Business Credit Article #2

5 Big Mistakes to Avoid When Building Business Credit

There are countless entrepreneurs today operating their businesses in a manner that puts them at great personal risk-risk of being hounded by creditors, poor financing offers on new cars, and even losing their homes. The risk stems from poor money and credit management.

Many business owners are completely unaware of the mistakes they are making, and those who are aware may not understand what they need to do to change. Fortunately, the answer to these problems is simple: avoid these 5 Big Mistakes and start paving the way toward building good business credit, with little or no personal risk.

Mistake #5: Putting Personal Assets at Risk

If you personally guarantee any credit extended to your business, you seriously risk your personal assets, such as your car, savings account, and your home. The most common way entrepreneurs fall into this trap is by setting up their businesses as a Sole Proprietorship. If you have not set up your business as a C-Corporation, S-Corporation or a LLC, then you most likely do not have a tax i.d. number; instead your business is tied to your social security number. This also means you do not have the legal means to separate your corporate credit from your personal credit. If you incorporate your business, you can protect yourself from personal liability.

Mistake #4: Not Paying Bills on Time…100% of the Time

Everyone who has some type of credit file also has a credit history attached to it, and having just one late payment on a line of credit can be held against you for years. This is vital information for entrepreneurs who are working toward building good business credit. Even if you have separated your personal and business credit lines, one late personal payment could affect your corporate credit, and your business’s growth.

Mistake #3: Not Building Corporate Credit the Right Way

Incorporating your business should be a first step toward separating your personal credit from your business credit, but it does not automatically qualify you for corporate credit. Your goal for building business credit is to secure lines of cash credit, not just vendor credit. You will need money to grow your business, and lots of it. The best way to start the process of building business credit is to maintain a physical office (not a PO Box!), obtain a local phone number and 411 listing, and secure a business license. After these steps have been taken, you can begin to build a credit score with business credit bureaus.

Mistake #2: Rushing the Process of Building Business Credit

Just as it took time to build your personal credit, so too does it take time to build good business credit. The goal for building credit is to get cash, but added to that goal is to get cash without a personal guarantee. The industry standard for building business credit and securing cash loans without personal guarantees is two to three years. Do not rush your ultimate goal.

Mistake #1: Using Personal Credit to Finance Your Business

The absolute biggest and most common mistake business owners make is using their personal lines of credit to finance their businesses. This includes paying business expenses with personal credit cards, “borrowing” money from personal savings and investment accounts, and securing personal loans to finance business expenses and expansions. This big mistake lowers your personal credit score because every lending inquiry into your credit history lowers your credit score; it reduces the amount of credit available for personal use because your debt-to-income ratio skyrockets. And should your business fail (as 95% do in the first five years, according to the Small Business Administration), you will be personally liable for all those “personal” loans. You do not have to risk your lifestyle for your livelihood.

There is an excessive amount of traffic coming from your Region.


Internet Network Marketing Business – Success Or Failure – It’s Your Choice

Master Internet Attraction Marketing Methods Before You Join a Business

What I have to say today is somewhat controversial. But bear with me. This could be the difference between having a very successful internet marketing business and one that fails.

This message is primarily addressed to those who are considering joining a network marketing business and those who have been in a home based business before and are considering coming back.

My strong recommendation is that you learn how to market a business first before you actually join one. The purpose of this article is to explain why I feel that way.

What I just said is probably not a popular idea with you. It could be considered controversial.
Let’s look at the reasons why you want to start your own home business. Most of our reasons fall under one general category. We want to move from a situation that is not working to one that has the potential of working.

In most situations, you probably want to make that move as soon as possible. I know. I have been there.

Here’s How I Started In Network Marketing – It Didn’t Work

As I approached my retirement age a few years ago, I realized I could not afford to retire. I knew it would take some time to transition from my Chief Financial Officer position into having a successful enterprise of my own.

But I was desperate to make the move and jumped right into my own network marketing opportunity. I failed miserably. The reason? I knew absolutely nothing about how to market my business. I thought I could learn as I built my business. I thought my company could teach me effective marketing methods. Neither one of these things happened.

I should have learned marketing methods that would work for me. I don’t mean to just read about the methods. I mean to study them – to master them.
There are far more effective marketing methods today than when I started in this industry. There is a stark difference between marketing methods taught by MLM companies in the past and the attraction marketing methods available today.

Most MLMers Get Bad Advice From The Start

Many companies are starting to teach attraction marketing, but I have found that what they are teaching is just too general to be effective for most people.

What is needed is detailed, step by step internet attraction marketing training. Not only should the training include how to set up the marketing, but also how to optimize it to get massive results.

Massive results, even mediocre results, are not possible through general training. In fact, it is a recipe for disaster and the failure of your business.

When people are being recruited to join a business, they are told, “don’t worry about marketing. We will teach you everything you need to know. You can learn as you go.” That, my friend, is ludicrous!! That is why there is such a high failure rate in network marketing and home businesses.

Why do I say it is ludicrous? Once people join a business, they simply don’t have enough time to master a better way of marketing.

Why Do Most People Fail in Network Marketing?

This is what generally happens. A person joins a business. They may not know how important marketing is to the success of their business.

There is a monetary investment to join their business. There are recurring monthly costs for websites, marketing tools, products/services on autoship, etc.

Already there is pressure to start making money as soon as possible to offset these costs. They feel obligated to start prospecting – to generate leads and talk with them. Prospecting takes time – much more time.

They may buy lists of leads and call them. Not only is this not a very effective way to build your business, but it adds more cost which adds more pressure to make money.

Meanwhile, the person gets involved in listening to company training calls, learning about the company, its products and services, etc. Of course, these things are critical in starting a business.

Here is the point I am making. Because of the time they are spending in their business, they do not have the time to master better marketing methods.

This is why so many people fail in network marketing. They simply do not have the knowledge they need to effectively market their business. And they don’t have the time to learn better methods.

The Solution

Here is my advice:

1. Talk to a knowledgeable person who can give you objective information on attraction marketing.

2. Decide how you’re going to market your business. It doesn’t matter what your business is. You don’t even have to be in one.

3. Find a training source that gives you detailed, step by step training in attraction marketing – a source that is very affordable.

4. Master those marketing methods. You will know when you are ready to get into a business.
Master attraction marketing methods and you can be very, very successful in a business.

If you fail to follow my advice, your business will likely be doomed to failure.

I have found the training source that meets all these criteria – detailed, step by step training, training that helps you to optimize your attraction marketing methods to give you massive results, and training at a very affordable cost. Contact me if you would like further information.

Master attraction marketing methods before you join a business. It most likely will be the difference between success and failure.