Tag: Work

How Does Business Credit Work?

Most business owners know that business credit is a thing, but they do not understand how it works.  Many have the idea that all they have to do is apply for credit with their business name to begin building it, but that’s not quite right.  Others have no idea it even exists. You cannot successfully build business credit if you do not understand how it works. So, how does business credit work?

Everything You Need to Know About How Does Business Credit Work from the Ground Up 

The first thing you need to know about how does business credit work is that it does not build passively like consumer credit. You have to actively work to build it. This starts with how your business is set up.  It needs to be set up to be a fundable entity separate from you personally. This is for many reasons, but for business credit it keeps your business and personal credit from getting all mixed up. 

How to Build a Fundable Foundation for Business Credit

We like to call this a “fundable foundation” or a “foundation of fundability.”  Basically, it is setting up your business in a way that makes it appear legitimate and credible.  Some of the factors that go into this are common sense, others may surprise you.

How Does Business Credit Work?  Contact Information

The first step in setting up a foundation for business credit is to get your business its own phone number, fax number, and address.   Surprisingly, this doesn’t mean you have to get a separate phone line, or even a separate location.  You can run your business from your home or on your computer, and you do not even have to have a fax machine.  Find out more about how this works here and here. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

How Does Business Credit Work? EIN

Your business needs and EIN.  This is an identifying number for your business that works the same way your SSN works for you personally.  It looks more credible to use this number rather instead of your SSN for business loan applications.  Having an EIN is also important for building business credit, as it separates your business accounts from your personal accounts. You can get one for free from the IRS.

How Does Business Credit Work? Incorporating

Incorporating your business as an LLC, S-corp, or corporation is necessary for building business credit.  It offers some liability protections, but it also separates your business from your self for definitively, which is essential to the business credit building process. 

Which option you choose has more to do with your budget and how much liability protection you need than it does for business credit and fundability.  The best thing to do is discuss the issue with your attorney or a tax professional.  

Incorporation has to happen as soon as possible.  Time in business counts, and it starts over at incorporation.  This is true regardless of how long your business has been in operation before incorporation.  Not only that, but any positive credit history you have related to your business up until the point of incorporation will be lost as well.

How Does Business Credit Work? You Need a Business Bank Account

You have to open an official business bank account.  There are a few reasons for this.  First, it even further establishes your business as a separate entity. Next, it will help you keep personal and business finances separate.  This is beneficial for tax purposes. 

In addition, there are several types of funding that will not be available to you without a business bank account.  Some lenders and credit cards want to see one.  Also, it’s not possible to get a merchant account without a business bank account. That means, you will not be able to take credit card payments.  Consumers tend to spend more when they can pay by credit card.

How Does Business Credit Work? Having the Proper Licenses Matters

A business has to have all of the necessary licenses it needs to be fundable.  If it doesn’t, red flags are going to fly up all over the place.  Do the research you need to do to ensure you have all of the licenses necessary. 

How Does Business Credit Work? A Professional Website is Important

You would probably never dream that your business website could affect your ability to get business credit. However, in today’s world, we all run to the internet first for virtually everything.  Often, the website is the first impression your business makes on customers and even lenders.  A poorly put together website does not make a good impression.

Spend the time and money necessary to ensure your website is professionally designed and works well.  Do not use a free hosting service.  Rather, pay for hosting. Along these same lines, your business needs a dedicated business email address.  Make sure it has the same URL as your Website.  Free email services such as Yahoo and Gmail are not sufficient.

How Does Business Credit Work? D-U-N-S Number

If you do not have a D-U-N-S number, you will not have a credit file with Dun & Bradstreet.  Since they are the largest and most commonly used business credit reporting agency, that would seriously affect your business credit potential. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

It’s free and easy to get a D-U-N-S number.  You just go here.  However, be aware that they will try to sell you a number of other products that you do not need.  Just put your blinders on and keep pressing toward the goal of getting that number, which again, is free. 

How Does Business Credit Work? Next Steps

After you have your business set up as a fundable entity, you will have to get accounts reporting to the business credit reporting agencies (CRAs.)  It’s not as easy as just applying for credit and making payments. Here’s why. You have to have business credit to get business credit. Until you have and established score, most lenders will not approve you for funds.  

How do you get around this? The first thing you can do is talk to those vendors you already have a relationship with. With an established relationship, they may be more likely to extend credit without a credit check.  Be sure to ask them if they will report however, because if they will not it doesn’t matter. 

You can also ask utilities and other monthly payments to report.  Electric companies, phone companies, and even internet providers might report your payments if you ask.  They don’t have to, but it can’t hurt to try.

In addition, there’s a little secret known as the vendor credit tier.  These are starter vendors that will award net terms on invoices without a credit check, and then they will report your payments to the CRAs. This will get the ball rolling. 

How do I Find Starter Vendors?

Vendors that fall into the vendor credit tier do not necessarily advertise themselves as such.  As a result, they can be hard to find on their own. Here are a few options to get you started. 

Grainger Industrial Supplybiz credit explained Credit Suite

Grainger sells power tools, pumps, and hardware among other things. You can apply by fax or phone. If you need less than $1,000 in credit, you only have to have a business license for approval. For over $1,000, you will need trade and bank references. 

If you are just starting out and do not have references, the $1,000 is plenty to get you started building business credit. Go here to get started. 

Quill Office Supplies

Quill is popular and easy to get started with. They sell office supplies as well as cleaning and packaging supplies. Generally, you can get most of what you would use in the everyday running of a business from them. 

They report to D&B. If you do not already have a D&B score, you will have to place an initial order first. Typically, they establish a 90-day prepay schedule.  Then, if you order each month for three months, they will approve you for a Net 30 account.

Get started with Quill here.

Uline Shipping Supplies

Uline reports to Dun & Bradstreet.  They carry shipping boxes, dollies, janitorial supplies, and more. Since they report to D&B, you have to have a DUNS number before you get started with them. They will also ask you for a bank reference and two other references. In the beginning, you may need to prepay before they will approve Net 30 terms. 

Find out more about Uline here. 

Behalf.com

Behalf is way of getting paid through an app, but they funding as well. The more often you have customers pay through Behalf, the more likely they are to offer you favorable funding terms.

They offer both purchase financing and virtual MasterCard options. Terms run from Net 30 to 180 days, and they report to Dun & Bradstreet, Experian, and Equifax. This fact alone, that they report to all the major credit reporting agencies, makes them extremely valuable when building business credit.

Find out more here. 

How Does Business Credit Work? The Other Credit Tiers

The vendor credit tier is like a gateway tier to the other credit tiers.  It goes a little something like this. 

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. For example, Lowes falls into this tier and reports to D&B, Equifax and Business Experian. They need to see a PAYDEX score of 78 or higher. The PAYDEX score comes from D&B, so you need a D-U-N-S number for anyone that uses PAYDEX.  Most do.

Fleet Credit Tier

Once you have enough retail accounts reporting, move to the fleet credit tier. This is credit that you can only use to buy fuel, and to fix or maintain vehicles. One example is Shell, who reports to D&B and Business Experian.  They want to see a PAYDEX Score of 78 or better and a 411-business phone listing. 

In addition, Shell might say they want a certain amount of time in business or profits. But if you already have sufficient vendor accounts, that may not be necessary. 

Cash Credit Tier

Here is a good example of how business credit works.  If you handle your credit responsibly in the other tiers, you can start to apply for cards in the cash credit tier. 

These are service providers such as Walmart and Dell, and also Home Depot, BP, and Racetrac. They are usually MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

How Does Business Credit Work? The Application Process

Having your business set up properly is only the first step.  Once you start applying for business credit you have to use your business information.  Use your business address, business phone, and EIN. Do not use your SSN as part of the credit application, but be aware that they may ask for it, along with your birthday, for identification purposes due to fraud concerns. 

By using your business information and not your personal information, you ensure your business credit transactions are not mixed up with consumer credit transactions.

Business Credit is Just One Part of Fundability

Fundability is composed of many layers, and business credit is just one part with layers all its own.  It is a large part of fundability, but there is a lot more out there. One thing is for sure, you have to have the same foundation for both business credit and fundability, so it’s best to take care of that part as soon as possible.  To find out more about fundability and what affects it, go here.  

Why Is Business Credit Important to Fundability?

When you look at fundability, personal credit affects it as well.  Knowing that, it’s natural to question why business credit matters at all.  Why do we need two different kinds of credit? There are few reasons, but two of them are glaring once you understand how it all works. First, it costs a lot to run a business, and personal credit limits are not as high as business credit.  If you try to put business expenses all on personal credit, you are going to hover near your limits, which will have a negative effect on your personal credit score. That could keep you from being able to get a loan for a house or a car due to simply running your business. 

Also, if you have a good business credit score, you will likely have higher credit limits available to you. This will help ensure you have access to the funds you need to run and grow your business. 

How Does Business Credit Work? It Is a Process

When trying to answer the question of how does business credit work, you have to remember that it’s not a short answer.  There is a process that has to be followed. It starts at ground level with the foundation. Then you have to travel up several credit tiers, using your credit responsibly and making payments on time as you go.  This will ensure you build a strong business credit score that will only increase your fundability. 

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Exactly how Does The Stock Market Work For You

Exactly how Does The Stock Market Work For You

The supply of openly had companies are purchased as well as marketed at a supply exchange or supply market. You do not require to take a trip to the supply market due to the fact that there are brokers that will certainly represent your passions by marketing and also purchasing supply on your part.

Without a broker to represent you at the stock exchange, you would certainly need to locate individuals that could be curious about your supply and also discuss rates by yourself. This might be a taxing and also expensive undertaking. If every person had to do it on their very own, most likely not much supply would certainly obtain purchased and also offered.

The securities market has an unique impact on supply costs. Because every one of the supply is dealt at one certain location, in the U.S. that place is the New York Stock Exchange, financiers can see their supply fluctuate minute by minute. They can have an instantaneous response to costs, choosing whether to offer or get based upon the changes of the supply market.

Any type of organisation desiring to offer shares on the supply market must, initially, include. Some individuals ask yourself if the supply market is or is not a really excellent method to value a firm.

Independently held shares of supply are not purchased and also marketed on the supply market. Just openly had shares of supply are acquired as well as marketed on the supply market. A firm with openly held shares of supply is possessed by any type of number of individuals that get and also market their supply freely, on the supply market.

When a firm at first markets its shares of supply on the supply market it is called an Initial Public Offering (IPO). The individuals that bought shares of supply in this firm using the supply market are wagering that the firm will certainly utilize this cash to make a revenue. These investors can after that get a return on their financial investment via returns or by marketing their shares on the supply market, at a revenue.

The supply of openly possessed organisations are gotten as well as offered at a supply exchange or supply market. Given that all of the supply is acquired and also marketed at one certain place, in the U.S. that place is the New York Stock Exchange, financiers can enjoy their supply surge as well as drop minute by minute. Independently held shares of supply are not acquired and also marketed on the supply market. A firm with openly held shares of supply is possessed by any type of number of individuals that acquire as well as offer their supply honestly, on the supply market.

When a company originally markets its shares of supply on the supply market it is called an Initial Public Offering (IPO).

The post Exactly how Does The Stock Market Work For You appeared first on ROI Credit Builders.

Support Work Place Mental Health and More –10 Brilliant Business Tips of the Week

Are you supporting work place mental health at your business? We show you how to make your workplace friendlier for mental health. Plus, nine more awesome tips to close the deals while treating your employees right.

The Hottest and Most Brilliant Business Tips for YOU – Support Work Place Mental Health and More

Our research ninjas at Credit Suite smuggled out ten amazing business tips for you! Be fierce and score in business with the best tips around the web. You can use them today and see fast results. You can take that to the bank – these are foolproof! Starting better supporting work place mental health for your employees and more.

Stop making stupid decisions and start powering up your business. Demolish your business nightmares and start celebrating as your business fulfills its promise.

And these brilliant business tips are all here for free! So, settle in and scoop up these tantalizing goodies before your competition does!

#10. Be Real!

Our first jaw-dropping tip is all about building an authentic Instagram audience. Entrepreneur says your aim should be to create a community, and not just a bunch of followers. But the tip we loved was the first one – and it leads directly into the one about a community.

Follow Hashtags to Instagram Glory

Now, the truth is, you can do this on Twitter and Facebook as well. Although, note that on Facebook there’s less of a culture of using hashtags on posts, replies, notes, etc. People use hashtags to cull the tsunami of information they get every day on social media. It’s easier to read enough content to fill, say, an hour, versus 24 hours. Heck, it’s not possible to keep up with everything anyway.

This takes advantage of a truth for everyone. We all curate our social media feeds, or we let algorithms do that work for us. Because none of see everything. It’s physically impossible.

This means your ideal audience is doing so as well. The posts they click on and react to are fueling the algorithm. They’re essentially telling the algorithm what interests them. So, let’s say you have a dry cleaning establishment. People might not be taking about it too much on Instagram. But for those who are, they’re probably using hashtags like #drycleaning and #drycleaner. They may even be using hashtags like #laundry and #delicatefabric or #lookinggood.

As you find these people, engage with them. This means commenting on photos and maybe sending a personal message. But be mindful of the fact that not everyone likes personal messages. And, you probably shouldn’t lead with one. ‘Cause that’s just creepy.

#9. Soften Your Sales for Success

The next awesome tip is about how to use soft selling in your sales efforts. Mail Shake notes that soft selling doesn’t mean passive selling. You are still trying to sell, after all. 

Personalization

We have been beating this drum for quite a while, and so have many of the articles we’ve been reading lately. Because of technology, personalization is possible on a grander scale than ever before.

As a result, we loved their comparison between hard and soft selling. For hard sales, you get the prospect’s contact information. But there’s no specifics on that. Whereas for soft sales, it comes from personal contact, such as networking, social media engagement, or inbound marketing. 

We are all on the lookout for scams. What sounds more like a scam to you? Is it someone calling you out of the blue with a sales offer, or someone you know, at least a little, making that same offer?

In the next tip, we’ll cover building trust.

Work Place Mental Health Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Support work place mental health and treat your employees and customers right – plus nine other great tips this week.

#8. Build Trust Brick by Brick in Current Relationships

Our following life-changing tip concerns building trust in extant relationships. LinkedIn lays it all out for us. Of course, we are talking about this in the context of sales. But this could work for your not-so-commercial relationships, too.

Don’t believe us? Then try this tip on for size.

Treat Your Customers as if They Were Prospects

Essentially, as in life, don’t take people for granted!

Kind of a good idea no matter what, eh? 

Checking in on existing customers is a great way to build trust and to set the stage for, perhaps, renewals or even upsells. And, let’s face it, you’ve spent a ton of time courting a prospect and converting them to a customer. Abandoning them once the check is cashed is the very antithesis of that. 

And how should your customers feel if the only times you contact them are when it comes to getting your hands on some more of their cold, hard cash?

How would you feel?

#7. Perfect That Elevator Pitch for Investors

For our next sensational tip, we looked at avoiding errors in your first meeting with investors. Startup Professionals says that there are eight errors which you should be doing your best to avoid.

Actually, this is good advice for any sort of an elevator pitch, such as when you’re bucking for a new job. We encourage you to read the article and see for yourself. Hence, we’ll concentrate on one tip.

Stop. Talking. So. Fast.

Did you know that the attention span for elevator pitches is just 30 – 60 seconds? And that means about 150 – 250 words.

Any more than that, and you’re just overloading your potential investor. This means two things are in order. One, practice, practice, practice so you don’t lose words to um, uh, and er. And two, consult a thesaurus and find better, more descriptive words if you need them.  This doesn’t mean $100 words. Rather, it means being succinct, so long as you can be understood.

That means instead of saying “our product is between blue and green”, you say, “our product is teal”. It’s not just faster and more succinct. It’s also more confident-sounding.

https://creditsuite.wistia.com/medias/94z8msbn94 

#6. Empower Your Employees with Productivity Software

This tip is so cool, and it works! The SBA tells us all about productivity software to empower your employees. That’s a great way to support work place mental health, eh?

Our favorite tip had to do with showing big goals to your entire team. We loved that because it gathers all of the trees into a forest. That means it’s time for a true story.

Your Work Matters

Way back when – as in, the 90s – your intrepid blog writer worked as a data analyst for the Legal Department of a large insurance company. This company routinely spent millions of dollars every year on outside counsel. Their list of law firms topped 3,000 firms.

And so, I was asked to do two things – figure out if a firm is being paid fairly and determine if we can let a firm go and get another to pick up the slack.

This meant gathering a ton of supporting information from local offices. It also meant putting together a system for deciding ‘fairness’. Now, this is before much of the internet (we didn’t have access, anyway) existed, so there was no looking up salaries online. 

With no information on the big picture, I never learned just how much money the company saved because they ended up with a workable system to decide how much to pay their outside counsel.  With no information on the overarching reason for my task, I felt purposeless.

And, you guessed it, I finished the project and left shortly thereafter.

Employees want to have a sense of purpose. Showing them what their work is leading to can do that.

#5. Take the Time to Support Work Place Mental Health at Your Business

Grab this mind-blowing tip while it’s hot! 

Support work place mental health – it’s the right thing to do.

Entrepreneurs’ Organization says work place mental health is not a subject everyone is comfortable with. But they should be.

Now, keep in mind that the article does not suggest that managers or entrepreneurs need to become therapists. In fact, one of their tips is to bring in a work place mental health counselor. This can be someone accessed remotely.

But here’s the tip we really liked and think should be explored in some depth.

Give Your Managers TrainingWorkplace Office Mental Health Credit Suite

 This is not necessarily to be able to tell if someone has a mental health issue. It’s more to train your management to be more sensitive to the employees who report to them. This means praising people publicly when they do well. And it also means kindly addressing problems early, and in private.

If your employees feel comfortable talking to you about their work performance, then they just might feel comfortable talking to you about their work place mental health. And if you are a sensitive manager who pays attention to your employees, then you may notice when they are feeling off.

Depression Isn’t Just Feeling Down

We would be remiss if we didn’t touch upon this. And it wasn’t covered in the article, but it’s still vital. There are a number of memes flying around which claim that depression in particular is just an instance of temporary sadness or even inattention. As if counting your blessings could cure a serotonin imbalance!

So, keep in mind that an employee suffering from depression might not, to you, look ill. They may be holding it together as well as they can during business hours. But then at home, it all comes out. 

And, the corollary to this is also true. An employee who’s down – particularly if there’s a readily identifiable cause – isn’t necessarily a person with mental health issues. That doesn’t mean you can’t offer counseling services, of course. Divorce, death, miscarriage, estrangement from family – these can all make people feel bad, of course. 

Supporting workplace mental health means accounting for that, too.

In short, be kind, for everyone you know is fighting a battle you know nothing about.

Work Place Mental Health Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Support work place mental health and treat your employees and customers right – plus nine other great tips this week.

#4. Hello, My Name is Email

Check out this spectacular tip, all about how to successfully introduce yourself over email. HubSpot notes that there’s an actual formula to writing an email to someone you don’t know – at all.

This is an excellent article, and we strongly encourage you to read it through to the end. It truly is that good.

So, instead we’re going to concentrate on one of their steps.

Make Your First Line About Them

How many times have you received an unsolicited email that started with – my name is ___? Or it started with – I’m writing to you because ___. You may have sent emails like that. Your intrepid blog writer sure has (oops, sorry).

But it’s an email. The sender’s name is already on there. And it isn’t, then the sender can add their name in their signature line, and they should. 

Rather, try opening with a line like – I see that you won the __ prize recently. Or, I just saw your post about __ on ___. Here’s another: I’ve never learned so much from one piece of content.

Then, segue into why you’re writing – and it should be related to your opener. By definition, that means it needs to be related to the recipient. Here’s an idea:

I’ve never learned so much from one piece of content. To that end, I would love to get your quote for a similar article I’m writing.

By the way, this approach could work for anything from sending a resume to contacting someone’s dating profile… 

#3. Where Do You Want to Go Today?

It’s not your imagination: this winning tip can help you create a vision board. Score tells us that vision boards are a way to see where you want your life to go. And that can be for either your personal or professional life. 

This article concentrates more on vision boards for a personal life. But there’s no reason why it can’t be adapted for professional use.

Consider the Future

For a personal vision board, it might be representations of a place you’d like to live or visit. Or it may be images of fitness or other goals. For professional goals, it could be visuals of success – for you or the business.

What does this spell, in terms of images? It could be a corner office or a picture of a second location. Or it could be an image of a lot of employees.

So, Where Do You Want Your Business to Go?

What are your business’s goals? If you own a trucking company, maybe you want to be the premier provider in Utah. Or maybe you want to hire more drivers or get more trucks. It could be that you have a company you’d like to snag as a client.

Having a visual representation of success can be inspiring to a lot of people. Why not decorate your workplace with a vision board? Talk about supporting workplace mental health, too. Because when you take others’ ideas into consideration, then they can feel a lot less isolated. That might make a difference for someone.

#2. Are You Meeting 401(k) Standards in Your Business?

Our second to last unbeatable tip can give you a new perspective on making sure you meet 401(k) standards in your business. Effortless HR reveals all about this essential part of benefits handling.

Our fave tip was about having what is essentially a form of insurance. It’s actually an ERISA fidelity bond. The bond has to be equal to the lesser of $500,000 or 10% of the total investment accounts that you hold. This insurance bond protects your business if errors are found in your management of the 401(k) plan. 

Did you know you needed that in order to offer a 401(k) to your employees? 

#1. Master the Clock

We saved the best for last. For our favorite remarkable tip, we focused on improving time management. Under 30 CEO says better managing your time means you’re that much more likely to achieve your goals. 

We’ve seen some of these tips before, to spend your leisure time on leisure, and to stop multitasking. Another tip we’ve already seen is to leverage your commute for minor work tasks (which is technically multitasking).

And while this tip is also something we’ve seen before; we’d like to showcase it anyway because we think everyone should do.

Banish Distractions

Quartz says the average smartphone user gets 63.5 notifications per day. We think this figure is grossly understated.

Of course, this isn’t the only source of distractions out there. But it’s one over which we all have some control. Do you honestly need to know every time someone has commented on a topic you answered in a forum? Or can you wait for a daily digest? Maybe you can skip the notification 100% and just visit that forum whenever you feel like it.

Yes, we all want to know when our appointments are. And we need to know if family are ill or otherwise need us. But do we really need to immediately know how many people liked a tweet?

Go into your apps and any sites you visit, and fiddle with the notification settings. See what works for you. You’ll probably find you don’t need to know everything, all the time, ASAP.

Take back your life.

So, which one of our brilliant business tips was your favorite? And which one will you be implementing now? 

Work Place Mental Health Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Support work place mental health and treat your employees and customers right – plus nine other great tips this week.

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Building Business Takes a Lot of Hard Work, but it Isn’t as Hard as You May Think

The key to building business successfully is to set your business up for success in the beginning.  Everyone knows that the key to building anything strong is to have a solid foundation, and the same is true of building a business.

Building Business Means Setting Up a Strong Foundation and Following Through

No one wants to go back to the beginning to build a foundation. It is always best to take the extra time to build a solid foundation on the front end.  That usually takes some extra work and more than a few extra steps. While it’s true that building business is not for the faint of heart, this extra work is always worth it.  Here is how to begin setting up your business for success. 

Building Business: It’s all in the Plan

Not only is a business plan necessary when it comes to getting business loans, but it is necessary to the day to day operations of your business as well.  Virtually all successful entrepreneurs will tell you that a major key to success is to plan to work and work the plan.  

Most traditional lenders are going to need to see a business plan as part of the loan application process.    Truthfully, it’s best to hire a professional business plan writer if possible. They can work with you to get all the necessary information and put it together in the traditional  format.  

If you cannot hire a business plan writer however, there other options. The Small Business Administration offers a template, and your local small business development center may also be able to help.

building business Credit Suite3

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

For a business plan to be taken seriously by a lender, it needs to include the following: 

A Strong Opening 

 An Executive Summary

 This is a complete summary of the business idea. 

Description

The description goes into further detail than the summary, describing the business. This is where you work to build excitement about your business. 

Strategies

Layout your plan for getting started. Do you have a marketing plan, area in mind for location, or idea of how many employees you will start with? What is your ramp up plan? 

Market Research 

Market Analysis

This actually includes two parts. All that market research you did goes here: 

Analysis of audience

What need will your business fill, and for who? Are you a child care facility filling a need for affordable child care for working moms? Are you an eatery filling a need for a lunch spot for those working downtown? How will your business fill the need? All of that information goes in this section. 

Competitive Analysis

Is there already a business working to fill this need? Is there room for more? How do you plan to compete with them? 

If you are not a new business, this will be a market analysis that supports your need for funding, or that shows your business is strong and growing.

The Plan 

Plan for Design and Development

How is all of this going to play out, from start to finish. What steps are you going to take? This is more detailed than your strategies section.

Plan for Operation and Management

Who will own or does own the business and who will run or currently runs it from day to day. This could be as simple as stating that you are the sole owner and operator, or as complicated as laying out a complete partnership plan or board or directors’ format. It just depends on how your business works. 

Financials

Financial Information

This section includes current financials, projections, and a budget plan for the loan funds you are applying for.  Lenders need to see that you know how to handle the funds you get, and that you have a plan to pay them back.

Working the Plan 

Don’t fall into the trap of thinking the official business plan is only for lenders to help you get loan approval.  It isn’t. Your business plan should be a useable, practical tool that you can follow and refer back to. That is key to building business.   Are sales down? Refer to your plan. Struggling with cash flow? What does the plan say? Work the plan you worked so hard on and trust the process. Also, remember to revisit the plan occasionally even if things are going well to look for ways to improve it, or adjust it if necessary.

Building Business: Licenses

Do you need a business license?  What type of license do you need?  Ask yourself these questions and find the answers to begin building business on a solid foundation.  

Which Types of Business Licenses Do You Need?

If a federal agency regulates your business activities, you will need a federal license.  The Small Business Administration lists the following industries as needing a federal license.

    • Agriculture
    • Alcoholic beverages
    • Aviation
    • Firearms, ammunition, and explosives
    • Fish and wildlife
    • Commercial fisheries
    • Maritime transportation
    • Mining and drilling
    • Nuclear energy
    • Radio and television broadcasting
    • Transportation and logistics

The SBA also has a wealth of other information you need to know for starting your business, from help writing a business plan to finding funding.

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Building Business: What Funding Options are Available

There are a number of funding options available to help you when building business.  Which one you choose will depend on a number of variables. It’s likely the best option will be some combination of the many possibilities, including how fundable your business is.  We break them down for you below.

Traditional Term Loans 

These are the loans from traditional lenders such as banks and credit unions.  As a business, your business credit score can help you get some types of funding even if your personal score isn’t awesome.  That isn’t necessarily the case with this type of funding however. 

With a traditional lender term loan, you are almost always going to have to give a personal guarantee.  This means they will check your personal credit. You will need a personal credit score of 700 or higher to gain approval usually, with the best terms and rates coming at 750 or higher.  

Of all of the available business funding types, this is the hardest to get, but is also typically the option with the lowest interest rates and most reasonable terms.

SBA Loans

These are traditional bank loans, but they have a guarantee from the federal government. The Small Business Administration works with lenders to offer small business loans  that they may not be able to get otherwise based on their credit history. Because of the government guarantee, lenders are able to relax a little on the personal credit score requirements. 

In fact, it is possible to get an SBA micro-loan with a personal credit score between 620 and 640. These are very small loans, up to $50,000.  Personal collateral is also usually a requirement. 

 The trade-off with SBA loans is that the application process is long and involved. 

Business Line of Credit 

This is basically the traditional lender’s version of a business credit card. The credit is revolving, meaning you only pay back what you use, just like a credit card. However, rates are typically much better than a credit card.  The application and approval process is similar to that of a traditional term loan. 

If you need revolving credit and can qualify for a term loan, this is a good option. It is great for bridging cash gaps and covering short term expenses without the high credit card interest rates. 

There are no cash back rewards or loyalty points.  This makes some business owners prefer business credit cards despite higher interest rates. 

Invoice Factoring 

If you are an established business with accounts receivable, then you might consider invoice factoring. This is where the lender buys your outstanding invoices at a premium, and then collects the full amount themselves. You get cash right away, without waiting for your customers to pay the invoices.

This is a good option if you need cash fast.  It can also work if you do not qualify for other funding types. The interest rate varies based on the age of the receivables.

Non-Traditional Lenders

These are private lenders, not traditional banks and credit unions, that offer terms loans.  Usually they operate online. The difference between these and traditional lenders is that the loans have looser approval requirement and a much faster application process. Most often you can simply apply online, get approval in as little as 24 hours, and the funds are in your account within 24 to 48 hours after approval. 

These are an option if your personal credit isn’t terrible and you need money quickly.

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Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

Crowdfunding

Crowdfunding is a newer option for finding investors. While the average Joe that wants to start a business needs funding, it is not always possible to find one or two large investors. With crowdfunding, you can literally have a crowd of investors fund your business in $5 and $10 increments. 

There are many crowdfunding sites, but Indiegogo and Kickstarter are the most popular. The platforms are similar but there are some important differences. The most obvious is the timing of when you actually receive the funds that other invest in your company.

Find out more about each option here. 

Grants 

These are typically offered by professional organizations. There are some government grants available also. Competition can be stiff, but they are definitely worth applying for if you think you may qualify. 

While requirements vary from grant to grant, and most are only awarded to a certain number of recipients, this is an option is worth looking into if you fall into one of these basic categories. 

  • Women owned business
  • Minority owned business
  • Businesses run by veterans
  • Businesses in low income areas

 There are also some corporations that offer grants in a contest format that do not require much other than that you meet the corporation’s definition of a small business and win the contest. 

Business Credit Cards 

These get a bad rap, but in lieu of another option, they aren’t a bad option. The draw is that they are available to most, even if their credit score that isn’t awesome. The catch is, the lower the credit score, the higher the interest rate. Also, there are limits on how low they will go with a credit score. 

However, this is one type of funding that most of the general public is eligible for at any given time. They do a credit check, but your credit doesn’t have to be as high as it would be to gain approval for a traditional loan. 

 The downside of business credit cards is that they typically have a high interest rate. The upside is that many of them offer rewards in the form of cash or points that can be helpful. 

Building Business: Marketing

Once you have your foundation set, you have to actually build up the business.  That means getting others to buy whatever you are selling. Marketing is a term used for getting your product and service out there for others to see.  

The number one beginner tip for marketing is to know who you are marketing to.  You need to know what types of people will be buying your product so that you know how to convince them they need it.  This step was probably taken care of in the marketing section of your business plan.  

How you market will vary based on your budget, but these days social media marketing is huge.  It’s a lower cost option than traditional television and news print, yet highly effective. If you can get just one post to go viral, you’ve done something.  Get people talking about your product on social media and your marketing could basically be done for you, depending on what you are selling.

Of course, there is still a place for, and even a need for, traditional marketing when building business.  Generally speaking, the best bet is to hire a professional to handle all aspects of marketing.

Building Business: Networking

This is an aspect of building business that so many do not really think about until after the fact.  It can have a huge impact though. Of course, these days, as with marketing, much networking is done online through social media channels. There is something to be said for face to face connections however. 

While much of your business may be run online, limiting face to face interaction, take some time to consider ways to connect locally.  There could be those that need your services or product right in your area. Try joining your local chamber of commerce. They typically have events like business after hours that support this type of networking. 

Building Business Isn’t Hard, but it Does Take Work

Building a successful business takes a lot of hard work and a lot of luck.  Things can go wrong, even if you do everything right. You have to have a business plan, find funding, nail marketing, and work at networking.  However, if you set yourself up for success in the beginning, work hard, and don’t lose momentum, you may end up with something fabulous.

 

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