Thursday, September 30, 2010

How Do You Build Business Credit?

How do you build your business credit?

Here’s what Wells Fargo Bank (now the owner of Wachovia Bank) has said regarding Separating Personal and Business Finances...

"The longer you delay establishing business credit,
the longer you delay taking advantage of business loans."

By strengthening your business credit, you will not have to use the owner or shareholder(s)’ guarantee(s) for loans, leases, credit cards and other sources of debt financing. If your company has a strong operating history and financials to support this, you can build your credit. If you have not already done so, do the following as soon as possible to build your small business credit:

  • Make sure you are registered with Dun and Bradstreet and have a D&B number. Then sign up for the free self-monitoring system.
  • Obtain credit cards from Staples, Office Depot or other office product provider up to the amount allowed with no guarantee. Use these cards to purchase your office supplies.
  • If you have lines of credit with any of your vendors or suppliers, ask that they report this information – and your performance - to D&B. If you do not have any lines of credit, ask for them.

o Each year, see if you can increase the size of the credit line. Make sure you use it as appropriate to keep the credit line there. (i.e., If you have a $50,000 credit line but always pay within 10 days by check, your credit line will disappear. You should place your orders using the credit line, then pay off the credit line every 30 – 60 days.

  • If you have a bank or other financial institution business loan, even if it is guaranteed by an individual and another corporate entity, make sure that the loan is reported on the COMPANY’S credit report. Properly paying a bank loan can very positively impact your credit.
  • Check your D&B report quarterly, but no less than annually. Make sure that any loans, leases, or other debts showing are correct. Many times entities report when they file a UCC but don’t report when the loan is paid off. So what’s showing on the company’s report will make it seem like it has a higher debt ratio than it actually does.
  • Pay your suppliers within their specified terms. Make sure that you are working with at least 2 suppliers who report to D&B and/or Experian. Otherwise, your great payment record is completely unknown.

In addition, you should have a business plan. The bank will look at the company’s credit profile, its financial history, financial projections, and the business plan.

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Friday, September 24, 2010

Small Business Owners & Non-Profit Board Participation

This may seem a little unrelated to small business finance and management, but bear with me. A few years ago a couple of people recommended that I step up my involvement in non-profits via board participation. I wasn't ready. I had too much going on and too little time to dedicate. I wanted whatever time I did spend volunteering to help the recipients directly. So I tutored, mentored, and occasionally spoke at churches and non-profit conferences. This past year I finally had the time...and the inclination.

Why did this people recommend participating on boards to me and why do I recommend it to you as a small or medium-sized business owner? First, I believe it's important to give back to the communities in which you and your company(ies) operate. Giving back helps to balance the overall mission of a company and deepens the company's commitment to engaging with its customers and employees. Second, board participation affords the opportunity to interact with high career (other owners, VPs, SVPs, executive directors, C-suite level) individuals who have backgrounds and perspectives different from your own. This difference in perspective can help you view your company's issues in a different light and that alone can be very valuable. Third, assuming the board has good synergy, you build a sense of team and strengthen your network. That network can assist you as you grow the business organically, offer new products or services, or seek out acquisitions. You never know who may be able to make an introduction into an account you'd like to have or connect you to a prospective partner.

Finally, non-profit board participation can help you grow as a leader. As an owner and typically, the CEO and/or president, especially if you are the sole owner, you may not be as adept at working as part of a team of peers as you used to be. Participating on a board will enhance your team skills. It will also increase your knowledge of a number of functions: marketing, finance, legal, employee relations, etc. that are directly relevant to running your business.

If you decide you would like to sit on a non-profit board, seek out those that address causes you have a passion for or provide the types of services you're really interested in. If you love sports, you would be bored sitting on a homeless shelter board but participating on a pop warner or little league board would be a good fit. Be aware that most, if not all, non-profits have a minimum donation requirement for directors. Sometimes that's $500 or $1,000 for smaller non-profits. For large non-profits like hospital boards or the United Way, the miminum ndonation requirement may be $25,000 or higher. (This is why you often see VPs of large corporations as the primary members of these boards.)

If you are not sure where to start since there are literally thousands of non-profits in any large metropolitan area, start with United Way. They provide funding to tens of thousands of non-profits nationwide. They will have a list of non-profits in your area that fit your criteria.
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Thursday, September 16, 2010

NYC Financial Services Professionals Opportunity

Normally I don't write about jobs. This is a blog about small business financing and related management issues. However, the opportunity listed below may help some service professionals transition into working as CFO or Controllers for small to medium businesses. So this may also be a recruiting opportunity for small business owners. The graduates of this program will have made the transition from corporate worker to small business employee, which could be highly beneficial to owners on the hunt for financial talent. This was posted on a group discussion I belong to and I thought it was worthwhile to pass it along.

JumpStart NYC - a unique program for Financial Services Professionals who have lost their jobs.

JumpStart NYC is now accepting applications for its unique program for unemployed NYC residents who previously worked in the Financial Services sector.

BACKGROUND: JumpStart NYC is a free educational program to help former financial services workers find new jobs by re-tooling them to either work at smaller firms and/or in new industries. The program includes both a week-long “boot camp” classroom component (with a second, optional week exploring Green Finance and Technologies), and a 10-week action-learning project in a NYC business. Participation is completely free.

Please see below for the dates for the next JumpStart NYC session. RSVP for the information session at: or at . You can also learn more about this program and submit your application via the latter link. Applications will be accepted on a rolling “first-come, first-served” basis.


  • October 1st (Friday): Applications due by 5 p.m.

  • October 18th (Monday): “Boot camp” starts. Ends on Friday, October 22.
  • October 25 (Monday): Green Finance week starts. Ends on Friday, October 25.

For more information, visit the program sponsor's website at

or email

Good luck!

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Tuesday, September 7, 2010

Stretch Your PR Budget. Hire Interns!

Now that I've addressed the benefits of hiring interns, let me share with you some additional benefits of hiring college interns, specifically marketing and public relations interns.

Let's say your small or medium business has a limited budget but have crafted a marketing and public relations plan to help move your business to the next level. However, you wonder where you are going to access the funds needed to roll out this plan. You think you can keep your costs to a minimum and essentially boot strap. However, you still need bodies to staff some of your speaking events, trade shows, demonstrations, etc. and to send to PR-opportunistic events such as sporting events or free conferences. You also need someone(s) to put more content out there on the web for you to help generate PR.

You need PR interns. I've used these students before and, as long as you are very clear about what you want them to do, they are great. The earlier they are in their college career, the more hand holding you will typically have to do. This makes sense as a senior will usually have a lot more experience than a sophomore. Check the universities and community colleges in your area. Many schools offer college credit for PR and/or marketing internships. With these college-credit internships in general, the students' services/job experience are provided for free. Reason: They can't get college credit AND get a paycheck. You just pay their incidentals like gas or train fare and, of course, any business-travel incurred costs.

If you are pursuing students for a summer internship, you can also advertise for PR interns on craigslist in the "gigs" section. I've had some decent responses here. If you live in or near a major metropolitan area, many students will look for summer jobs and internships in their hometown on craigslist. However, I still think the best ones come from posting the internships at the respective colleges either through their study program or the career center.
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