
Increase Revenue With These 10 Easy-to-Follow Steps
You should have a good understanding of your market and your customers’ needs and motivations, and any new effort to increase revenue should be driven with this in mind.
Building business credit is crucial for company owners wanting more for their firms. Delayed or insufficient financing is the second most typical reason companies fail, according to the Small Business Administration (SBA).
By building your business credit, you’ll have access to sufficient financing to:
Doing the work to build your business credit will help open up more opportunities for your company. Lenders, suppliers, and bankers rely on business credit reports to analyze your company’s creditworthiness. By establishing and maintaining healthy business credit, you help safeguard your company, making it possible to access the funding you need.
To know why it’s important to build business credit, it may help first understand what business credit is. Like personal credit, business credit is used by credit card companies and lenders to decide whether your firm can be relied on to manage its money and pay obligations on time.
You can think of your business credit report as a barometer for the economic reputation of your company. Like your personal credit profile, your business also has a grade, or credit score, that you should be aware of so that you know how to improve it.
Several reporting agencies generate business credit scores, and each uses a different model. Though the numbers typically range from zero to 100. The higher your score, the lower your expected risk. A decent rule of thumb is to build your score to at least 80 and keep it there.
The primary business credit bureaus are Experian, Equifax, and Dun & Bradstreet, and each uses different score calculation methods and indicators.
The FICO Small Business Scoring Service (SBSS) ranks companies on the probability that they will make on-time payments. SBSS scores are utilized for lines of credit, term loans, and SBA commercial loans up to $350,000.
Their scores start at zero and can go as high as 300, though the higher your score, the better. You need a minimum score of 140 to pass the SBA’s pre-screen process.
Though there are many ways to get funding for your business, building your business credit can give you access to standard financing methods, including:
Having a credit score of 80-plus opens doors and allows you to qualify for a small business loan much easier. Companies with stellar credit scores can usually meet the requirements for a standard loan quickly and painlessly.
Favorable loan terms will generally always go to companies that can prove their creditworthiness. For example, you could use your excellent credit to leverage a lower business credit card rate and save your business thousands of dollars.
Building business credit is great for keeping your personal and business finances separated. Doing this protects your business from financial issues you may be encountering in your personal finances and the other way around. However, it’s still crucial to monitor your personal credit report since lenders may want to look at your credit score.
Building your business credit is not only helpful for company financing, but it also looks good when negotiating credit terms your suppliers provide. Your suppliers will see your company as financially stable and able to cover debt obligations promptly.
When you buy more equipment and inventory, your clients may be more comfortable forgoing payment and letting you buy on credit.
If you decide to grow your operations, taking out a loan will allow you to expand more than you had first intended. Whether your expansion includes more inventory, equipment, or new facilities, a loan can help you start.
Building and improving your business credit score takes time — 12-18 months, according to some sources.
Along the way, it’s a good idea to understand the things that may affect your business score, including:
Your business credit profile isn’t confidential, which means anyone can view your report. Therefore, if you can, you should establish and sustain robust business credit from the beginning. Take time to create healthy financial habits, including:
Want to be the first to know when they launch?
You should have a good understanding of your market and your customers’ needs and motivations, and any new effort to increase revenue should be driven with this in mind.
Below is a list of the most affordable and easy-to-use accounts payable and receivable software programs available, giving small business owners one less thing to worry about while managing their company.
A bit of research into the best banks for small business could wind up saving you significant money — for instance, nearly half of small business owners reportedly pay unnecessary monthly fees. So consider these options as you determine which bank best suits your small business.
Your business needs a loan. Maybe you are just getting off the ground or needing capital to fuel an expansion opportunity or fund your next big project while waiting for customers to pay their invoices. Whatever the reason, you will need to make a good impression to have a shot at a traditional bank loan. […]