(Add to Favorites | View All Articles | Resource Directory)
|
|
|
How To Build Business Credit
Having their own business is something many millions of people dream of doing. Many do, of course, but so many others never quite get around to it. One of the factors that may discourage people from getting that business off the ground, is a lack of start up capital; and another may be the risk of losing their own money. With a bit of thought, planning and effort, though, it may be possible for you to not only raise some start up capital, but do so through business credit. In other words, borrow against the business rather than personal assets. You may be thinking that you have no business yet. That may be so, but it does not mean you cannot obtain business credit to get your plans started Building business credit is completely different from building personal credit, and it is best to keep them separate if possible. Some credit reporting agencies will sell a business FICO score based on both the risk of the business and the personal credit of the owner. In some instances, the owner's personal credit is linked to the business credit, separate credit records are profitable. You should also bear in mind that you do not have the same credit protection laws with business credit as you do with personal credit. There are some important steps to follow in building a good business credit record. Here are a few for you to take into account: 1. Prepare Business Plan And Structure You are now in the world of business credit, not consumer credit. This means that you are trying to project yourself in a business-like way. In preparing yourself to do this, you will have the added bonus of preparing yourself for the transition from being an employee to being a business man or woman. The more business-like you become, the better your business will do in the future. But first things first. Your first job is to convince potential lenders you are going to have a viable business. The quality of your preparation is important; if you go seeking business credit without doing your homework, you will be sent back to the drawing board. To begin with, set up a proper business structure, and if you require any licenses, make sure those are in place. Also, prepare a business plan, with the aid of an advisor if necessary. You can use this to show that you have thought about the business: the products, the markets, the competition, pricing, and all the other elements of the business. Be prepared to defend your projections for sales, and your estimate of start up and running costs. Again, this has the added bonus of being a good preparation for you, regardless of seeking credit for your business. You will become a better business person for preparing your business plan. Hopefully, that will stand you in good stead as your business grows successfully. Planning will become a part of your monthly or annual routine. Another preparatory move that will help you is, in the US at least, getting a business credit profile. This can help you to build up business credit without using your personal credit. The benefits in having a business credit profile are many. Most importantly, you will have more cash for the business, convenience in purchasing, protection of your personal assets, limiting of personal liability from the business, and the ability to prepare your business for future lending needs. 2. Become A Good Credit Customer You will, of course, need to buy equipment, services, stocks and other materials for your new business. If you can find vendors who will grant you credit, all the better; but is best if they are companies who will report your credit history to the major business credit reporting agencies. Dunn and Bradstreet is probably the best know internationally. Unlike with personal credit ratings, or FICO scores, with business credit scores income or income potential play an important roll. The top scores are reserved for the large stable businesses, but with careful and diligent business and crdit practice, you too can achieve a good credit rating. 3. Obtain A Credit Assessment In order to enter the business credit market, it is best to do a credit assessment. This will determine if you comply with the lender and credit bureau's requirements. Once you have done that, look for businesses that issue credit without the need for established business or personal credit checks or guarantees. Once you have transacted business with vendors on credit, you can utilize those references to build your credit profile with the credit reporting agencies. In many US states, there are non-profit organizations and/or government organizations that will help you with obtaining business credit. Often there are loans available for start-up businesses or even government grants. Check your state government, or national government if not in the US, web sites for such organizations. Many retired, or semi retired, businessmen volunteer to help start-up businesses. If you can, take advantage of such help; it will all build your knowledge as you set out on the road to a successful business with a good credit standing. Experienced business people will forewarn you of many of the pitfalls of starting your own business, and you will be better prepared. This how to build small business credit article was written by Roy Thomsitt, owner author of the Eliminate Credit Card Debt Now website. Roy is a former finance and business professional, now a full time online author.
MORE RESOURCES: News provided by Yahoo! News and Google News President-Elect Obama’s Proposed Revisions Could Devastate Small Business (National Center For Policy Analysis) Six small biz tips from a CEO who flies right - BloggingStocks 26% of Small Biz Raises Ad Spend, Precipitating Online Growth - Marketing Vox News Snow rakes help small business weather rough economic climate (CNN) Poll: 25% of small-biz owners worry about survival - Bizjournals.com Credit gets tighter for small business (The Globe and Mail) Apple Reworks iWork for Small Biz - bMighty.com Smallbiz Brain Presents America’s Best Companies - PressReleasePoint (press release) US Celcos Urged To Create New Small-Biz Programs - Telecomweb |
|
|
|
RELATED ARTICLES
Equipment Maintenance Manual for Mobile Cleaning Business Outline Service Cleaning Businesses must maintain their equipment in order to insure it is ready to go when the company vehicles reach their customer. It does not matter how many service vehicles or employees you have, a manual can save you both time and money. Balancing your priorities- Not everything can be perfect As small business managers, we juggle limited resources in a quest for success. To an extent, when we focus on success in one area we forego attention elsewhere. The Role of the Business Model and Strategy for Business People will always stress that having a well researched business plan is key before you start your business. Although creating a business plan is often an important step in the evolution of a business, particularly if you need financing or you are not experienced at running a business, it is not necessarily the essential first step. How to Write a Credit Policy for Your Business The book, "Become the Squeaky Wheel," by New Hampshire author Michelle Dunn, says the different ways people use and extend credit makes or breaks your credit policy and bottom line, which could result in less or more sales and money for your business."Business owners all have different types of businesses but can all extend credit," explains Michelle Dunn. Without a plan, your business has a 92% chance of failing Before you start a business we encourage you to prepare a business plan. Without it your business has a 92% chance of failing within the first 12 months. Ever thought of starting a virtual assistant business? If you're organized, smart, capable and willing to work with deadlines, you could start a virtual assistance business and cash in on your skills without having to commit to an employer (you'd be your own boss instead) or the "cube life". A VA (virtual assistant) is basically like an administrative assistant (or whatever duties need to be filled, such as writing, link building etc) that serves in a virtual capacity. Eight Key Steps to Selling Your Business and Cashing In This year, some 700,000 American businesses will be sold. Most will be small and mid-sized businesses like yours. Look Out for that Great Accountant There are many factors to be considered when you are trying to select the accountant who is right for you. In other words how to find that good one. How to Curb Antique Shop Theft Inexpensively If you have ever had your antique shop or mall ripped off, you understand that it's very hard to detect. There are simply so many items to keep track of, and an item can be missing literally for months and you may not realize it. Creative Business Card Marketing Announcements can be handed out as a business cardAnnouncements can be more than just a press release that lets the world know that something special has occurred at your place of business or to you personally. You can make announcements for almost anything. 1-2-3 Steps To A Successful Joint Venture A successful joint venture marketing effort is the goal of many small businesses, and is a great way to increase market visibility and profits.Joint venture marketing is rising in popularity everyday, but it does take some skill, good planning and foresight to execute. Cleaning Grain Silos, Towers, Containers, and Combines If you run a pressure washing company in a rural market you will need to learn how to wash agricultural industry equipment and infrastructure. In our company The Tractor Wash Guys, we We have several years of experience washing combines. Truck Wash Business Case Study Often smart entrepreneurs look for out of the way businesses, things out of the mainstream but businesses, which have a good customer base and steady incomes. This is an extremely interesting story. Pressure Washing Business Case Study, Tractor Cleaning So often small service businesses fail to exploit niches, which have little if any competition. I know as I built my companies we always tried to identify all the market niches and go after them. Due Dilegence 101 Or What You Do Not Know Can Kill You! - Part 1 Introduction: This article is written as a general discussion on the subject of "Due Diligence". It is for informational purposes and not intended to be a definitive guideline for your exact situation. 11 Things Small Business Owners Can Learn From The Miracle On Ice 1. Know Where You're Going - Coach Herb Brooks had a strategic plan for assembling the American team. Entrepreneurs and Franchisors Watch Out New Franchisors and Entrepreneurs need to watch out as they enter into the world of franchising. What advice can I give to a new franchisor, I was asked today by another entrepreneur with a wonderful new concept; what are the tiger traps that lay ahead?So you are a new franchisor? Who can you trust? Can you trust FranData? The Industry's information source was thought to be a friend, is it? Well they can get you on a list so that SBA Loans for your new franchisees go smoothly. Where Can I Get Clients From? The following tips have come from a wide variety of sources; some from other successful businesses we know, some from our Home-Based and Small Business Support Group meetings and some we've developed by trial and error.Some of the ways to get clients are:contact previous employers;mailing lists;cold call your target market;attend group meetings and seminars for your target market (conventions for doctors, lawyers; computer seminars);attend local Chamber of Commerce meetings;join groups related to your target market;if your target market uses a specific system, for example accountants use the SafeGuard system, contact them and tell them that you are available to teach them how to use the system or you can do it for them. Hire a Virtual Assistant for those tasks you don't have time for Are you a home or small business owner and you're Webmaster, receptionist, and assistant all in one, but you've found that there isn't enough time in the day to complete all of these administrative tasks? A "Virtual Assistant" could be your answer.In today's tough economical times it's hard to think of hiring someone else to assist you, but it may be more cost effective than you think. A Gift Basket Home Business is an Easy Way to Wrap up Profits You want to know more about making money with your own gift basket home business. You are a creative person and want a career that you can control and find rewarding at the same time.
|
| home | site map | articles |
| © 2006 |