Lenore Johnson from LenJo Bakes Inc. with Square Stand and TerminalSUPPLIED
After investing a significant amount of money to open her storefront dessert shop LenJo Bakes in early 2020, owner Lenore Johnson was forced to close within a few weeks, alongside other brick-and-mortar businesses, due to the pandemic.
It was a tough start for the Kitchener, Ont. entrepreneur who makes beautifully designed cakes and other desserts.
“Being a new business, especially, you don’t have a lot of credit or financial resources at your disposal,” says Ms. Johnson, who started LenJo Bakes after working for years as a pastry chef in places like New Zealand and the United Kingdom. “We just set up a storefront and we’re starting six figures in the hole.”
Though she had a business credit card, it had high fees and limitations on where it was accepted. With no credit available for the new business, she ended up using her personal credit card for business expenses.
“Eventually, I got a separate personal Mastercard just to use for the business because it was getting complicated,” she says.
To help take control of her business cash flow, Ms. Johnson recently became one of the first Canadian businesses to test the new Square Card — a business expense card that’s the latest in a growing list of offerings in Canada from the software, payments and hardware company Square.
“It’s just really changed how we’ve been able to manage our business,” Ms. Johnson says.
The card, which officially launched in Canada on Sept. 28, gives businesses immediate access to the funds they’ve processed through Square – with no extra fees or recurring charges.
As soon as a business makes a sale, those funds are added to its Square Balance and can be accessed using its Square Card anywhere Mastercard is accepted.
“It’s money we know we have. You can’t overspend, which is incredible,” Ms. Johnson says.
Business expenses add up quickly at a bakery, she says. “Before you know it, you’re two weeks into the month and you’ve maxed out your card and it’s like, ‘now what do I use, debit?’ But then you have to pay bank fees — and on every transaction,” she says. “It was so overwhelming.”
Managing cash flow is one of the biggest challenges for small businesses, says Christina Riechers, head of product for business banking at Square.
Businesses sometimes prefer physical cash because there is no delay between getting paid and using that money to run the business.
“We’ve seen the buyer behaviour shift to increasingly preferring cards over spending with cash,” Ms. Riechers says. “On the business side, we know they have tight cash flow constraints, and can’t afford to wait a day or two for card processing sales to reach their bank account. We then posed the question: ‘How can we better equip small business owners to manage their cash flow?’”
The answer is Square Card.
“Imagine you are a contractor. You go to a job site in the morning, meet with the owner, and agree on a price for the work. The owner pays the deposit on the spot with their credit card,” she says.
Rather than waiting a day or two, those funds are available instantly, Ms. Riechers says.
LenJo Bakes Inc. Square CardSUPPLIED
“You take that payment, the money is immediately on your Square Balance so that you can go to the hardware store, buy supplies using the Square Card, and can get going right away,” she explains.
Square already transfers card payments processed through its systems to clients’ linked bank accounts by the next day, for free.
“The Square Card is our opportunity to reduce that time down to almost nothing,” Ms. Riechers adds. “You take a credit card sale, and you immediately have that money in your Square Balance, and you can access it on your Square Card.”
The Square Card is available to any business that uses Square’s payment processing. On their Square Dashboard, business owners can see their revenue coming in, and costs going out via Square Card spend, eliminating another challenge for small business owners – the fragmentation of tools they use to run their business.
Business owners can essentially use the card as a business account and track in real-time exactly what’s coming in and what’s going out.
“In the U.S. when we launched the Square Card, we were astounded by the number of sellers who beforehand had been wholly reliant on a personal bank account to run their business,” Ms. Riechers says.
That poses challenges for taxes and for knowing how the business is doing. “Using the Square Card… they can start seeing how their business is doing and tracking it,” Ms. Riechers adds.
For Ms. Johnson, separating her business finances from her personal finances is another win when using the Square Card.
“I’ll earn the money today and I can go and use my Square Card on my business today. It’s life-changing and it’s so simple,” she says.
For Canadian businesses that want instant access to payments, but prefer an external bank account, Square has also launched Instant transfers. By clicking a button in the Square App, or on their Square Dashboard, funds are immediately transferred into a linked account for a 1.5 per cent fee per transfer.
It’s just one of the many easy-to-use tools and services that Square offers to help empower entrepreneurs to succeed, Ms. Riechers says.
“Small businesses are the heartbeat of communities and help drive the Canadian economy,” she says. “At Square, our goal is to continuously reimagine the financial system for small business owners with their cash flow needs at the centre.”
Ms. Johnson says she first turned to Square because it offered her the most flexible and affordable payment processing options for her new storefront bakery and existing wedding cake business. When the pandemic closed the storefront portion of LenJo Bakes, Square helped her create an online store “literally overnight.”
She now uses Square Invoices, the platform’s customer database and other small business solutions.
“Square is providing exactly what small business owners need and especially in a time like this,” she says. “I couldn’t imagine running my business without Square.”
Advertising feature produced by Globe Content Studio with Square Up. The Globe’s editorial department was not involved.