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Square: A Platform That Simplifies The Way You Accept Payments

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The way people pay has changed. Now, more than ever, people expect to use their phones to buy things online. It’s time for small business owners to upgrade their systems and accept payments on the go with Square. 

Square is a mobile payment system that makes it easy for anyone to take credit card payments anywhere they go—all you need is an Internet connection and a phone. Square gives you all the tools you need to take payments at home or on the go. 

Source: Square

Square (formerly known as SquareUp) was founded in 2009 by Jack Dorsey, co-founder of Twitter and founder of Square, to make commerce easy for everyone. From setting up your first account, taking your first credit card payment, generating invoices free—Square has got it all wrapped up for you! 

What is Square?

Source: Square

Square is a company that was initially launched in 2009. Now celebrating its thirteenth birthday, the company was one of the first to introduce mobile payments to the world. In 2009, swipe-based mobile payment processing systems belonged to science fiction – Square showed merchants worldwide a more accessible way than ever before!

The primary appeal that Square offers is an affordable fee structure for small businesses or startups whose turnover may vary drastically from one month to the next. One can’t help but like this affordable, user-friendly package with many features worth mentioning!

Today, Square’s suite of offerings has grown at an astronomical level. They are hands down one of our favorite processors for food truck processors or any other type of business running on location! Some capabilities include: 

  • Square POS system 
  • Analytics and reporting
  • eCommerce
  • Payroll
  • Square recurring payments
  • Invoices
  • Inventory management
  • Customer management
  • Virtual terminals
  • Multiple apps

Payment processing might not be the best solution for all types of businesses, but it has a lot to offer if you’re looking for something predictable and reliable.

Square: Pros and cons

Square is a payment system that allows you to accept credit card and debit card payments, along with cash and check transactions. You can use the Square system in person or for online sales. 

It has become popular among individuals and small businesses because it offers a secure way to accept payments without the need for expensive equipment, such as a credit card terminal.

But what are the pros and cons of using this method? Read on to find out!

Source: istock

Pros

Square offers several benefits to individuals and small businesses, including the following:

  • Predictable flat-rate pricing
  • Suitable for low-volume merchants
  • Enables omnichannel selling
  • No monthly fees
  • Impressive feature sets
  • Affordable chip card readers
  • Free tools for selling online
  • All-in-one payment 
  • Available to Canadian merchants

Cons

There are many disadvantages of using Square, such as:

  • Not suitable for big companies with huge transactions
  • Not ideal for high-risk industries
  • High fees for large businesses
  • The account can freeze due to irregular activity
  • Not cost-effective for high-volume transactions
  • No phone support available

Square has become a popular payment option among individuals and small businesses because it offers a secure way to collect payments without the need for expensive equipment, such as a credit card terminal. 

Some people may think Square is limited in its capabilities compared to other payment systems or credit card terminals; however, this is not true. Square provides all the functionality of any payment terminal you can purchase at your local office supply store (minus the cost). It’s easy to use and stores data securely in the cloud.

The Square POS System

Source: istock

The Square POS system is a free and easy-to-use point-of-sale solution with features unlike any other. It’s not as in-depth or intricate, but it’s perfect for small businesses and people just starting. The best part? They offer solutions explicitly tailored to specific companies like restaurants or Retail! 

Square offers you the ability to:

  • It processes checks and cash
  • Set up gift cards
  • Swipe cards without internet 
  • Create digital and printed receipts
  • Set up recurring payments
  • Send customer invoices
  • Handle your Square payment fees
  • Manage refunds
  • Access tax information
  • Handle all tips and discounts

The benefits of the Square payment system are many: 

  • Square’s free mobile POS app comes with many features, which means it can compete easily against some of its more expensive competitors on the market. For example, you can accept all major credit cards from virtually anywhere in the world through them. 
  • You don’t have to worry about either contactless or traditional chip and pin transactions as well; both work seamlessly with this tool! 
  • Your funds will be transferred straight to your bank account within 24 hours at most (or two business days after all payments).
  • Another great benefit is full PCI compliance – one thing we care tremendously about nowadays is making sure people’s sensitive data stays private and secure, so it feels like having a payment system that’s PCI compliant should be worth its weight. In gold!

The Best Features of Square POS include:

Card on file: Keeping your shopper’s card information stored in Square is a great way to make repeat purchases easier for them. Card on file also works with Square invoices and other apps, but it costs extra.

Offline payments mode: Now, you don’t ever have to worry about your internet connection suddenly stopping and preventing your business from running. The Square bundle can also operate offline without any issues!

Virtual terminal: You can enter credit card information for your business to be processed by the server if you are running a virtual terminal. This free service is only charged upon each transaction and does not require additional fees.

Installment payment system: Square now offers a new installment payment option. You can provide your customers the opportunity to pay for products over time, with Square Capital assuming the risk. You’ll still be paid upfront, but your customer will only owe you what they can afford over time instead of paying in total upfront as they may have before.

Invoices: Square offers professional-looking invoices for its clients. Use templates and built-in tools to ask for Square payments via a professionally designed invoice. The company also provides designs that support purchase orders or ongoing contracts, depending on what you need from the service of your choice.

Square Card: Square Card is a Mastercard debit card with an excellent feature. It ensures that you can easily access all your Square funds when you need to make payments on behalf of the business, perfect for keeping your personal and business expenses separate.

How to Use Square?

One of the most important things you’ll need to consider when investing in any payments system is how easy it is to use. If you struggle with your POS setup every day, you and your employees won’t get the best out of it.

Source: Square

Getting started with Square payment may seem like a daunting process at first, but that’s because there are so many features! All you need to do to get started is register for Square on their website- which requires just a few details, including what your company does, an email address, and banking information (so they can pay commissions).

 To simplify transaction management, Square also provides a dashboard that serves as the hub for all payments, such as adding more locations where the company trades from or listing inventory too!. 

Listing inventory managed through this account means no more clunky spreadsheets or overstuffed filing cabinets – everything stays organized together in one place, easily searchable at all times!

Square is a super-clean and attractive tool. It helps you manage your inventory with one click. When clicked on a product, the pop-up window allows you to specify the quantity, size, discounts, and tax requirements for each item. There’s also a “Split” button that will enable customers to split bills between multiple people instantly! If you’re using an app on a tablet, it would be easy to enter their tip or sign their name by turning your screen towards them! 

The Square POS has plenty of guidance, so don’t worry about getting lost in any process steps today.

Square Software Apps

Square now has four POS mobile apps, each catering to merchants based on the type of business they run. Each one is for a specific niche with a basic free plan. However, three of Square’s advanced systems also have paid programs that provide more capabilities for larger businesses that need specialized features.

Source: Square

Square POS

Square Point of Sale is Square’s accessible and affordable payment processing app. It works best for quick-serve restaurants, cafes, service businesses that only need one staff calendar, and retailers with a moderate amount of inventory. The app runs on all (free) proprietary hardware and any supported Android or iOS device.

Square Appointments

Square Appointments is a POS system and online booking service that seamlessly sets up appointments, checks customers out, manages commissions, even sells merchandise. It’s free for one user with an additional 2.6% + $0.10 per Square Payments transactions fee on top of the cost- this varies depending on how many users you want to add (starting at $50/month).

Square for Retail

Square for Retail caters to businesses with complex and extensive inventories by providing multi-location stock management. You can sell online, in-person, or through an in-store pickup or delivery option – the app’s interface is designed for scanning and searching items, and Square offers retail-specific advanced reports. It runs on iPads using their free plan and subscriptions starting at $60/month in addition to the free program.

Square for Restaurants

Square offers a free plan that includes POS, team management, and customer support. The Paid programs of Square provide advanced POS and Kitchen Display Systems for menu management, floorplans, and automatic inventory alerts. 

You can manage all orders from the KDS to offer seamless pickup and delivery options to your customers. Reporting is geared towards restaurants with daypart reports, covers reports, employees report on comps voids, and kitchen performance reporting. 

Square’s Plus subscription is at $60/month/location or $40 per additional device with no extra cost per display screen of KDS software (available only on paid subscription).

Source: Square

Square: Hardware 

Square is a company that provides many different hardware options for its service. The software, however, is always free and can be downloaded from the Google Play Store or Apple App Store, with few exceptions. Square will also push out updates to their app store if available.

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Source: Square

Square Magstripe Reader

You get a free magstripe reader when you sign up for Square. The nice thing about the Magstripe Reader is that it comes with your card reader and does not cost any extra to use. If you want additional readers, they will only cost $10 each.

Square Reader for Contactless and Chip

Square’s newest contactless and chip-reader starts at $49. It accepts payments through the following methods: Apple Pay, Google Pay, and chip transactions. If you also need a charging dock for this device, it is available in Square’s starter pack for an additional $78.

Square Stand

Source: Square

Square Stand is the newest product by Square, which makes it possible to convert your iPad into a checkout station that you can use anywhere in your shop. It costs $169 or $16 per month for 12 months and comes bundled with both a Square Reader for magstripe cards and contactless payment methods like Apple Pay.

Square Register

Source:Square

Square Register is a sleek, high-end hardware solution for your business. It’s a piece of Android hardware designed to run Square Point of Sale and is customizable with the free version only of Square for Restaurants. The setup features a 13″ screen with an integrated payment system that supports magstripe, EMV, and NFC payments – but you’ll need to buy separate equipment (a receipt printer or cash drawer).

You can get the Square Register on its own or in one kit, which includes all necessary accessories: USB cash drawer ($329), wireless receipt printer ($329), case paper(5 rolls) ($79).

Square Terminal

Source: Square

Square Terminal is the perfect compromise if Square Register might be a bit too much for your needs. This small credit card terminal has a smartphone-sized screen and runs Square Point of Sale, with integrated card readers that can process magstripe cards, chip cards, or contactless payments, as well as a built-in printer. 

The battery of this terminal is designed for all-day use so that you can go wireless with it – or plugin and charge on the countertop.

Square Terminal costs $299, but you can finance the purchase for $27/month for twelve months. Transactions process at 2.6% + $0.10 means that there is some competitive pricing available here that might be helpful if you are running more than just one restaurant location (though this compatibility does not extend to Restaurants POS).

Square: Online Payments and Digital Ordering

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As the Square solution has evolved over the years, they’ve realized that it is not just about offline and in-person POS options. These days, Square wants to become every merchant’s one-stop solution whenever they need to manage transactions. This solution means creating an eCommerce and online shopping strategy alongside their POS and in-person payments services. 

Features of Square online payment include:  

  • Web Store hosting: Bring your domain or purchase a brand-new one through the Square site instead. This way, you will have an easy time designing your ultimate website with templates that are easy to use. You can even include Instagram integrations! All the POS system features come built into it too.
  • Payment Gateway: If you already have a website and it’s powered by BigCommerce, WooCommerce, Weebly, or Magento (or one of the other supported platforms), Square can integrate to process payments. Supported features vary for these integrations, so do your research if you want an easy-to-use platform that’s useful for in-person and online sales.
  • Square Online Checkout: The Square Online Checkout is a flexible way to accept payments from donors, shoppers, or clients without necessarily having an entire eCommerce site. This feature also includes an option for QR code scanning and zones in which you can break up your shop or pickup area into sections. You can add this payment button to any existing web page through links, texts, or posts on Instagram and Facebook that are shoppable. The Square Online Checkout will also allow customers to place an order and pay. At the same time, the team at the store is updated on where they should go with their items, either in-store delivery locally if needed by local couriers.
  • Customize your Dashboard: Square’s Dashboard is the central hub of its platform. We like that it lets users customize what information they see in their Dashboard by dragging and dropping different widgets. The Square Dashboard provides real-time sales data on your iOS device, but other people will need to access the Dashboard from a computer/laptop for full functionality. It’s worth noting that the Dashboard makes Square easy to use. You’ll find all you need here, as well as free versions of ancillary features and optional add-ons too.
  • Ecommerce marketing support: Square’s eCommerce marketing features provide many valuable tools and applications. For example, you can sell and accept Square gift cards on your site, send abandoned cart emails to get customers back into the checkout process, and integrate targeted Facebook ads for more visibility on social media networks. 

They also offer SEO support, among many others! Users can access discounted shipping rates and advanced analytics with this service provider.

Other Payment Processing Features With Square

Source: istock

Now that we’ve gone through a lot of information on Square payments, it might seem like we’re done here. However-we’re not! There’s still more to cover about what the Square can do.

Although there are many things you could consider when discussing this app, some of the most noteworthy features are:

  • Customer Database: Square allows you to save contact information, purchase data, and more with their customer database. The database can track customer behaviors, including sales, visits by new or returning customers, and visit frequency. 

These charts display activity over the period represented in these graphs; you can create segments using visitors’ frequency of return trips for email marketing purposes at no cost!

  • High-level Reporting: Square offers some of the best online reporting in any pay-as-you-go provider. You can generate reports by the hour, day, week, month, and year from your Square Dashboard, and multiple accounts are exportable as CSVs. 

The “Square for Retail” report includes detailed item categories or mobile staff sales.

  • Multi-store Management: Square Payments is an excellent service that allows you to manage multiple store locations from one account. You can also adjust inventories and prices or assign employees to specific stores depending on the day’s needs.
  • Gift Card Management: Square’s gift cards have a range of custom designs, templates, and pre-designed cards. There are no costly redemption fees to worry about, and it is easy for merchants to issue the Card online. 

Analytics ensure that you can track how often people use their gift cards while reporting tracks any balances remaining on unused or partially used ones.

  • Email Marketing: With Square’s eCommerce offering, you can use various customer engagement tools. Email marketing costs a monthly fee to automate your emails but lets you send regular campaigns and newsletters with the in-built Square services. 

You can also run social media campaigns that track information on your client database or speak to customers when they abandon their carts.

  • Customer Feedback: Customer feedback is one of the most valuable things a company can access. Square’s customer engagement tools can help you get valuable feedback from your customers. These tools allow businesses to prompt their customers for feedback, one of today’s most important things. 

You’ll be able to access details like purchase history and average spending with these helpful features!

  • Loyalty Programs: To improve connections with target audiences, Square spends a lot of time and effort keeping its rewards program ahead of the curve. There is a fully customizable Rewards Program for business which you can edit as needed. The copy and images used to sell these awards are editable too!
  • Payroll: Payroll takes care of employee PTO, sick leave and other benefits, and tax reporting. It also lets you pay contractors through Square’s platform with a monthly fee of $29/month plus $5/month per person born.

Square offers many features and tools that will make life easier for you and your customers. Square helps you accept credit card payments anywhere, anytime, and provides real-time insights into your business. 

Square has revolutionized the way people run their businesses, providing an easy and secure way to accept credit card payments on the go.

Square Fees and Rates

With so many new products and services, you can expect Square’s pricing to be a little complicated. However, the flat rate is consistent across all card types: Mastercard, Visa, Discover, American Express, JCB UnionPay – you’ll never pay more than the standard fee!

Source: Square

Basic Processing Rates & Fees

Here’s a breakdown of what you will pay depending on what Square Equipment you’re using.

  • Square POS (With Any Mobile Card Reader): 2.6% + $0.10 per swiped, dipped, or tapped transaction.
  • Square Register: 2.6% + $0.10 per swiped, dipped, or tapped transaction
  • Square Terminal: 2.6% + $0.10 per swiped, dipped, or tapped transaction.
  • Square For Retail POS: Free plan costs 2.6% + $0.10 and Plus plan costs 2.5% + $0.10 per swiped, dipped, or tapped transaction
  • Square For Restaurants POS:  2.6% + $0.10 per swiped, dipped or tapped transaction.
  • Square Appointments (Individual User): 2.6% + $0.10 per swiped, dipped, or tapped transaction.
  • Square Appointments (For Teams): 2.5% + $0.10 per swiped, dipped, or tapped transaction.
  • Keyed-In & Card-On-File Transactions: 3.5% + $0.15
  • eCommerce Transactions & Invoices: 2.9% + $0.30
  • Square Online Checkout: 2.9% + $0.30
  • Other Fees: There are no additional chargeback fees. Square even offers a chargeback protection program, which will cover the costs of eligible chargebacks, up to $250 per month, even if you don’t win the claim.

Processing Limits

The smaller merchants who get started with a Square payment system don’t have to worry about processing payments- most of the time. 

Square gives its merchant a starting ceiling of around $50,000, which can vary depending on whether you know them well or not. However, a few complaints suggest that you might need to keep transactions below $3,000 if you want to avoid issues (though there are also reviews from happy customers who take in more than $100k). 

One of the biggest problems when using Square is that they sometimes freeze out your account without warning, which can be frustrating if it happens during peak hours!

Monthly Services

  • Square For Retail: Free plan is available; Square for Retail Plus is $60/month per location
  • Square For Restaurants: Free plan available; Plus plan available for $60/month per location (additional POS device is $40/month)
  • Square Appointments: Free for individuals, $50/month for two to five staff, $90/month for six to 10 staff
  • Team Management: Free for the basic plan, $35/month per location for Team Plus
  • Payroll: $29/month + $5/month per employee or contractor paid
  • Loyalty: $45/month for zero to 500 visits; $75/month for 501-1,500 visits; $105/month for 1,501-10,000 visits
  • Email Marketing: $15/month for zero to 500 contacts; $25/month for 501-1,000 contacts; $35/month for 1,001-2,000 contacts
  • Gift Cards: Gift card pricing varies with the amount your purchase—batches of 20 cost $2/per card. Quick Cards purchased in packs of 75 and up cost $1.20/per Card, with prices decreasing as you order more. Custom-designed cards of 75 or more cost $1.75 per Card, with prices falling as you order more.

There are many benefits to Squareup, including that it is free, easy to set up and use, and you can access it from various devices. However, there is a monthly fee for using Squareup, and it cannot be easy to track revenue utilizing this payment option.

Conclusion

Square’s payment processing is an excellent deal, and it’s something that no one else in the industry can offer you. Whether you’re just dabbling in sales or if your success depends on efficiency, Square should be a helpful tool to use. 

If we consider value, Square is tough to beat: their prices for credit card processing are competitive with pay-as-you-go options and sometimes beats interchange-plus plans! 

With features such as inventory management (free!), virtual terminal accesses free of charge with full functionalities, advanced reporting tools, etc., there are more features than any other provider who doesn’t require monthly payments.

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Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.

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Case Study

Spotify Business Model: Ultimate Guide For Success In 2022

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Spotify Business Model

Before dividing into the Spotify Business Model, let’s learn more about Spotify. Spotify is a music streaming service that offers users access to an extensive catalog of songs and artists. It uses a freemium revenue model, which gives limited ad-supported free service for those who only want to listen and an unlimited premium subscription fee for those who prefer not interruptions.

Spotify’s music algorithms and its community of users play a large role in maintaining the premium experience. Spotify’s premium subscriber base has grown over the years.

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From the start, Spotify was a legal alternative to pirated music and paid song purchases on iTunes. It pays significant portions of its revenue in the form of royalties to labels. Since its launch in 2006, it has already paid over $10 billion in royalties.

The company shifted its focus from downloads to streaming and disrupted Apple iTunes. Spotify made a profit for the first time in company history in 2019.

Spotify’s mission

The mission of Spotify is to unlock the potential of human creativity—by providing individuals with the opportunity to share their art and make money,  and billions of fans the opportunity to enjoy the same and be inspired by it.

Spotify has transformed music listening forever since it was launched in Sweden in 2008. Their features include discovering new music, managing and sharing over 70m tracks for free, or upgrading to Spotify Premium to access exclusive features, including offline mode, improved sound quality, and an ad-free music listening experience. 

Spotify is currently the most popular global audio streaming service having 365m users, comprising 165m subscribers spread across 178 markets.

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Key Partners in the Spotify Business model

Key Partners refer to the external companies, individuals, or suppliers that provide assistance in carrying out the key activities. The partnership primarily helps to reduce risks and acquire additional resources.

  • Record labels
  • Rights holders
  • Independent artists
  • Internet services products
  • Third-party integrations
  • Cloud providers
  • Mergers and Acquisitions

Key Activities in the Spotify Business model

What are the primary activities of Spotify?

The key activities focus on achieving value proposition, customer segments, maintaining customer relationships, and revenue generation.

  • Website Maintaining
  • Development of the app on various platforms.
  • Working on the roadmap for the product.
  • Management of the huge library of songs and podcasts they possess.
  • Marketing their product and what they offer.
  • Expansion of their user base.
  • Negotiations for new contracts.
  • Content mergers and acquisitions.

Key Resources in the Spotify Business model

What has turned Spotify into a hit?

Key resources are the main inputs required to carry out the key activities to create the value proposition.

  • Over 1600 employees.
  • Brand awareness has been created.
  • Innovative updates and techniques.
  • Progressive culture of the company.
  • Huge variety of music collections.
  • The various number of contracts they have.
  • Features offered to their users.
  • 100 million monthly active users.
  • 50 million paid subscriptions.
  • Open Music Model it adopts.
  • Protection of rights.
  • Customized content is provided to its users.

Value Propositions in the Spotify Business model

How is Spotify unique?

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This is the building block of any business, representing your uniqueness or problem-solving capability for one or multiple customer segments.

  • Free music; anywhere anytime.
  • A vast majority of songs.
  • User experience.
  • Freedom to create Playlists 
  • Playlists and selected choices of liked music
  • Several forms of advertisements.

Customer Relationships in the Spotify Business model

How does Spotify maintain relationships with its users?

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Establishing a good relationship with the different customer segments is vital in any business. It will help maintain the reputation and acquire new customers by word of mouth.

  • Streaming is always online and available 24×7.
  • Special customized Spotify playlists to your liking.
  • User-friendliness and automation of the app.
  • The HD sound quality of the music.
  • Third-party APIs.
  • Spotify community.
  • The Spotify fanbase

Channels in the Spotify Business model

How does Spotify connect with its users?

Channels help in reaching a wider audience and raising brand awareness via communication. Channels are like the nerves of a business.

  • The website: Spotify.com
  • App: Available on web and mobile
  • Social media platforms
  • Available on the majority of the operating systems.
  • Can be linked from one system to the another
  • Can be linked to external equipment like speakers, smartwatches, and tabs.
  • Can be accessed on TV as well.
  • Spotify Family enables an entire family to use Spotify under one payment.
  • The continuously growing community of Spotify.
  • Notifications of events you might like around you.
  • Billboards around major cities in the world.

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Customer Segments in the Spotify Business model

What are the different types of customers Spotify targets?

Customer segments help a business understand its important customers and the preferences of the customers of a particular section and then work on the same to improve customer satisfaction.

  • People are not willing to pay for services
  • People want to avoid the hassle of downloading music from different websites
  • Music Lovers of all kinds.
  • People are studying or working.
  • Advertisers (Since the attention the site gets is huge.)
  • Developers want to showcase themselves.
  • People are interested in showcasing their playlists.

Cost Structures in the Spotify Business model

What type of costs are incurred by Spotify?

Focusing on the cost structure helps a business to understand the various costs for evaluating the same to deliver the value proposition, maintain customer relationships, and earn more revenue.

  • Office buildings
  • Technical and Financial team
  • Marketing and Advertising team
  • IT operations
  • Salaries of other staff
  • Licensing fees
  • Copyrights
  • Product roadmap
  • Legal

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Revenue Stream in the Spotify Business model

How does Spotify make money?

Revenue streams are the various channels that generate revenue for a business. It helps in understanding if the value proposition is helping you to earn money or not.

  • Spotify uses a freemium business model 
  • Revenue is earned through paid subscriptions of users wanting to upgrade to a premium version.
  • Advertisers who pay Spotify for hosting their ads.
  • Promotion of TV shows or movies.

Conclusion

Spotify is leading the future of the music streaming industry. Recent announcements have suggested that it might be going public and listing its shares on the New York Stock Exchange

But Spotify fails to make much profit from its operations. This is due to having to pay for licensing when it negotiates with record labels, which limits its growth.

However, Spotify is the leading music streaming service. It has a lead of 30 million users over Apple Music, which only has 30 million paying customers. The company’s other competitors are not even close to it in regards to total subscribers.

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Case Study

Netflix Business Model: Ultimate Guide For Success In 2022

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Netflix Business Model

Netflix, Inc. is one of the most successful entertainment media companies. So it’s obvious to have some curiosity about the Netflix Business Model. Initially, the company began providing movies and TV in 1998 by sending physical copies to customers via standard shipping.

Netflix’s journey from physical copies of handouts to allowing people to stream their favorite content has been a success story. The company has managed to transform its business model over time through changes in technology.

Netflix has evolved its business structure by using streaming technologies to offer high-quality TV and movies. The application offers its viewers the possibility to stream, watch and even create an account.

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1. Netflix’s Key Partners

A key partner or partners help a company grow by bringing in more resources, reaching more customers, increasing overall efficiency, and adding value to the organization. Following are the Key Partnerships in the Netflix Business Model:

  • It has partnered with more than 35+ media companies. In addition, Netflix now offers millions of different movies that subscribers can easily choose from.
  • Netflix’s primary goal is to attract “gamer customers.” Netflix has formed alliances with smart TV manufacturers, LG and Sony. Netflix has also teamed up with other brands from different industries, such as gaming, to offer its customers a subscription service for video games.
  • Netflix has partnered with Dish and other TV network companies since they converted their mail-in system into a streaming service. In the transition, they partnered with Apple, Android, and Microsoft. Netflix has even partnered with Google and Amazon to join networks that are Big Data providers like them.
  • Recently, Netflix partnered with Samsung to integrate its streaming service on Galaxy smartphones. In return, Samsung users get Netflix’s original shows and special bonus content in addition to the standard video selection package. To further expand its reach into West Africa, Netflix has partnered with Nigerian filmmaker Mo Abudu, who owns Ebony Life TV. This partnership will allow Netflix to produce new content targeted at African viewers from Nigeria, Ghana, and Kenya.
  • Netflix has partnered with six Japanese animators – CLAMP, The Kindaichi Case Files, Mobile Suit Gundam, Goth, Mardock Scramble, and Thermae Romae – to produce original content.

2. Netflix’s value propositions

The value proposition is what an organization provides to its customers, something that is unique or something that solves a problem faced by the customers. Netflix Business Model strategically employs methods to provide the best customer experience by offering value propositions.

  • 24×7 streaming without ads
  • High-definition shows and movies
  • Convenient streaming of content at any location
  • Unlimited access to TV series and movies
  • Exclusive access to Netflix’s original movies and shows 30-day free trial or 1-month free services for new signups
  • Freedom to cancel the contract at any time
  • Locally produced content and culturally relevant content
  • New options through algorithmic recommendations
  • Flexibility to enable or disable notifications and suggestions
  • User profiles allow users to personalize their accounts and preferences.
  • Different profiles for children
  • Option to share accounts
  • The company has made it its mission to solve many people’s problems with four simple words – “Watch Anywhere. Cancel Anytime.”

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3. Netflix’s Key Activities

The activities that take place in the company on regular intervals or daily basis that make the organization what it is are the key activities in a business model. The key activities in the Netflix Business Model include:

  • Hiring and retaining software and technology experts.
  • Maintaining and expanding the website, mobile apps, and TV apps.
  • Producing, acquiring, and licensing original content to expand video libraries.
  • Develop a pricing strategy and subscription model to make it affordable and attract new customers.
  • Developing a roadmap to penetrate the new market.
  • Great recommendations for users to retain their current customer base.
  • Build partnerships with studios and content production houses.
  • Negotiating contracts with studios, content providers, and film production companies.
  • Compliance with laws depending on state or region/country.
  • Compliance with censorship
  • Supporting disadvantaged communities or other ideological issues important to clients.
  • Development of local original content.

4. Netflix’s Customer Segments

Netflix offers a wide range of movies and shows ( TV ) to watch. The content is also tailored to everyone’s tastes, and most people can agree that they want to watch it.

Netflix offers content for both children and adults, but Netflix strives to promote family-friendly, educational, and entertaining content to reach the interests of families.

Therefore Netflix Business Model has a varied customer segment.

5. Netflix’s Customer Relationships

In a market, a customer is the king and given so many options; one thing that sets you apart is your relationship with your customers. Customer relationships are given vital importance in the Netflix Business Model.

  • The self-service experience is simple.
  • The platform was originally designed to ensure that it was simple and easy to use.
  • The website developers have made sure that the elements and themes that serve the user experience are interconnected and allow for self-installation.
  • Highly rated customer experience.
  • Customer service is provided through the website portal and email inquiries.
  • You can reach a representative directly via phone and live chat.
  • Online live chat services.
  • Inquiries regarding discounts and other special offers are available to eligible users.
  • Social media channels.
  • Post ads offer, and special promotions through social media channels and other appropriate platforms to ensure high appeal to customers and new users.
  • Social media is also used to inform and update people who work or are familiar with the Netflix platform, including Facebook, LinkedIn, Instagram, Twitter, Snapchat, etc.
  • Netflix E-Gift Cards.

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6. Netflix’s Key Resources

Many things are required to run a business, and some cannot be excluded. These resources help you create your product or render your service. They are the critical resources in your business model. 

Following are the key resources in the Netflix business model:

  • Software developers are the biggest part of Netflix Business Model resources who constantly work on innovations.
  • Managers who are responsible for developing and improving a better customer experience
  • Algorithm for the recommendation system – artificial intelligence and sequence technology for selection preference.
  • Some data is based on new releases or internal data identifying users’ choices and most-watched movies.

7. Netflix’s Channels

Channels are the pathways chosen by the company to communicate with its customers. Through the Netflix channels, users and interested users can access the Netflix platform through one or more of these channels:

  • Online streaming via the website
  • Online streaming via mobile apps
  • Streaming on game consoles and TV apps
  • Postal delivery of DVDs

8. Netflix’s Cost Structure 

The cost structure is the part where you evaluate all the costs or expenses associated with your business. It mainly comprises production cost, distribution cost, and relationship maintenance cost. Netflix Business Model Cost Structure includes:

  • A large purchase of rights (TV shows and movies)
  • Cost of film production
  • Cost of personalized recommendations
  • R&D costs
  • Artificial intelligence costs
  • Subscription maintenance costs
  • Paid contracts with Internet service providers (ISPs) such as Comcast to stream Netflix data at high speeds
  • Infrastructure development (data centers)
  • Costs of streaming content
  • Costs of DVDs and mailing
  • Salaries of employees (customer service, engineers)

9. Netflix’s Revenue Streams

Netflix generated significant revenue streams and additional income in 2007 with the launch of “streaming” subscription services.

There are monthly subscription fees with three different pricing options in the U.S. market:

Basic – $8.99/month, Standard – $12.99/month & Premium – $15.99/month.

Netflix has a global customer base with its international streaming options. Upselling opportunities such as upgrading from Basic to Premium plan. Money-making movie studio with Netflix original shows like Stranger Games, House of Cards, and many more

In 2000, Blockbuster had the opportunity to buy Netflix for just $50 million. Netflix was a mail-only platform that offered an extensive collection of movies, series, and dramas. Not until 2007 did Netflix change its business structure from a mail-order system to subscription-based streaming content. Before introducing online streaming in 2007, Netflix’s revenues averaged $997 million per year.

Conclusion

Netflix’s business model is much more than streaming. It also includes the specifications of its global operating system, which includes content production and licensing, merchandising and publishing, marketing services, technology development, and partnerships.

Netflix is ranked as the most valuable media and entertainment brand in 2020. It may not just be about what a company sells but also how it sells or promotes its products.

Netflix has a powerful technological approach that innovates accessibility and captures customers and users with innovative accessibility. Netflix has also taken action in several areas to capture the global market.

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Salon Insurance: What Professionals Need To Know In 2022

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Salon Insurance

Salon owners can purchase hair and beauty salon insurance to get their needed coverage. You must ensure your salon has the right coverage to protect you against costly losses such as customer injuries and lawsuits. Whether cutting hair at home or managing a team of stylists, you must have the right business insurance coverage.

Starting any business comes with tons of hurdles. In beauty salons, a mistake can result in more than a bad hair day. The variety of salon insurance policies available for salon owners can make it challenging to determine what type of coverage you need.

To protect your business, equipment, premises, and reputation, read on for an overview of the different kinds of salon insurance you need and how much insurance costs.

What kinds of insurance does a salon need

A Business Owner Policy, a package of salon insurance policies that business owners require, is an option provided by certain insurance companies. Salon owners should purchase General Liability Insurance, Professional Liability Insurance, Commercial Property Insurance, and Workers’ Compensation Insurance. You should factor these in while determining how much money would be required to start your salon

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General Liability Insurance

The first kind of salon insurance that your salon would need is general liability insurance. It is crucial to have general liability insurance when you have clients visiting your salon daily. It covers the cost of claims for bodily injury, property damage, and personal injury (slander/libel), preventing you from incurring expenses.

For example, imagine a situation wherein one of your employees slips in the water and breaks their ankle. Or maybe you visit a client’s home to provide your services, and you drop nail polish on their expensive rug. In such situations, you will be liable to pay for the damages. 

All salon owners should obtain General Liability Insurance to defend against these kinds of situations. Despite this, as a salon owner, you may have a better alternative than General Liability Insurance. If an insurance company focuses on assisting small businesses, they might provide a Business Owner Policy which includes General Liability Insurance as well. 

Professional liability insurance

Professional liability insurance (also known as mistakes and omissions coverage, or E&O) is another crucial element for beauty salon proprietors. Professional liability insurance is critical since clients may sue you if they think you’ve made an error or misbehaved. Professional liability insurance will cover your legal fees, medical expenses, and settlement if you’re at fault. 

Beauty salons need professional liability salon insurance in cases of: 

  • Emotional stress: A client is burned when a hairdresser leaves a hair dye on too long. The customer, who is unable to work for several weeks due to the burns and the injuries, sues for emotional distress and physical injury. 
  • In case a treatment goes wrong: Your customer has to cancel a modeling job and get medical treatment after suffering a severe rash due to patch-testing. You are sued for loss of earnings and medical expenses. 
  • Personal data: In case you lose a file containing a client’s personal information and the customer is suing for the same. 

It is important to note that a Business Owner Policy still excludes certain claims. Inaccurate client advice and the professional salon services you provide are two examples. That is why you should obtain Professional Liability Insurance in addition.

Commercial Property Insurance 

You may be required to have property insurance whether you own or lease a beauty salon property. Despite that, a beauty salon property policy also covers the contents. If you lease or own a beauty salon, you may have everything from hood dryers to styling tools and massage chairs. 

Property insurance covers building and contents damage inflicted by fire, theft, or other covered catastrophes. Even if a fire begins in the back room, where you keep hair dyes, massage beds, and nail polish, everything will be covered by your salon insurance policy. The sprinklers will activate, resulting in water damage in addition to the smoke. This kind of salon insurance protects your salon from physical threats beyond your control. 

Workers’ Compensation Insurance

Workers’ compensation insurance must cover salon employees. In the event of an injury, would you be able to maintain your business running if one of your hairdressers was injured while styling a client’s hair? 

Your employees are working with hot irons, chemicals, and other hazards. Employees can be seriously injured on the job, resulting in hospitalization. Workers’ Compensation Insurance will cover them if they are injured and lose wages.

This type of salon insurance also protects you from workplace conditions that cause injury or illness. Employers must have Worker’s Compensation Insurance to protect their employees.

Why do you need salon insurance

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The risks and challenges a salon business can face should be familiar to current salon owners and those hoping to be one. You can fulfill your passion by helping your clients feel great, but you still must safeguard your business from accidents, fires, damage, or theft. Getting salon insurance is an important step for your salon business. You must get salon insurance for the following

Claims 

Claims can be difficult to process. Claims involving legal issues are particularly tough to settle down. In addition to compensating you for any monetary damages, these kinds of insurance also supply you with legal help in the event that you are being sued. 

Liability salon insurance protects you from paying for other people’s injuries that you cause. It also ensures you have access to skilled lawyers and solicitors who can handle the claim for you, allowing you to concentrate on operating your business. Legal assistance is provided to you at no cost. 

Reputation

In spite of the fact that it is preferable not to harm your customers or other members of the public, accidents do take place. You could be sued for compensation if you inadvertently injure a person or damage their property. Your liability insurer will handle the situation more efficiently and professionally if the person has their claim settled rapidly. 

Even if a mishap happens, people are typically reassured when it is handled without a lot of fuss. They may even recommend your salon as a result, since mishaps are often resolved without causing too much of a fuss. Thus, salon insurance can help you to maintain your reputation. 

Maintaining clients

Most salons have lots of regular customers. It’s expensive to recruit new clients, particularly in urban or rural areas with competing salons. If you cannot trade due to the sudden occurrence, this is a more serious problem than just losing money on missed revenue.

You might not be able to get back your regular consumers if you are closed for business. They will likely become regulars at another salon rather than yours, and it may be challenging to get them back. Having salon insurance in place to assist you in quickly reopening your salon helps prevent your regular customers from going to other places.

Employer’s liability insurance is one of the varieties of insurance that is required by law, but not all types of salon insurance are. An employee may claim that something you have done or failed to do, resulted in them being injured, resulting in this type of salon insurance covering you. 

You can be heavily fined for not having employer’s liability coverage if you have employees. In addition, you must display an employer’s liability certificate in your salon so your employees can see it, and you may be penalized if you do not.

Best salon insurance providers

The Hartford

The Hartford is the number one salon insurance provider because of its strong financial standing and its capability to provide a wide range of coverages to accommodate home-based businesses. 

The Hartford offers the greatest variety of coverage limits, endorsements, and supplementary coverages. You may obtain general liability coverage ranging from $300,000 to $3 million, or specialty coverage from $250,000 to $2 million. 

Most salons will get workers’ compensation coverage of between $400 to $600 per employee, annually.

CyberPolicy

CyberPolicy is an online salon insurance broker that can get quotes from highly accredited salon insurance companies to offer alternatives to traditional insurers. Despite its moniker, CyberPolicy can handle virtually any salon insurance policy. 

This salon insurance policy includes the basic policies, such as general liability, professional liability, and property insurance, as well as Cyber insurance, Workers’ compensation, Commercial automobile, Crime insurance, and Umbrella insurance. 

Premiums and coverage capabilities will vary if you need specific coverage, operate a small business, and face significant risks due to working as a broker for several insurance companies. The general liability insurance costs $309 to $1,575 per year. 

Hiscox 

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Home-based salons can get affordable salon insurance from Hiscox, a company that handles more difficult-to-place risks and small businesses. You can save up to 10% on your policy by choosing Hiscox, which provides comprehensive coverage for general liability, professional liability, business owner’s policy, and BOP insurance. 

Hiscox is a salon insurance firm that offers business owners professional liability and general liability insurance with $5 million in coverage. However, they don’t provide these types of policies in some states. While Hiscox can’t offer BOPs in Alaska because of liability law, they can write liability BOPs in 19 states and Washington, D.C. 

Regardless, Hiscox delivers reliable liability BOP coverage starting at only $400 per year and $1 million/$2 million in coverage.

Summing up

A salon is a business that offers beauty treatments for clients. Many people consider salons a form of “boutique” that offer fashion, hairstyling, and manicure/pedicure services. However, beauty salons can offer more than just beauty services.

Most states require beauty salons to have liability salon insurance. In the event of any type of accident, you would be covered by your policy. This would protect you from paying for other people’s injuries that you cause. You could also be legally protected if you don’t know about some aspect of your business that could cause harm to a client.

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