SubscribeSMALL BUSINESS LEADER October 2007
Small Business LeaderMarian Banker, MBA, Business Leadership Coach, and creator of the Business Success System.
"Lead Your Business to Success" ISSUE #98
October, 2007
In This Issue
Business Success System Course
Events
Feature Article
Small Business Leader Marketplace
About The Publisher & Feedback
Quick Links
Register Now
Past Newsletters
More About Us
Note from Marian:
My trip to Texas was a wonderful change of pace. We had no formal plans when we arrived. On a day to day basis we decided what we'd do.
We got to know Austin a bit better (the Duck Adventures Tour was fun) and took a day trip to San Antonio. We also took my nephew and his family out for a birthday dinner, went to the pool in my sister's community, rode my sister's bike (hadn't ridden since my late teens), cooked at home some evenings and ate out some. All in all it was great to spend time with my sister and do things we don't ordinarily do.
Small Business Summit 2008 is well into the planning phase. We already have Dell onboard as a key sponsor and others are pending. We're planning for an interim information page while the main web site is completed. That's in the works now and I'll let you know when it's up.
October 23rd is our first Business Partners Tele-Forum. It's an hour-long conference call with a guest expert on business partnerships. This month our expert is Nina Kaufman, Esq., on the topic, "The Indispensable Partnership Agreement", http://primestrategies.com/bp_teleforum. In addition we'll do some situational coaching and you'll have lots of time to ask your questions.
Be sure to read this issue's feature article, "Business Credit: How to Get It N0w". This topic should be of importance to every small business today. We don't know what the future will bring, but with credit tightening at the federal and corporate levels, it's already starting to trickle down to small business borrowing.
There's lots of other stuff in the works for later this year, so please stay with us.
To your success,
Marian Banker
Publisher
Small Business Leader
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NOTE: We have had to disguise some words in order to keep them from getting caught in the $pam filters. Please bear with us.
Business Success System Course
Want your own Personal Roadmap to Business Success? Take Command of Your Business with the Prime Strategies Business Success System Course. Gain the confidence to make well-calculated strategic business decisions in spite of challenges and crossroads.
Included is a step-by-step guidebook, interactive tools to organize your thinking and your actions, plus coaching audios to support you as you take each step in the system. It's totally risk f*r*e*e because it comes with a 100% satisfaction *guarantee*.
Order Now
Events
Business Partners Tele-Forum
Tuesday, October 23, 2007, 1 - 2 p.m. EST
Join with partnership experts and peers where the focus is on partnership concerns and issues. The topic for our premier Tele-Forum on October 23rd will be "The Indispensable Partnership Agreement". Our guest expert is Nina Kaufman, Esq., a Partner in Paltrowitz & Kaufman, who recently released her book, "100 Vital Questions to Ask Before Going Into Business With Someone Else".
If you've ever wondered about the value of an Agreement and why it's important, then clear your calendar and be on this call. There'll be time for your questions, too. Full details and registration are at http://primestrategies.com/bp_teleforum.
Marrying Technology and Sales for Sure Success - Tuesday, October 23, 2007, 8 - 10 a.m. EST
Join 2 of New York's top speakers for an early morning seminar on using technology to increase sales. Ramon Ray, http://smallbiztechnology.com, and Adrian Miller, http://adrianmiller.com, will share their expertise in a lively and highly informative program. Networking, coffee and muffins included.
Only a few seats left. Full details and registration here - http://technologyandsales.eventbrite.com/
Feature Article
Business Credit: How to Get It N0w
By Marian Banker
Using credit to defer payment on consumer spending is a way of life for most of us. Yet we may not have taken advantage of the same option for our business. Obviously, use of credit in any circumstance must be done judiciously. For many businesses, however, use of credit can be a lifeline to even out ca$h flow as well as a way to build a credit history for future needs.
Such is the case for a new business that must purchase core product or service-related items for which ca$h is required on delivery, but the sale of those items will not take place immediately. In many cases, once the $ale is made, payment could take as long as another 60 to 90 days, depending on industry practice. Meanwhile operating expenses continue. Ouch!
For any business with a delay between expense and income or one that carries accounts receivable, a credit line can act like a bridge loan to cover expenses pending receipt of payment. It can also be used to cover any unexpected operating expenses.
I've seen companies with many thousands in personal credit card loans supporting their business but no business credit line. That's OK as a place to start, but it's not a good long term financial plan.
A business line of credit is an excellent first step in establishing your credit-worthiness for future borrowing or outside funding. It operates like a credit card but is usually used for larger amounts and often carries a lower interest rate and more negotiable payment terms. Remember, however, it's important to pay down credit line balances as soon as is practical so you'll have the available credit when needed. Today creditors want to see lines paid down (cleaned-up) at least once a year.
So when is it time to pursue a credit line for your company? As the saying goes, it's easier to get money when you don't need it. That's when you'll be able to present your business in the best light and be prepared to provide the bank with what they want in order to "qualify" you. It seems that small business credit is undergoing some tightening in line with changes in the economy.
Denis Healy, Vice President, Small Business Banking at Wachovia Bank, says "The days of easy money are pretty much over. Banks are looking at the purpose for which operating capital will be used, as well as whether or not projected ca$h flow within a one year time period will be adequate to pay off the de.bt."
You may have to start by applying for a company credit card. You'll probably have to personally guarantee payments, but by applying in company name, you're starting to build a business credit history. This is how I have built a credit line of more than $50,000. I have never used it, but it's great to know it's there.
It's still not that difficult to obtain a credit card. It's an excellent way to begin to establish a credit history and offers some relief from the need for immediate ca$h for every purchase.
Keep in mind credit card lines are usually more expensive than those from the bank. Your objective is to get what you might need at the lowest rate, so be careful about borrowing large amounts (or allowing your advances to build up) on a high interest rate line.
Small and new business resource providers like American Express, http://home3.americanexpress.com/smallbusiness/services/financing, and Staples, http://www.staples.com/sbd/cre/programs/credit/?cm_re=FOOTER*WAYSTOSAVE*Staples+Credit+Center, offer business credit cards that establish credit in your business name backed by your personal guarantee. You're a co-signer for your company's introduction into the credit market. It's like a parent or relative co-signing for an apartment lease or car loan.
Be sure to read the terms carefully on any promotional offering, so you don't find yourself paying extra high rates once the promotion period is over.
According to Healy, your business bank is probably the best place to initiate a credit line application. Make an appointment with your banker; discuss your credit needs and outlook for your business. Be prepared to provide tax returns and (probably) financial statements. Your bank has a vested interest in keeping you as a customer and is usually eager to offer extended services to small businesses. But they're likely to be more prudent than in the recent past.
Obviously, once your credit is established you don't want to borrow unless you need to. Many entrepreneurs put off asking for credit because they're not sure their business qualifies. N0w's the time to find out. Talk to your banker. Even if you have to personally guarantee your initial credit line, it's a great way to begin to establish credit worthiness for your business and provide a stepping stone for future growth.
Want to learn more about ca$h and credit management? The Prime Strategies Business Success System Course, http://primestrategies.com/business-success-system offers guidelines, tips and tools to help you understand and manage your finances.
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About The Publisher & Feedback
ABOUT THE PUBLISHER:
Marian Banker has been publishing Small Business Leader since January, 1999. Her focus is on bringing to the busy entrepreneur a quick look into the current world of small business from the perspective she's gained through coaching, consulting and training entrepreneurs in both service and product based businesses.
Marian offers individual coaching, business support groups, seminars and workshops on topics of critical interest to small business owners. Her monthly Lunchtime Telephone Roundtable has proven to be a popular way for business owners to come together around a specific business topic without leaving their office. See notice about this month's topic in the content above.
To learn more about her services, visit http://primestrategies.com.
FEEDBACK:
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