Systemizing Your Business: Be a CREDIT to your COMPANY

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Thoughts from your Systems Goddess, Sandye Linnetz, Process Prodigy

“It takes money to make money”! I don’t know who said it, but we all know how true it is! Do you have enough money on hand to grow? Does your company have a credit rating? Can you get the money you need when you need it? No, your Systems Goddess is not in the credit and lending business, but I can help you in creating a system to establish yourself so that getting credit is easier.

So often, those of us who have good personal credit, depend on that for our company. Big mistake! Step one is to separate your personal credit from your business credit. This will protect you and your personal credit and assets “just in case” of a business shortfall and will also protect your business credit and assets if you have a, dare I say it… personal “problem”.

To separate personal from business credit you will need to either incorporate or form and LLC (Limited Liability); making your business it’s own entity. If you are currently a sole proprietor or part of a partnership, you are personally liable for the whole package (ouch)… including lawsuits and debts. The objective here is to create a business – not just do business.

Did you already establish a bank account under your legal business name? If you did, then you have already completed one big step, because you can’t open a business account until you have filed a DBA (Doing Business As) and registered your business name. You must also have an EIN (Employer Identification Number). Here’s a short list of the things to do:
1. File a DBA
2. Apply for an EIN
3. Open a bank account in the EXACT, legal, company name
4. Secure all necessary business licenses, permits, etc.
5. Install a phone line (directory listing) in the EXACT, legal, company name
Now it’s time to start establishing credit. Do you currently do business with vendors who extend credit to you (even a small amount of credit - or lousy terms counts here)? Good start. Get yourself established with 3 to 10 vendors, and, where possible, apply for company credit cards with them… think Staples, Costco, etc.

Time to register your company with all three credit-reporting agencies:

Trans Union, Equifax & Experian

 

On line set-up is generally quick and easy. There are even companies on the internet that will do most of this for you. This is not necessarily the fun part, however, unless you love detail work and are ridiculously proud of your payment history.

Get yourself at least two or three NON-Personal credit cards (don’t forget the suggestions above). Make sure that these accounts are established in your company name ONLY. There are banks that will set up a business account without your social security number attached if you meet all of their other business requirements. Check with your bank – and make sure that the credit card information is reported to the BIG THREE. Okay, start using the cards… gently! Here’s the concept that can make or break your credit:

PAY ALL OF YOUR BILLS ON TIME!

 

It’s vital that you get set up with all three business credit agencies and that you have vendors who report to them. Find out who those vendors are and establish credit with some of them. Creditors who do not report to national agencies won’t do you any good here.

This is also the time to see if you can find an appropriate bank to issue a small business loan… that, of course, you will diligently control.

Okay, that’s the start. Now create a system to manage your credit. Due diligence followed by careful monitoring – borrowing followed by timely repayment – and you are a CREDIT TO YOUR BUSINESS!

© 2008 Beth Schneider, Process Prodigy, Inc. Want to reprint this article? Feel free as long as you include the following: Beth Schneider, President of Process Prodigy Inc., www.processprodigy.com, along with her team of highly sought after operations consultants, reveal the insider secrets billion-dollar corporations pay thousands of dollars for. Specializing in process creation, Process Prodigy tools and techniques have helped entrepreneurs increase productivity by as much as 600%, and revenues by as much as 250%. Visit www.processprodigy.com/ezine and grab your FREE systems starter kit valued at $297.00.

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