Protect and Improve Your Business Credit Score

Protect and Improve Your Business Credit Score

When you own a business, there will inevitably come a time when you need to access credit. Whether it’s because you need to invest in new equipment or you want to expand, being able to borrow money can mean the difference between reaching your goals or struggling to get by.

While there are several additional options for getting the necessary funds for your business, that doesn’t mean that you shouldn’t worry about your business credit history and score.

In fact, protecting and improving your business’ credit report should be a top priority. Even if you are just operating a small enterprise out of a spare bedroom, the way you manage credit is still important. In fact, even just an average score can cost your business thousands of dollars over time. To ensure you not only qualify for loans and credit when you need them – and that you get the best possible rates – consider these strategies.

1. Establish Your Business Officially

By incorporating your business as an LLC or C-Corp, and then setting up all accounts in that name, is smart business for several reasons. Establishing yourself as an “official” business entity via an LLC gives you more flexibility with your taxes (although not necessarily tax breaks) and does limit your own liability should the business be sued or go bankrupt.

In terms of getting credit, establishing your business as an LLC or C-Corp allows the business to stand on its own (meaning that your personal credit history is not considered when you apply for a loan) and tells lenders that you are a “serious” business.

It seems like a small thing, but lenders want to know that you are a real business. Therefore, establishing your enterprise as a legal business entity with its own tax ID number – as well as creating a professional image with a descriptive and thorough website – presents an image of credibility and stability.

2. Pay Your Bills

It seems simple, but paying your bills on time, every time, is one of the most important factors in determining your credit score. In fact, paying bills early is even more beneficial, as it indicates that you don’t carry balances and have good money management skills – not to mention it can save your business money in excess fees and interest.

That being said, if you rely on customers to pay invoices to maintain cash flow, paying your bills can be challenging. If cash flow is an issue, consider using alternative forms of financing such as factoring receivables to ensure that your bills are paid on time and in full. You don’t need a long credit history to qualify for factoring, and the upfront cash can help maintain your company’s good standing with the credit bureaus.

3. Manage Accounts Well

Paying on time is an important factor in your credit score, but it’s not the only factor. Credit utilization is also important. Ideally, you should aim to use less than 30 percent of your available credit. The more credit you use – and the higher your balances – the lower your credit score.

Again, factoring your invoices can help reduce utilization and keep your score high. It’s also helpful to keep all your accounts open, even if you don’t use them. Closing accounts that you don’t use reduces the overall amount of available credit, and subsequently increases your overall utilization. Instead, keep accounts open – and consider using them occasionally and paying off balances immediately – to boost your score.

business credit score

4. Be Diligent About Monitoring Your Report

Studies show that an inordinate number of credit reports – nearly 80 percent – contain errors, with almost a quarter of all errors severe enough to render you ineligible for credit entirely.

Carefully monitor your credit report by requesting copies annually, and subscribing to a credit monitoring service that will alert you to any changes. Correcting inaccurate information is the fastest way to improve a score, so if your report contains errors, fix them immediately.

5. Run a Tight Ship

The best way to keep your business afloat – and avoid credit problems – is to run a tight ship. When lenders look at your application for a loan, your credit report is only part of the story. If you operate a lean business and avoid overspending by using your resources wisely, lenders are not only more likely to view you as less of a risk, but you’ll also need to borrow less and use less credit.

Maintaining good credit is an important part of running a healthy business. It might take time, but with diligence and good decisions, you can have a great score and access to the money you need, when you need it.

The Most Affordable Communication Tools for Small Businesses

The Most Affordable Communication Tools for Small Businesses

Small businesses and start-ups are taking over the world of modern business, with Forbes reporting over 28 million small businesses in the U.S alone, with many more overseas. Many of these companies are in the IT sector and can make millions of dollars each year.

Even so, companies which are just starting out need the most affordable tools they can find, and even established companies need the smartest investments they can find in order to decrease their overheads. Let’s review what are the most affordable communication tools small business owners can use and how those tools can be of great benefit to budding entrepreneurs.

1. Online Calendars

The diary or file-o-fax was, and still is, commonly used to keep businesses organized and to arrange appointments, but online calendars and organizers make it even easier. First of all, it means that people can check and update their schedules from wherever they are, frequently through use of their smartphones. Secondly, there are collaborative programmes which are accessible for every member of the team, or which customers can use to see your availability and make appointments without having to call you personally.

2. Video Conferencing Software

More and more companies are relying upon remote workers and are using online video to keep in touch with each other and find new clients. Business video conferencing for IT companies such as BlueJeans typically require a monthly subscription fee which allows access to online meetings, cloud storage, and group seminars. This can come in useful in numerous areas from creating marketing content to hiring remote workers, so it is a fee which pays for itself easily with the opportunities it opens up.

The best advantage is that modern systems don’t require expensive hardware upgrades and are accessed through the internet, meaning they can be used on any compatible device including mobile devices. So long as your company’s building, or wherever you will be working from, has a good internet connection, you can use it to open up many new lines of communication that wouldn’t have been possible before.

3. Collaborative Text Editing

Once upon a time, collaborating on a document together meant constant e-mailing files back and forth to each other. Before that, it sometimes even meant physically mailing floppy disks, waiting days or even weeks to read the other person’s edits. The only other option was making long and expensive phone calls, which according to this article in the BBC magazine, is how authors Neil Gaiman and Terry Pratchett worked together to write Good Omens.

Thankfully, advances to technology have made these a thing of the past. Not only has video conferencing replaced phone calls as a cheap alternative, online file sharing and text editors such as Google Docs mean that files can be easily shared securely and edited by two or more people, with the edits visible in real time. Comments can be left to address certain issues and previous edits can be made visible and brought back if necessary. It can greatly cut down the amount of time it takes to complete a collaborative document with minimum stress.

4. E-Mail

With so many recent technology upgrades, even e-mail is starting to feel somewhat archaic, with many companies choosing to not even sign up for e-mail, preferring to use online conferencing instead.

But this option isn’t for everyone and even the most technologically advanced company may find it useful to log into their e-mail regularly. Sometimes it is essential for reaching more old fashioned clients who still prefer e-mail over other communication methods, or haven’t yet upgraded to video conferencing. At other times you may find it a more ideal way to send out documents such as invoices or sending short messages without the pressure of making formalities during a call.

Most job seekers also use e-mail to make contact with potential new employers, as unsolicited calls are rarely welcome. If you do decide you want to use e-mail to at least some capacity, find a provider which works for you, perhaps even creating your own domain name to impress potential clients.

5. Website

Considering this will be the first place potential new customers or clients go to find information about you, a properly designed website is essential as a way to introduce yourself, make your pitch, and give an idea of what you do and can provide to others. Be sure to make your contact details clear on every page and to include all of the communication methods your target audience prefers to use.

The Bottom Line

Communication is more important than ever in business, be it communication between colleagues or between a company and its customers. Thankfully, there are many tools at your disposal which can be used for low prices, and often for free. Make the most out of your communication tool investments and your new start-up will thrive.

Image Credit: John S. and James L. Knight Foundation

Is Shadow IT Lurking in Your Small Business?

Is Shadow IT Lurking in Your Small Business?

Do you identify as being someone who doesn’t put their full trust in the company IT department? Maybe you don’t appreciate their snark when you’ve asked them for help with troubleshooting. Maybe they procrastinate on media projects and your company’s brand is suffering as a result. Whatever the reason, you’ve entertained the idea of downloading Shadow IT and uploading it on your company’s network. You’ve read that Shadow IT or Stealth IT gives users the control they’re looking for without ever having to rely on the IT department again, but is it good for business?

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5 Executive Hacks to Help Your Business

5 Executive Hacks to Help Your Business

Business is booming. That’s good. It’s also bad. It’s hard enough to keep up with the customers, but trying to manage employees on top of client services is just downright overwhelming. Aside from directing personnel, there’s also clerical work, recruiting, and technology hurdles to clear.

Many dreamers create or jump into a small company because of the intimacy provided and the fulfillment of building something from the ground up. As with any successful firm though, growth will eventually require a transition to a more corporate mentality. Keeping pace with clientele is only possible if staff increases. And when manpower balloons, the resources to support the team must also develop. Luckily there is help.

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How IT Teams Can Learn from Other Businesses on Conducting Meetings

How IT Teams Can Learn from Other Businesses on Conducting Meetings

Bad meetings can turn your IT team against these conversations forever. If your employees are disinterested, scrolling through their mobile phones, or show any other signs of weak engagement, then you might need to take steps to change that. Here are seven tips from other businesses on how you could turn those meetings from bad to good.

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Three Business-Building Techniques That Will Keep Your Company Moving Forward

Three Business-Building Techniques That Will Keep Your Company Moving Forward

In this contemporary era, many business owners are realizing that they face more competition than ever. Factors such as online shopping and globalization mean that consumers now have a wide range of businesses to choose from when it’s time for them to invest in the products and services they want. Luckily, there are several business-building techniques that corporate leaders can implement to keep their companies moving forward despite increasing competition. Here are three of them:

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4 Essential Steps to Launching a Successful Business

4 Essential Steps to Launching a Successful Business

Hundreds of new businesses are launched across the nation each day as entrepreneurs strive to achieve their dreams of owning and successfully operating their own company. While some triumph, others are not so lucky. In fact, the Bureau of Labor Statistics reports that even though the creation of new businesses has been on the rise since 2010, the success rate is falling just as sharply. If you are in the early stages of creating a business, there are several steps that you should take that can increase your chances of succeeding, both initially and in the long run.

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Manage Your Online Reputation in Multiple Languages

foreign languagesE-marketers are now more aware than ever of the difference that a good online reputation can make. To create and manage your web reputation, you need to get involved in digital spaces, communicating with existing and potential customers and, just as importantly, listening to what people say about your products or services.

English is not Enough

For businesses hoping to expand into markets overseas, naturally, you’d also want to manage that precious online reputation in languages other than English to claim your stake in foreign-language online spaces and garner feedback about your brand. After all, only one in almost five of all internet users is a native English speaker, so if you’re only communicating in English, you’re missing out on a large market.

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The idaconcpts way to solve a Harvard Business School Case: Collabrys, Inc.

As you may have read in the About the author section, I am enrolled in the Master of Business Administration at the Shidler College of Business at Honolulu, HI.  A very common question that I get all the time is:  “so…what do you do?”  Well, one of the most common assignments that we get is to solve business problems given a specific context.  This context is usally found within Harvard Business School cases.

So how do you solve one?

Let’s give it a try!

Today we will use the idaconcpts way to solve the Collabrys, Inc. case from the Harvard Business School.  Unfortunately I cannot post the PDF file because I would infringe their copyrights.

According to the Harvard Business School, this is the scenario:

The CEO of a two-year-old start-up must now decide whether to become a technology provider or a service agency. In a time of enormous uncertainty about the viability of various business models for Internet-delivered services and products, Collabrys has survived the burst Internet bubble by partnering with brand-name large companies and by responding to market feedback. This case traces the company from its earliest days and its original value proposition to a point at which the two very different future strategies appear feasible. Originally funded by venture capital, the company has changed key personnel, experimented with different distribution and partnering schemes, developed some sophisticated intellectual property, and raised a second round of funding.
Here is my take on the Collabrys, Inc. case:
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I.    Situation Analysis
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Collabrys, Inc.’s situation is a textbook example straight out of the pages of Steven Gary Blank’s book The Four Steps to the Epiphany because of the company initial focus on the product development process rather than on the customer development process.  During the dot-com era, and some still today, Internet startups fail to understand that the most common source of failure for startups is a lack of customers and not a lack of product development.  Collabrys was good at managing its product development, but terrible at managing its customer development.  Let’s review what is wrong with the product development process as a business model:
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Sales, Marketing, and Business Development in a Startup.  Power Point Presentation.  Retrieved on 09/18/08 from www.stanford.edu/class/msande273/resources/Blank%20presentation%20101403.pdf
Steven G. Blank , 2003, The Customer Development Model: Sales, Marketing, and Business Development in a Startup. Power Point Presentation. Retrieved on 09/18/08 from http://www.stanford.edu/class/msande273/resources/Blank%20presentation%20101403.pdf
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The flowchart  above indicates the main problem with using the product development process as the cornerstone for an Internet startup is that it does neither generate customer demand nor sales until after a considerable amount of cash has been spent on building capacity and marketing campaigns.  Even Collabrys’s MVP manager, Villapando-Ibalio, found it difficult to explain the potential for BrandPrint to potential clients and Collabrys always encountered the question:  “What can I do with BrandPrint tomorrow that is different from what I do today?”  Obviously the company failed to solve an existing problem because it was still using the same outrageous sales projections from its written business plan from the financing rounds and it failed to understand that what it needed to do is to provide customers a solution for a problem that was critical for them and eating away their profits.  Collabrys’ sales deteriorated over time because it was not able to answer the following questions:
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  1. What are their customer’s top problems?
  2. Does Collabrys’ services concept solve these customer’s problems?
  3. If Collabrys was to offer its services for free to its clients, will they still acquire them?
  4. If Collabrys was to charge for these services, does it have a repeatable sales model?

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II.    Problem Definition
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Collabrys does not have a repeatable sales model because it failed to address its potential customers’ top problems, its customers did not agree that its current service offering added value, and its customers were not willing to pay for a service that did not offer a solution to their problems.  Collabrys did not have a proven sales roadmap previous to product concept development, did not understand the sales cycle of its customers, and did not have a set of orders that validated its sales roadmap.  In conclusion, Collabrys had a financial model that did not make sense.
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III.    Analysis of Alternatives
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Collabrys alternatives all aim to the customer development process:
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//www.stanford.edu/class/msande273/resources/Blank%20presentation%20101403.pdf
Steven G. Blank , 2003, The Customer Development Model: Sales, Marketing, and Business Development in a Startup. Power Point Presentation. Retrieved on 09/18/08 from http://www.stanford.edu/class/msande273/resources/Blank%20presentation%20101403.pdf
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Unfortunately for Collabrys, the company had already burnt a considerable amount of its funding to realize that it needed to validate a repeatable sales model before it could build a whole company around it.  The two alternatives were either for Collabrys:
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1.    to become an analytics software company
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or
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2.     to use the technology in-house, but as part of a service provision.
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Either of these solutions would have to provide a repeatable sales model to essential clients with these characteristics:
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•    Has a problem
•    Know they have a problem
•    Has been actively looking for a solution
•    Has put together a solution out of piece parts
•    Has or can acquire a budget
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Given the previous communications with clients, it was clear that Collabrys needed to establish a clear difference from other CRM applications in the mind of clients and that Collabrys should not spend time focusing on groups that did not have a clear idea of their problem, did not actively look for a solution (as opposed to explore options), and did not have access to a purchasing budget at all.
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IV.    Recommendations
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The second alternative, to use the technology in-house, but as part of a service provision. provides the right approach through the search of specific answers for the critical questions:  What are we selling? What are its benefits?  Who do we sell to?  At what price?  The creation of  the Tiger Team should have been the starting point for Collabrys and the cornerstone of its business model, because it focuses on the prescribed customer development process of Blank.  The process of contacting all existing partners and 35 potential clients to determine the budget of clients, necessary client interaction (e.g. sales cycle), existing competitors, and price ceiling of clients, would provide Collabrys with a clear idea whether clients are serious enough to buy a service that still needed some tweaking.  The Tiger Team process clearly addresses the customer discovery and customer validation sections of the customer development process, which in turn would allow the company to set realistic year-one objectives according to its market type, position the company and service, and create repeatable, sustainable demand.
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By focusing on being an agency that provides managed solutions for companies during their product launch an introduction and targeting the sales process to brand managers (instead of interactive marketing managers, market research people, or advertising agencies) the company will be able to make more efficient use of its resources and channel management and sales personnel to profitable activities.
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This option is less likely to lead to either an IPO or sale of the company, but it provides a clear spending plan, establishes that the current team is right for this stage of the company and provides a clear sales growth plan.  The company would now have the right mindset and tools to establish the goals for the next twelve months.   A main concern of this recommendation is whether or not existing competitors can replicate Collabrys service provision, because there is not enough information on the case to establish a valid conclusion.
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What do you think? : )

Note: If you are a current MBA student and are planning to use this as a reference, go ahead! But please include me in your references section.

Lateral Marketing and The Tipping Point – Part 4: Introducing Blink

• Given the higher failure rate of products and the saturation of marketing channels, it is necessary to improve the understanding of the innovation process in order to better meet the customer’s needs and to launch to market ahead of the competition.

• I agree that innovation requires a different approach that goes beyond the category where the idea originated and that there are special kinds of people needed for this process. Kotler and Trias de Bes (2003, p. 104) indicate that “the logic of creativity consitsts of taking an element, displacing laterally one aspect of it, and connecting the gap that has been provoked. The logic of creativity follows a process similar to that of humor”.  Below are three pictures of an innovative sculpture that combines the work of two my favorite artists, Salvador Dali and Albrecht Dürer.  This sculpture is located at a hotel nearby the Nagoya airport in Japan, notice that Salvador Dali sculpted this based on Dürer’s Rhinocero’s woodcut.

Me
Photo Credit: Me
Me
Photo Credit: Me
Me
Photo Credit: Me

•Lateral marketing uses the power of context and the stickiness factor concepts of Gladwell to create “a simple way to package information that, under the right circumstances, can make it irresistible” (Gladwell, 2002, p. 132). The case of “Big Brother” TV Contest in the United States and the Sony Walkman in Japan are good examples of well-executed lateral marketing.

• The three steps of lateral marketing are (Kotler and Trias de Bes, 2003, p. 104):
o Choose a focus where we want to generate a lateral displacement.
o Provoke a lateral displacement for generating a gap.
o Think about ways to connect the gap.

• Kotler, author of the 4Ps, wouldn’t pass the opportunity to include them in the process described above and defines the three main levels of lateral marketing as 1) the market definition level, 2) the product level, and 3) the rest of the marketing mix level.

• I found the example of the creation process for the artificial flower was great. In this series of talking points, I have discussed the similarities and differences between “Lateral Marketing” and “The Tipping Point”. However, I think that another work is more appropriate for chapter six of Lateral Marketing. “The Tipping Point” was concerned with grand themes, with figuring out the rules by which social change happens. “Blink” is quite different. It is concerned with the smallest components of our everyday lives–with the content and origin of those instantaneous impressions and conclusions that bubble up whenever we meet a new person, or confront a complex situation, or have to make a decision under conditions of stress.

Photo taken from the author's bio section at www.gladwell.com by Wiley Chin.
Photo taken from the author bio section at his website by Wiley Chin, http://www.ximnet.com.my/thelab/comments/comments.asp?id=80.

• “Blink” is a good read, especially for the second step of the lateral marketing process, making a lateral displacement on one of the three main marketing levels through substitution, inversion, combination, exaggeration, elimination, and reordering. This process is more like brainstorming. “Blink” is a “book about rapid cognition, about the kind of thinking that happens in a blink of an eye. When you meet someone for the first time, or walk into a house you are thinking of buying, or read the first few sentences of a book, your mind takes about two seconds to jump to a series of conclusions”.

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Photo Credit: Amazon. http://images.amazon.com/images/P/1586217615.01.LZZZZZZZ.jpg

• The hardest part about the process of lateral marketing is the last step, that is solving the gap of the lateral displacement with a value proposition that will result in either: 1) same product, new utility; 2) new product, new utility; or 3) new product, same utility. The further reprocessing of the marketing mix is about dealing with small details that make a big difference. This is the same objective of “The Tipping Point”: “how a number of relatively minor changes in our external environment can have a dramatic effect on how we behave and who we are” (Gladwell, 2002).