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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Top Ways to Make a Business Partnership Last for the Long Term

Top Ways to Make a Business Partnership Last for the Long Term

When you take a look at some of the most successful businesses over the last few decades, you’ll often see that they were created by partnerships. Just consider Google, Microsoft, and Apple, to name a few.

While it doesn’t always take a partnership to build a global venture that lasts, having a solid relationship with a cofounder can really make all the difference when it comes to long-term success. Having a partner means more support, more ideas, and more skills and experience are brought to the table — but only if it works out.

If you’re keen to create a lasting partnership for your next or current business, it’s important to go about it the right way. Read on for some top tips you can follow today to help you make sure your professional relationships are as successful as possible.

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5 Big Business Concepts That Startups Need to Steal

5 big business concepts that startups need to steal

Most people understand that running a small business is a completely different experience than running a major corporation. However, despite smaller budgets, smaller teams, and a different playing field, many of the business principles that form the operational foundation for large companies apply to small businesses as well. In fact, there are several concepts that will benefit even the smallest businesses.

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Email blasts – the right (and not annoying) way to do them

email blast[Elysabeth Teeko likes to dabble in all kinds of blogging. She especially loves to stalk new tech and internet marketing news, as well as study interior decorating and other home-esque subjects. You can find her on twitter; @Elysateek.]

Email blasts- the right (and not annoying) way to do them

Email blasts, the epicenter of the direct electronic marketing world, are a popular tool that many businesses use. Because of the misuse of this tactic by a large number of companies, the approach has gained an unseemly reputation. Most people will simply discard emails that look like they originated from an email blast, and even the ones that are opened only rarely prompt the reader to act. So, how can you use the email blast technique correctly and effectively?

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