Practically everybody loves credit card reward and rebate programs—they feel like “free gifts” and “free money.” Sometimes, as a business owner, you may use the rewards to treat yourself. And given the hard work that goes into entrepreneurship, that’s perfectly reasonable. But small and midsize enterprises (SMEs) may also want to think about rewards as business development capital that can help make your company more competitive.
Plan to Maximize Benefits and Minimize Problems
Today, SMEs can choose from an exceptionally wide array of business credit and charge cards, supported by almost equally diverse rewards and cash back programs. It makes sense to think carefully about which cards fit your business development and spending patterns most closely. Business owners should consider where their company allocates most of its budget and then choose cards that offer the most rewards in those categories.
Plan to set aside cash back for the business development purpose your business needs, and track its growth until you’re ready to fund the purchase.
Also consider establishing clear policies on who gets to “spend” credit card rewards. While rewards points aren’t “property” you can “own,” the person named on the card is usually entitled to spend them. Be sure to clearly communicate your rules and expectations to employees.
Keep in mind that some business card rewards never expire as long as you keep the card. Make sure to know the rules, and use rewards before you lose them—whether due to expiration or cancelling a card you no longer need.
Plan Specific Business Development Investments
Is there a still-undeveloped product in your business development plan? Is there a subscription service (for example, market research reports or cloud computing applications) that could help grow your business? Or perhaps there’s an office technology upgrade you’ve delayed too long, such as replacing computers or software that no longer receive important security fixes?
Plan to set aside cash back for the business development purpose your business needs, and track its growth until you’re ready to fund the purchase. If your business development agenda requires investing in office supplies or cloud services, note that certain business cards may offer rewards.
Use Rewards to Help Promote Employee Loyalty and Retention
Today, SMEs must battle to find and retain great employees. You can strategically use rewards points to show employee appreciation. Even if your business controls all the points its cards earn, choosing to spend them on your people may help drive your business development agenda.
As an added bonus, you may get more for your rewards by booking trips with an airline, hotel chain or hospitality provider linked with the rewards program.
Alternatively, you might consider using rewards to host employee events. Or, use them to purchase work-related items that employees would otherwise have to purchase on their own. You can also consider rewarding employees with concert tickets, or first-class upgrades on essential business travel—or spreading the benefits around with gift cards to shops and restaurants.
You can transform business card benefits into a competitive advantage by carefully maximizing your points or cash back, and deliberately spending them on business development plans or employee retention.
Read more articles on growth opportunities.
The information contained in this article is for generalized informational and educational purposes only and is not designed to substitute for, or replace, a professional opinion about any particular business or situation or judgment about the risks or appropriateness of any financial or business strategy or approach for any specific business or situation. THIS ARTICLE IS NOT A SUBSTITUTE FOR PROFESSIONAL ADVICE. The views and opinions expressed in authored articles on American Express represent the opinion of their author and do not necessarily represent the views, opinions and/or judgments of American Express Company or any of its affiliates, subsidiaries or divisions (including, without limitation, American Express Business Trends & Insights). American Express makes no representation as to, and is not responsible for, the accuracy, timeliness, completeness or reliability of any opinion, advice or statement made in this article.
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