Build Your Business Credit Fast

 Learning how to start building or repairing credit for your business are imperative. Whether you are establishing a business or have an existing one, building a good credit rating is essential, as it helps to optimize your business operations.

In the initial stages of building business credit, more often than not, it is necessary to use your personal credit background to obtain funding to finance purchases and attain credit. However, the business credit profile should be separated from your personal one, as relying on one's own funding to finance the business leaves you personally liable.

The process to build up credit for your business must commence prior to starting operations. To start building credit immediately you must be looking on establishing the following:

Business as a Legal Entity

To separate your business credit score from your personal credit score it is necessary to establish your business as a separate entity. To qualify as a separate entity the business has to be structured as a corporation or a limited liability company (LLC).

Tax Identification Number

Acquiring a tax ID number (also known as an Employer Identification Number, or EIN) is the next step involved in building valuable credit for your business. Similar to the personal credit score which is associated with the individual's Social Security Number, the business credit reports are associated to a tax ID number. The federal tax identification number can be obtained from the Internal Revenue Service and there are a several ways to reach them:

• Call the IRS Business and Specialty Tax Hotline at 1-800-829-4933.
• Download IRS Form SS-4 from the Internal Revenue Service website
• Download IRS Form SS-4 from the Small Business Administration website and submit to IRS by mail or fax. Directions for the SS-4 forms are provided online.

Business Bank Account

Opening a business bank account allows you to separate business funds from personal funds. Furthermore, a business bank account can also serve as a bank reference when applying for business credit.

How To Start Building CreditWith A Business Credit Card

As a business credit card can be used as a revolving credit line, it is simplest way to build up credit history with on-time payments. Timely payments eventually improve your company's credit worthiness which facilitates your ability to acquire a business loan. Therefore, use a business credit card for payments whenever possible. Unlike personal credit cards, having multiple active business accounts can be positive, provided that they are in good standing. However, limit the number of business credit cards when beginning and as the company grows you can continue to acquire more.

Business Phone Number

Acquiring a business phone line is important as business credit reporting agencies use the phone number to index your business in their databases. In addition, the credit reporting agencies use the telephone number as proof that you are actually conducting business.

Business Listing

Be sure to supply the exact same business address and phone number to every credit agency and trade credit vendor. Ensure that the business address and phone number are also listed in both the 411 Directory (White Pages) and the Yellow Pages.

A D-U-N-S Number

The D-U-N-S Number is a 9-digit number issued by Dun and Bradstreet that most companies utilize it to verify the credit history of businesses. The United States government and many corporations require their suppliers and contractors to have a D-U-N-S Number. Keep in mind that having a D-U-N-S number is just the beginning. You will need to start building your company's credit profile by doing business with creditors and/or suppliers that report to Dun and Bradstreet.

How to Start Building Credit By Registering with Credit Reporting Agencies

Many of your company's lenders and suppliers report information to the business credit reporting agencies about your company, such as how your business pays its bills or loans. There are many business credit reporting agencies such as D&B, Experian Business, BusinessCreditUSA, FDInsight, and ClientChecker. The majority of suppliers, creditors, and lenders pull their reports from Dun and Bradstreet, Experian and, Equifax Business. Registering an account with these 3 business credit reporting agencies is a good start.

Registering enables your company to start building credit through their credit databases. The database can also be used by potential customers, suppliers and lenders to obtain fundamental information about your company. As it is not mandatory, it may be necessary to ask businesses that you work with to report your timely payments to these business reporting agencies. These submissions enhance your credit rating and verify your registration with the business credit reporting agencies.

Compliance

Before conducting business, it is necessary to obtain all registrations, permits and business licenses that are required in your jurisdiction.

In summary, once the above list has been completed, the process of building business credit profile can commence. Obtaining trade credit with vendors is a good place to start. To build up credit score, it is important to seek vendors and suppliers that are set-up to report your company's payment history to the credit reporting agencies. Naturally prompt payments for purchases are essential in leading to a good credit score. If the business has an existing loan, timely payment of the loan can also help you establish a better business credit score.

Business Start Up VS Buying a Business

Buying a business is another way to enter business ownership. There are many similarities between a start up and entering business ownership through acquisition. Like everything in life it has positive and negative sides. Availability of time, money and skills should determine the business you will buy.

Look for a business that you can manage

The type of business you consider should reflect what you already know. Owners who spend years building their business from the ground up are protective of their creation and like to know the qualifications of potential buyers. Usually they avoid dealing with people who do not have the money and skills to operate a business. As a buyer you should avoid having the supermarket shopper syndrome when looking for a business. You have to know what you are looking for. For example a restaurant, clothing retail store and manufacturing company require different set of skills and expertise to own and operate.

Decide how much to spend on a business

In the beginning of the business acquisition process any prudent buyer will ask the following two questions. How much money I have to buy a business? Do I have enough operating capital to run the business? There should be a clear understanding how much money is available for acquisition. In many occasions some financing maybe available from the business owner, banks or other sources. Yet, this is valid for bigger businesses with established history and proven profitability. There is not much available for smaller and losing money propositions. Sources of money have to be clearly identified ahead of time. Acquiring a business is significantly more capital intensive in a short term than a startup.

Decide on general business location

Decide on desirable physical area, neighborhood and location before starting to look for a business. Small business owners spend considerable amount of time in their business. You have to like the location. It is important to know how far you are willing to commute. Are you going to move to another part of town, city or state for a good business?

Have an acquisition time limit

Buying a business should not be open-ended process. Appropriate time frame should be within two years or sooner. Owners want to work with serious buyers. Having a time period within which you will purchase a business tells the seller that you are serious about buying a business.

Have a vision for the acquired business

Another very important aspect is to have a vision for the business you are buying. Every business is unique and reflects owner's dream and value system. By buying a business you are purchasing other person's dream. You have to have your own vision about the business as a new owner. Any, changes must be introduced with great care.

Benefits of buying a business

The major benefits of a buying an established business are reducing risk and immediate access to income. Also, you acquire with it a working operation, access to customers, suppliers and trained employees. In addition you buy into owners expertise. Usually, the seller will train for a limited period of time. However, she will not teach basic business skills. The buyer has to have the skills and knowledge to run a business prior to purchasing one. When a business comes on the market the seller in most cases will separate mentally from it. They do not want to go back and revisit it after the sale is completed.

Challenges to buying a business

Acquiring a business requires significant amount of cash to buy and operate the business. Need to learn the business quickly to get in sink with the established operation. Some employees, customers and vendors may not like you and decide to look for other opportunity. Historically this translates to a six-month drop in sales for the new owner.

Many buyers are looking for absentee owner situation. There is not such think as absentee ownership. Business is like a garden. It needs constant attention. Otherwise the weeds will take over or the plants will die because of lack of attention. The best gardens are tended with love and passion. Acquiring an established business offers quick jump into income producing ownership and saves years of hard work and uncertainty of startup.

Making Your Business Grow

One important part of making your business grow and make profits is marketing. Of course, you have to market your business, market your products, and get in touch with your target customers. Whether you have a small or a huge business, marketing is never absent as an essential component in making your business succeed.

If you have a small business or you are trying to venture into selling something online as a start, then learning a few business marketing tips will help you have a good start in making your business grow as well.

Here are a few of those business marketing tips that you might find useful in marketing your business offline and online.

1. Take advantage of newspapers of local circulation. Indeed, one of the popular ways to market your business, especially if it is still a small-scale one, is to take advantage of print media. Newspapers readily welcome advertisers, thus you can make use of it especially if your target customers are locals or your business is just small-scale.

2. Create your brochures, flyers, press releases. These are still effective today especially if you want to reach out to people just within your vicinity. This also helps attract customers already in the venue of your business and lead them to your shop. Even for those who are just 'looking around,' these advertising leaflets can help them know more about your products and your services.

3. Provide free information to potential customers. This is one of the effective ways to promote your business and encourage people to take a look and know more about your products. You can sponsor free classes and workshops every now and then and provide them with inputs and information that they will find valuable. If your shop is an arts and craft store, then you can provide good training and workshops on card-making or some other interests and hobbies that is related with your business.

4. Network. Create connections and networks with other businesses and networks, from home based business groups to other business people. Of course, connections and networks are good for your business. As all of you are looking for ways to promote your products, you can mutually benefit by promoting each others products, especially if your business complements.

5. Go online. Strive to make your business visible on the internet. These days when people are relying on the internet for information and even for shopping and finding answers to their questions, it is indeed wise to expand your marketing efforts to the online world. Going online also helps expand your business and your target market to a worldwide audience. If your product can be easily shipped anywhere in the world, then you might also find that going online is one of the best ways to expand and grow your business.

These are just five of the many business marketing tips that you can implement and do with your business. It is important that you also learn constantly and update your marketing techniques as well so you won't left behind my competitors, especially in online marketing where the pace is fast and you need to keep up as well.