to do all the heavy lifting for you. These services understand the specific needs of every state, can expedite filing, and are able to function as your registered agent if needed. When it comes time for your yearly report or pooling together tax information, these services can offer assistance there as well.
As you consider an LLC service to help get your business off the ground, we recommend one of the following:
What is an LLC – Frequently Asked Questions (FAQs)
This section serves to answer some of the most commonly asked questions about what an LLC is.
What’s the point of having an LLC?
If you’re starting a business, you need some type of business structure. LLCs provide limited liability, protecting an owner’s personal assets from those of the company. They also offer pass-through taxation, allowing businesses to avoid paying twice on profits.
What’s the difference between LLC and INC?
LLC stands for limited liability company, a type of business structure giving owners tax flexibility and lenient ownership requirements. Anything with INC represents a corporation, a completely different structure with its own set of rules.
What is the owner of an LLC called?
Owners of an LLC have the designation “member”. In an LLC, there can be a single owner or multiple people at the top level. LLCs have the freedom to assign different roles to members and divide up profits as the group sees fit.
How does an LLC save money on taxes?
LLCs benefit from tax-through formation, a special status usually reserved for sole proprietors or partnerships. Here, earnings don’t get taxed at the business level. Instead, profits pass straight through to members, who then pay taxes on the individual level.
What is the best state to register an LLC?
Delaware and Wyoming present great options for registering your LLC due to business-friendly processes and tax benefits. Still, in many cases the best place to file is in your home state, where you’re likely already familiar with laws and regulations. Read more about the best states to start a business.
Bottom Line on What is an LLC
LLCs are a popular business structure combining many of the benefits that come with sole proprietorships, partnerships, and corporations. Its two standout features are the protection of your personal assets and the opportunity to pass-through taxes on the business level.
Forming an LLC can be a lengthy process, from coming up with a name to filing all the necessary paperwork. LLC services can remove much of the work and stress, allowing you to focus on the things that matter most.
ZenBusiness has one of the cheapest LLC services, starting at just $49 to get your company up and running. Their filing process is swift while offering the tools and guidance to get everything right the first time. Check out ZenBusiness today to create the LLC of your dreams.
Many businesses don’t concern themselves with online reviews, but these comments are an integral part of your overall success. This article looks at 60 unique facts and statistics showcasing why online reviews should be paramount in every business’s growth strategy.
Top 10 Online Review Statistics
Only 5% to 10% of consumers write reviews
89% of consumers are ‘highly’ or ‘fairly’ likely to use a business that responds to all of its online reviews
Only 7% of consumers say they’re ‘not at all’ suspicious of reviews on Facebook
34% of consumers only leave positive reviews
7% of consumers only leave negative reviews
85% of all reviews come from only four review sites
Customers don’t trust companies with ratings below 4 stars
98% of people read online reviews for local businesses
Businesses that claim free listings on multiple review sites make 36% more revenue
90% of customers read online reviews before visiting a business
Online Reviews and Their Impact on Businesses
Whether you like it or not, online reviews are the first thing customers want to see before ever visiting your store. No matter how amazing your website or physical location may be, individuals won’t even bother walking through the door if they don’t like the rating they see.
Low scores mean fewer customers, leading to diminishing sales and abysmal revenue numbers. Those with stellar reviews are prone to new customers based on a rating alone. Businesses maintaining ratings of 4 stars or more see significantly higher revenue numbers and customer retention.
Reviews also provide insight into the consumer’s mind. Any venture taking the time to read such feedback can see what shoppers enjoy and the areas they dislike. Addressing concerns while focusing on the good can have a considerable impact.
How Important Are Online Reviews?
Now more than ever, customers are looking to the internet for feedback before making decisions regarding a purchase. Nearly the entire population reads online reviews before buying products and services.
What those reviews say has a monumental impact on how customers react to your business. They’re more likely to trust businesses with online reviews than those who don’t due to an increased risk of the unknown.
Reviews speak volumes and carry just as much weight as a personal recommendation from a close friend. Conversely, negative feedback is enough to scare off all but the most stubborn customers from shopping at your store. It’s clear that online reviews have the power to make or break your company, especially if you’re just starting your business.
60 Facts & Statistics about Online Reviews
1. Only 5% to 10% of consumers write reviews (USA Today)
Of all consumers to make a purchase from your store, only 5% to 10% will take the time to write a review. What’s shocking is that even this low number still accounts for $400 billion in online sales revenue! Businesses encouraging more customers to review products will have more influence on other shoppers and the potential to generate even more revenue.
2. 89% of consumers are ‘highly’ or ‘fairly’ likely to use a business that responds to all of its online reviews (Brightlocal)
Reviews in this day and age are not a one-way street. Customers like to hear from business owners even more than they like posting reviews about whatever product or service you’re providing.
With review sites allowing businesses to respond to reviews, what you say can have a huge bearing on future revenue. Responding to all your online reviews, as challenging as that may be, helps you appear engaged and in tune with shoppers.
3. Only 7% of consumers say they’re ‘not at all’ suspicious of reviews on Facebook (Brightlocal)
Facebook tends to get a bad rap when it comes to sellers. Its Marketplace is plagued with scammers and fake businesses using unscrupulous methods to make a buck. In the eyes of many, this translates to business reviews as well.
Only 7% of consumers don’t think twice about the reviews they see on the site. The vast majority need something more than positive notes to trust what you’re peddling. When allowing reviews on Facebook, make sure to keep your page up to date with information and imagery showing people you’re the real deal.
4. 34% of consumers only leave positive reviews (Brightlocal)
Perhaps the best type of consumer, this 34% wedge believes the old adage that it’s better to say nothing than speak negatively of someone or your business. Good products or experiences go on record, but one-third of people won’t leave a bad review even if they receive the wrong item from you three times in a row.
5. 7% of consumers only leave negative reviews (Brightlocal)
On the contrary, some people are just never happy. No matter how fast the shipping, how stellar the client support, or how amazing the product, 7% of consumers will never leave a positive review. Fail to meet expectations, and you just might end up with that scathing one-star review.
6. 85% of all reviews come from only four review sites (Reviewtrackers)
It may seem overwhelming to stay on top of reviews scattered all over the internet, but it’s not as bad as you think. As of the summer of 2022, four sites make up 85% of all reviews posted online.
Google sees the vast majority with 73%, and Yelp follows with 6%. Both TripAdvisor and Facebook tie in with 3% of total reviews. Businesses with limited bandwidth should focus on these four sites, responding to reviews and listening to customer concerns. A high rating on these sites can do wonders in client generation and sales.
This interesting statistic is precisely why it’s important to monitor and address customer reviews. The moment your review score on a site drops below four stars, customers lose faith in all facets of your business.
Following customer chatter can help you pinpoint issues as they arise and not after your review score has taken a heavy blow. Customer relationship management services can offer an additional view into shoppers’ minds to stay on the pulse of what makes them happy. Read more about the best CRM software.
8. 98% of people read online reviews for local businesses (Brightlocal)
Even if you have a brick-and-mortar location in your town, potential customers look online for dirt on your store before ever stepping foot inside. An incredible 98% of people get their initial reaction to your business from postings about you on the internet.
It doesn’t matter if you perform internet sales or wish to have an online presence at all. You still need to read what the world says about your venture and do everything in your power to keep that rating high.
9. Businesses that claim free listings on multiple review sites make 36% more revenue (Womply)
We know that Google brings in far more reviews than any other review site, but that doesn’t mean the buck should stop there. Businesses taking the time to claim listings on multiple sites make on average 36% more revenue than those that don’t. What’s more, you can focus on free listings and still reap the benefits.
10. 90% of customers read online reviews before visiting a business (Invesp)
Whether your store is online or in-person, 90% of customers are now reading your reviews before paying you a visit. Only 10% of people will try out a building or site without scrutinizing it first, and this small number won’t keep the lights on.
Online reviews are now THE go-to place for gathering information on the kind of business you are before deciding to shop with you. This goes above and beyond personal recommendations and all the marketing campaigns you can come up with.
11. Yelp sees 26,380 new reviews posted every minute (Invesp)
Yelp is the second most popular review site after Google, but business owners should not underestimate its significance. It sees a staggering 26,380 new reviews every single minute about your business and the competition.
With so many customers using Yelp to post reviews, your team should check the webpage frequently for pertinent mentions. Not only can you get leverage into what others are doing, but it’s also possible to assess what customers think about you.
12. 69.7% of people consult Google for local business reviews (AgilityPR)
A majority of business reviews end up on Google, so it’s only natural that customers migrate there to read the latest on local companies. Google makes reviews overt when searching for website information or an address, and scary ratings can turn potential clients away in a hurry.
39% of people check Facebook and 25% view Yelp, either apart from or in tandem with a Google search. Google is still the top dog, but don’t rule out the impact other review pages can also have on your appeal to customers.
13. Google removed 130 million fake reviews in 2019 and 2020 (AgilityPR)
In 2019 and during the early onset of the pandemic, Google cracked down on fake reviews polluting its system. The resulting purge removed over 130 million counterfeit comments left to falsely boost or tear down a company’s credibility. Already a multi-billion dollar problem, many fear things will only get worse.
Google is well-known for its algorithms and anti-deception tactics, but no one can locate every rotten egg. As a business owner, make the most of credible reviews through client interaction and tackling concerns. This way, a few fake reviews stand out like a sore thumb and won’t water down your rating much anyway.
14. 62% of consumers are more likely to purchase if they see photos and videos of other customers (Findstack)
Feedback from other customers is paramount in putting the shopper in the shoes of a current client. Pictures and videos are worth a thousand words, as consumers gravitate more toward reviews they can visualize.
The extra media also gives an additional layer of credibility to a review and your business as a whole. If you have the means, make it as easy as possible for customers to upload images or videos to a review so they have more incentive to do so.
15. Only 9% of customers would consider engaging with a business that has an average star rating of 1 or 2 stars (Findstack)
No one is perfect, and there’s a decent chance you’ll receive some negative reviews during your time running a business. The important thing is to react appropriately and resolve any issues that may lead to additional dings.
Once you’ve reached the 1 or 2-star mark, only 9% of all customers will even consider doing business with you. The road to recovery would be slow if there’s any hope of salvation.
16. Businesses that have 200 or more reviews have twice as much revenue compared to others (Findstack)
It can be slow-going for new businesses, and would-be shoppers are leery about purchasing from a site with only a handful of reviews. Although reviews are a primary driver of customers to your site, the right marketing tools can get the ball rolling.
After reaching that 200 review mark, businesses see on average twice as much revenue as sites with lower counts. This magic number is the turning point where customers believe you’ve proven yourself and are worthy of their business. Of course, make sure these reviews lean strongly on the positive side.
17. 73% of consumers don’t even consider reviews if they were not written during the past month (Statuslabs)
Last month’s news is ancient history. Nearly three-quarters of consumers will sort by “Most Recent” and ignore anything over a month out. Shoppers want to make sure you’re keeping up your A-game, and there’s no slip in service or quality. Teams change, and products change, but your company still has to live up to expectations.
18. 71% of people are willing to submit satisfactory reviews if it’s easy to do so (ServiceDirect)
Customers aren’t afraid to share their opinions about your product or service; they just don’t want to be inconvenienced along the way. The vast majority of individuals will submit a positive review if you provide an easy access point. After a customer makes a purchase, follow-up communication can be a great way to keep clients engaged while providing a one-click review opportunity.
19. TripAdvisor has over one billion reviews (TripAdvisor)
TripAdvisor is currently the world’s largest travel guidance platform on the web. It stands out from other sites by allowing individuals to share reviews on locations and experiences around the world.
Voyagers heading to all corners of the globe use the site for advice and feedback from those who have walked the path before. In early 2022, the company reached a significant milestone with over one billion reviews.
20. 41% of travelers have avoided a destination over fears it may be a tourist trap (BreakingTravelNews)
Online chatter about travel hotspots has a significant impact on those making trip plans. 41% of individuals researching online have chosen to avoid a location completely over feedback from other travelers. Even if you’re not in the travel business, such a statistic shows the power online reviews have on others.
21. People spend up to 49% more money at businesses that reply to reviews (Womply)
Customers look more favorably on businesses that take the time to reply to online reviews. Companies choosing to respond on review sites bring in up to 49% higher than those without such interactions. Such a statistic highlights the need for review monitoring, and even hiring additional staff to cover the role can produce a massive return on investment.
22. 75% of businesses don’t respond to any of their reviews (Womply)
Missing out on customer interaction through online reviews hurts businesses two-fold. As mentioned above, there’s a massive oversight in potential revenue that comes with companies taking the time to reply to online reviews. Customers are much more likely to shop at your store or site in the first place if they see an acknowledgment from your team.
As hard as it is to imagine, 75% of businesses are losing out by not responding to any of their online reviews.
23. Businesses with 4 to 4.5-star ratings earn the most revenue (Womply)
It makes sense to think companies holding 5-star ratings are the best, but statistics show this isn’t the case. While there’s no doubt that low-rated businesses turn away potential shoppers, flawless reviews have the same effect. As it turns out, a perfect rating appears fake in people’s eyes, leading them to browse elsewhere.
Businesses sitting somewhere between 4 and 4.5 stars actually bring in the most revenue on average. Customers see that, despite your imperfections, you’re still able to provide what they’re looking for.
24. Businesses average 82.5 total reviews across all review sites (Womply)
Even with so many free listing sites, businesses only average a total of 82.5 reviews across all of them. We learned earlier that revenue spikes considerably after 200 reviews in the tank, so most businesses are leaving money on the ground.
These companies likely aren’t providing easily-accessible opportunities for buyers to voice their opinions. Zendesk is a software package capable of handling follow-up emails with clients asking for feedback in the form of a review.
25. Businesses with more than 9 reviews in the last 90 days earn 52% more than average (Womply)
Your shoppers aren’t looking for hundreds of reviews per week, per month, or even per year. People like to zero in on what your company is doing at the moment and want to hear about it from more than one person. Still, generating just nine reviews over the last 90 days of business can earn 52% more in sales than those with less customer feedback.
26. 19% of the reviews the average business receives are negative (Womply)
In the grand scheme of things, you’re going to have to deal with the occasional bad review. However, how often should you expect to see one?
The average business tallies a negative review about once in every five postings. That may seem like a lot, but it still keeps your rating just above the 4-star mark. Above-average companies end up with ratings closer to 4.5 stars and are even more desirable to shoppers.
27. Positive review rates in the United States are highest in Maine and Vermont (Womply)
As more business move online, products can reach new parts of the country. Buyers from New England come across as the happiest, with Maine and Vermont leaving roughly 85% positive reviews each. New Hampshire rounds out the top five in the same category.
Nevada brings up the end of the list but still broadcasts a 77.7% positive review rate. People genuinely are willing to post positive reviews from coast to coast if you facilitate the process.
28. Customers read restaurant reviews more than any other business type (Brightlocal)
No industry leans on reviews as heavily as restaurants do. Would-be customers flock to the internet for diner feedback more than any other business type. Every undercooked steak, long wait, or rude staff member could go into the books as a deterrent for future business.
29. Only 48% of consumers would consider using a business with fewer than 4 stars (Brightlocal)
The 4-star rating stands at the precipice of a large cliff your business does not want to venture off of. Although customers look highly toward anything between 4 and 4.5 stars, interaction drops drastically once you reach 3.9.
It’s up to you as a business owner to steer your vehicle away from the 3.9 mark and stay in the public’s good graces. Customer relationship management tools help keep your team engaged with consumer needs so you have a clear direction moving forward.
30. People use mobile internet browsers more than any other method for reading reviews (Brightlocal)
We’re always on the go in this day and age and rarely have time to sit in front of the PC to read reviews. Instead, we spend the most time looking at reviews on a mobile internet browser than anywhere else.
Many businesses forget about the unique formatting requirements mobile devices need to see and read the information clearly. While you can’t control what Google does, you can drive people toward Google in a mobile-friendly way. It’s also worth noting that internet browsers see more use than apps.
31. 92% of users will use a local business if it has at least a 4-star rating (Invesp)
If you can keep your local business above a 4-star rating, you’ve already won over 90% of the people in your community. It doesn’t matter if your business is next door. People still head online to make a decision about you before stopping by in person. It’s imperative to stay up to date with your online reviews, even if your company doesn’t do a lick of digital business.
32. The majority of customers read 2-6 reviews before trusting a business (Invesp)
The best review imaginable isn’t going to cut it if you don’t have others saying the same thing. It doesn’t take long for the average consumer to flip through online reviews, and most people need to see two to six good ones before putting trust in you. While that seems like a steep ask, it also helps customers weed out fake negative postings that don’t accurately reflect your business.
33. Average reviews are only 200 characters (Reviewtrackers)
Over the past ten years, Google and Facebook have trended toward shorter customer reviews. On average, customers type out 200 to-the-point characters when sharing about their business. This is no more than a few sentences with specifics about their experience.
Yelp and TripAdvisor still feature higher review counts, with an average closer to 600.
34. 53% of customers expect businesses to respond to negative reviews within a week (Reviewtrackers)
Responding to reviews is already a huge feather in a business’s cap, but it goes one step further. When customers post a negative review about your company, half of the people expect an explanation within the first seven days. Missing the mark here can give the impression you don’t have a solution to the problem and might scare other customers off.
35. 67% of people believe fake reviews are a problem (NearMedia)
People have learned not to believe everything they hear on the internet, and this holds especially true when it comes to online reviews. Two-thirds of people believe fake postings are a problem and weigh this factor when reading about your business.
Although review sites like Google take great lengths to remove fake reviews, it doesn’t have the means to catch them all. What’s worse, 33% of the population don’t yet consider fake reviews to be significant when casting judgments on your site.
There may not be a way to stop fake reviews from targeting you, but these cheap imitations tend to disappear in a sea of credible, positive feedback. Don’t expect these satisfactory reviews to shop up on their own. Reach out and incentivize customers to share their experiences.
36. 57% of consumers need at least a 4-star rating before they choose to use a business (Brightlocal)
Online businesses are numerous, and consumers will likely browse reviews before picking out the best one to shop at. 57% of people will turn away from any business with less than our stars as an overall rating.
While an exciting web design and a cool name are crucial, don’t forget to invest in the customer experience, reading feedback, and handling concerns that may pull your rating into no man’s land.
37. 80% of 18-30-year-olds have written online reviews (Brightlocal)
18 to 30-year-olds grew up in a digital age and have the best handle on how the system works. 80% of those in this category are already familiar with the online review process and have written at least one. This is a great demographic to target when asking for business reviews.
When using HubSpot’s customer relationship tools, filter your existing list of contacts by this age range and prompt them for those reviews when you follow up after a sale.
38. Only 41% of consumers over 55 have written a review (Brightlocal)
Unlike the younger demographic, those growing up before the age of personal computers have a much smaller digital footprint. Of those 55 and older, only 41% have ever written any type of review. It stands to reason that they read fewer reviews as well.
When marketing, it’s understandable to hone in on younger generations for the most feedback. However, there’s still a considerable number of those in the 55 and up crowd willing to contribute to your site if you give them a chance.
39. 22% of consumers will not buy after reading just one negative review (WebsiteBuilder)
Negative reviews can bear a heavy burden on your business, whether justified or not. One in five consumers will walk away after reading just one negative review posted about your company. When you break down the math, that could be upwards of 30 customers.
While probably an unfair course of action, the loss of customers spells fewer sales and revenue. To make matters worse, only 40% will stay with you after uncovering three negative reviews. It’s possible to avoid all negative reviews, but your response to them and the number of positive reviews you get will help compensate.
40. Consumers trust peer reviews 12 times more than manufacturer descriptions (Econsultancy)
Big-box stores like Amazon have tainted the consumer perception of a good product description for the worse. Customers translate this way of thinking to all websites and will be wary of descriptions listed about their own goods.
Luckily, consumers trust the information in peer reviews 12 times more than anything you have to say. Encouraging consumers to post product details, experiences, and pictures can be incredible selling points on top of a flattering score.
41. 27% of people will only trust reviews if they believe they are authentic (WebsiteBuilder)
Our society is not as trusting as it once was, and many individuals are skeptical of information found on internet sites and online reviews. Upwards of one-quarter of the population will only trust reviews if you’ve gone to enough lengths to show credibility. In their eyes, anything looking suspect isn’t worth considering.
42. Only 33% of travelers posted a travel-related review (WebsiteBuilder)
Many people love the joys of travel, but apparently, we don’t like posting about our trips. After returning to the grind, only 33% of travelers return to share a travel-related review on a site, restaurant, or experience they had while on the road.
There’s a huge opportunity here for travel businesses or those with heavy tourist traffic to collect customer information and follow up down the line. A boost in reviews can easily spell additional clients and increased revenue.
43. 84% of people trust online health reviews as much as a personal recommendation (Inc)
Word of mouth has primarily been the go-to for health-related services and information, but the trend appears to be changing. 84% of people now trust online health reviews just as much as a recommendation from a family member or colleague. This means people are just as willing to choose a doctor from internet listings as call up someone they trust for a suggestion.
Considering the impact of review ratings, businesses in the health industry would be wise to invest in tools designed to improve the overall customer experience.
44. 77% of patients use online reviews as the very first step in finding a doctor (WebsiteBuilder)
After trying to self-diagnose, people are now turning to online reviews as the first step in locating a doctor. Before checking with friends and family, 77% of people jump online to gather information about who has the highest marks in the area.
As we’ve learned earlier, individuals are especially cautious of any business below a 4-star rating. Whether you’re a clinical manager or a doctor, it’s imperative to give patients a reason to say good things about your practice.
45. 81% of females would not visit a restaurant with cleanliness issues in reviews (WebsiteBuilder)
Some say cleanliness is next to godliness, and female review seekers tend to agree. No matter your overall rating, 81% of women would avoid visiting a restaurant if your online reviews mention cleanliness issues.
One can only speculate how dirty a restaurant must be to deter potential customers. A single bad review may be enough for some, but more likely these female diners balk at patterns in reviews from multiple sources. It’s worth noting that these individuals won’t even bother entering your restaurant to see if the claims are actually valid.
46. 76% of individuals research a company online before considering a job opportunity (WebsiteBuilder)
Your online rating speaks to more than just potential customers. Over three-quarters of job seekers will go online and read about your business before applying. Without a doubt, this research will include customer experiences and what current and past employees have to say about your work environment.
Online review sites make it easy for anyone to voice their opinion, good or bad, about a job at your company. Since these go-getters are likely the people you want to hire, it’s important to ensure those reviews accurately reflect conditions at your company.
47. 60% of job seekers would not apply to a company with a one-star rating (WebsiteBuilder)
In line with the previous statistic, 60% of those looking for employment won’t even bother applying to a company with a one-star rating. Having bad review scores can affect your bottom line and your ability to keep or hire new staff to keep your business running.
48. Approximately 99% of restaurants are hidden when Yelp users sort by “Highest Rated” or “Most Reviewed” (WebsiteBuilder)
Yelp is one of the most highly used review sites on the web. With so many reviews, people often filter searches to hone in on precisely what they’re looking for. Unfortunately for a majority of businesses, using the “Highest Rated” or “Most Reviewed” filters hides over 99% of available options.
In a sea of restaurants, it’s a constant battle to stay high enough to be one of the lucky few. Even if you live in a small town, customers gravitate toward restaurants at the top of Yelp’s list and tend to ignore those down below.
49. 57% of consumers using social media in stores are reading online reviews (WebsiteBuilder)
Those customers wandering around your store with their phones out may not be giving you the cold shoulder. Approximately 57% of consumers on social media in-store are actually reading online reviews. They’re checking out what others have to say about your business and are interested in hearing about which products or services are creating the biggest buzz.
50. It takes 12 positive reviews to cancel out the nasty side effects of just one negative review (Online Reputation Management)
We don’t always deserve those negative reviews, but they are inevitable. The damage from just one can be long-lasting, depending on how quickly your business can settle the score. It takes 12 positive reviews to cancel out the impact of that one-star punch in the gut.
While your rating may recover quickly, customers want to see enough positive reviews to know you’ve addressed the problem at hand. Even if it was just a bad day, you need to show customers it’s a non-issue to restore trust. This means reading all your reviews, positive and negative, to hear the voice of your customers.
Promoting opportunities for clients to review your business will help those positive remarks to come in that much faster.
51. TripAdvisor had 26 million reviews submitted in 2020 alone (TripAdvisor)
In case you still doubt the power of online feedback, consider that TripAdvisor received 26 million reviews in the near 2020 alone. With many places in a complete shutdown, people weren’t even traveling that much then! Consumers are reading and writing reviews more than ever, and the role this plays in your bottom line is huge.
52. Accommodation reviews average 688 characters in length (TripAdvisor)
Travelers really go all out when it comes to the places they stay. The average accommodation review is a thorough 688 characters in length.
In truth, this number comes from TripAdvisor’s commitment to excellence. 100% of the site’s reviews must be in long form with a snippet and rating to meet high-quality standards.
53. Businesses replying to reviews at least 25% of the time have an average of 35% more revenue (Womply)
It really does pay to read and respond to reviews customers leave on the internet. Replying to even a quarter of the reviews you receive across various sites brings in on average 35% more revenue.
The moment consumers see you’re engaged, they become much more willing to spend time on your site or physical location. Of course, the way you present yourself speaks volumes about how would-be customers perceive your store.
54. 72% of consumers will take action only after reading a positive review (Invesp)
An overwhelming majority of consumers won’t give you the time of day until they’ve read a positive review about your business. While this may not seem like too challenging a feat, those individuals need to find reviews for your store among an ever-increasing pool of assessments on similar companies.
The more opportunities you provide clients to review you, the more positive findings exist for others to locate. Frequent reviews will also help keep you in the spotlight on all the big review sites.
55. A one-star increase on Yelp leads to a 5-9% boost in revenue on average (Invesp)
If your company’s star rating isn’t where you want it to be, take action to give that score a boost. Moving up one star on Yelp leads to revenue increases averaging 5%to 9%.
The best ways to improve your score are by addressing the most common customer concerns that bring in lower-than-ideal reviews. At the same time, stay connected with customers and encourage them to leave positive but honest feedback.
56. Star rating is the most important review factor (Brightlocal)
Your overall star rating still leads the way as the most important factor potential customers use in making judgments about your business. With the rise of fake reviews, legitimacy comes in as a close second. Rounding out the top three is how recent the reviews for your company are.
57. 73% of consumers say written reviews make more of an impression than star/number ratings (FanandFuel)
Customers still look at star ratings first when deciding which businesses to consider. Once you’ve passed that test, shoppers look to the written word for the final say.
What other customers have to say about your store resonates the loudest in the minds of most consumers. In fact, 73% feel that written reviews make more of an impression than your star rating.
58. 94% of consumers say a bad review has convinced them to avoid a business (Reviewtrackers)
Nearly all consumers have come across at least one review so bad that they decided to avoid the business entirely. Whether the review was right on the nose or completely from the left field, the effect can still be the same.
You don’t have to remain silent in the matter. As long as you remain tactful, you can (and should) address negative reviews with proof against the claim or a plan for resolving your issues.
59. Customers who have a bad experience are twice to three times more likely to write an angry review than customers who had a great experience are to post a happy review (Online Reputation Management)
We all have those days where one bad experience just sours all the good we experience before or after. When upset, we also tend to be looser with our tongues or fingers in the case of a scathing review. As a result, customers are doubly likely to write a bad review over a poor encounter than those having an amazing time.
For business owners, you need to go above and beyond to flesh out positive reviews from shoppers after these types of experiences. Not only will the positives help cancel out that one bad review, but customers also look for this exact type of feedback when deciding where to shop.
60. The Federal Trade Commission cited more than 700 businesses for deceptive endorsements in 2021 (FTC)
The FTC is as tired of fake reviews as we are and are cracking down on companies with detective advertising. Over 700 businesses last year alone received citations for misrepresenting an endorser in some way, shape, or form. The list includes many well-known companies now under careful watch and major financial penalties should they attempt to deceive customers again.
Bottom Line
Whether you’re a fan of online reviews or not, there’s no getting away from the impact they have on your business. Positive reviews have the power to bring in new customers and additional sales, whereas negative reviews can sink a business in no time flat.
As a business owner, it’s imperative to know what people are saying about your company. You can discover problems you didn’t know existed and show the voice of your customers matters. Employing methods to promote review generation from your shoppers is key for boosting ratings and staying ahead of the competition.
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