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The best credit cards for SMBs (hello, points!)

May 25, 2022

As the U.S. dollar and euro get closer and closer to parity, we gotta ask — who else is booking flights to Barcelona?

In this week’s edition:

  • Finding the best credit cards for SMB owners.
  • Shifting your returns and exchanges policy.
  • Building a more equitable workplace.
  • Taking a cue (or two) from Warren Buffett’s favorite SMB.


What’s the best credit card for SMB owners?

A hand holding four credit cards that offer different benefits.

Let’s talk about money.
More specifically, plastic. Chances are, you have a credit card or two sitting in your wallet for your day-to-day purchases. But did you know that for business owners, it’s just as important to have business credit cards?

Much like the process for building your personal credit, you use business credit cards for your business’s credit. Good credit history will boost your SMB’s credibility and reliability in the eyes of other credit card companies, banks, and investors (which will make it easier for you to get loans and lower interest rates).

And then there are the benefits.
Much like your personal credit cards, business cards come with different benefits — like cash back or travel points (just in time for those summer vacation plans).

Where you swipe your card can add even more to your benefits. For example, some cards will give you more points at the gas pump, while others provide incentives for making purchases with their corporate partners (think Amazon, Peloton, or even Apple).

So, which is the best one for your business?
First, you need to consider where you and your business are financially. Because if you’re the business owner, most credit card companies will be looking at your personal credit score to determine your eligibility for your first business credit card.

Then, you’ll want to think about where your business spends the most money and where you can make the best use of your benefits.

There are more than a few business cards out there, and you may be wondering where to start. That’s where we come in — with a chart comparing some of the best cards available for small business owners right now.


Should your SMB charge for returns and cancellations?

The big kids are doing it.
Recently, fashion retailer Zara started charging customers who return orders online. More specifically, the company takes £1.95 (approximately $2.44) from the cost of the refund when online orders are sent back. However, these items can still be returned in-store for free.

Why the change?
Online shopping boomed during the pandemic, but with the increase in online orders came an increase in returns. And the costs of covering postal returns can add up (fashion brand Boohoo said returns were one of the reasons for their dip in annual profits).

A woman's hand grabbing a full wallet after being offered a single dollar.

Plus, offering the option for free returns in-store may increase the foot traffic at a company’s physical locations. Zara isn’t the first to make this move — fellow fashion giant Uniqlo also charges for online returns. And retail analysts believe that other stores will make similar changes to their return policies.

The question is… should your SMB do the same?
Maybe. If you have a product business, you want to take advantage of the online shopping boom, if you haven’t already. But shipping itself can already be pricey — factoring in potential returns would certainly slap on additional fees.

And it’s a similar experience if you operate in a service industry. Let’s take roofing, for example. Who covers the cost of underlayments, shingles, and flashing you’ve purchased if a customer ends up canceling at the last minute? (Hint: find a mirror.)

If you do decide to institute return or cancellation fees, communicate the change to your customers (no one likes to be hit with surprise charges). Also, give your customers some leeway — you can offer free in-store returns like Zara. Or if you provide a specific service, have a free cancellation period, or offer to charge for materials only in case of cancellations.


Building an equitable workplace with cultural intelligence

A man pushing a box of books toward a human head-shaped bookcase.

Back up… what’s cultural intelligence?
Cultural intelligence (AKA, CQ), is an individual’s ability to relate to and interact with peers from any and every identity and culture. Globalization and remote work are bringing diverse teams of employees together, making cultural intelligence in the workplace more important than ever.

Also, over 67% of job seekers list diversity as an important factor when hunting for their ideal workplace. So, it makes sense to put diversity initiatives at the forefront of your company. One way to do that: cultural intelligence and inclusion training.

Tell me more.
Cultural intelligence training equips employees with the tools and techniques needed to engage with and work alongside a multicultural team. And simply implementing a boilerplate diversity, equity, and inclusion policy won’t cut it. You’ll want to consider using hands-on and practical learning opportunities during this process that give your team real-world scenarios and simulations that allow them to practice the skills they’re learning. A few ways to do that:

  • Create discussion forums and allow trainees to learn from and respond to one another.
  • Assign groups of three to five trainees, and each week, have a different group lead the training.
  • Incorporate quizzes, tests, and other assessments that include a variety of question types (multiple-choice, written response, etc.).
  • Bring on an expert or two and host a live question and answer session (and make the recording available after).
  • Require a group project and have them present their findings to all of the trainees.

👉 Learn more about CQ training.


Why Warren Buffett bought an SMB for 3x its value

Why would he do that?
Warren Buffett, AKA the investor GOAT, knows what’s up. His investments in successful companies — from Coca-Cola and Geico to Apple — have made him the fifth richest person in the world with a net worth of $118B.

A man saying, "I am just green with jealous rage right now."

And believe it or not, he says that his favorite investment of all time was his purchase of a small business nearly 50 years ago: See’s Candies.

What got his attention:
See’s Candies built a brand around quality, using the finest ingredients: California almonds, Ozarkian walnuts, and African chocolate. Even when ingredients were scarce during the Great Depression and WWII, See’s stayed true to their principles (even when it meant fewer sales).

So by the time they were looking to sell, Warren Buffett saw much more than their paper value — he saw the value of their intangibles. Because their loyalty to the brand and customers far exceeded their numbers on paper.

How it helped him scale:
After Warren Buffett bought See’s Candies in 1972 for $25M, he made plans for slow growth.

The product was so good that customers gladly tolerated the 10% price hikes each year. “Modest physical growth,” he wrote, had led to “immodest financial growth.” Clearly it worked — today, the company is worth well over $2B.

What can we learn from him?
It may be tempting to cut corners — like hiring the not-so-perfect person because you just need things to move forward, or getting cheap (okay, sorry — frugal) with products and services because of oh-so prevalent shortages and inflation.

But before doing this, consider the long-term effects this could have on your brand image and bottom line. We have to remember that most people don’t just want a good bargain — they want a great business with top-of-the-line products. And that’s ultimately what attracts interested investors and sticky customers.

👉 Hear more thoughts from Warren Buffett.


This week’s highlight reel

  • Who’s doing The Humpty Dance? Calling Wednesday out to the dance floor. The WSJ recently reported that everyone’s favorite hump day is also the chosen return-to-office day for employees on a hybrid work model. Middle children everywhere: you’ve been vindicated.
  • Equal pay, today. After years of pressure from the World Cup-champion women’s league, the U.S. Soccer Federation recently reached a landmark agreement aligning the men’s and women’s team pay. The agreement also extends to game bonuses and World Cup prize money.
  • “Excuse me.” Did you know that enteric fermentation (AKA, cow burps) are the largest driver of emissions from livestock? To cut down on this planet-harming gas, Ben & Jerry’s plans to feed dairy cows rumen modifiers like red seaweed, which could cut the methane emissions from the animals’ burps by 82%. Udder-ly ingenious. 
  • He was a really big ‘dill.’ Robert Vlasic, of the Vlasic pickle empire, passed away this month at 96. While his pickles stole the show, he was also a master at scaling small business, expanding his line to 96 kinds of pickles, peppers, relishes, and sauerkrauts, before being taken over by Conagra Brands. Show some love to the gherkins sitting in the back of your pantry today.


Here’s what else is on The Manual’s mind

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