Whether you’re in the beginning stages of starting up your own business or looking to manage your current business’ credit more efficiently, it’s always important to stay on top of your finances. As your business starts to grow, it’s important to build a good credit record for your business that is separate from your personal credit record.
BBB recommends following these simple steps to manage your business’ credit:
Establish a consistent identity. Always use the same business name, address and phone number from the beginning, so it will be easy for the credit reporting agencies to keep your records in one file. Consider incorporating to legally establish a business identity that is separate from your personal identity.
Open your first accounts. Get a separate checking account for your business. Also open an account with an office supply firm or other supplier that reports the transactions to business credit reporting agencies. Make small charges and pay them immediately — before the invoice even arrives (unlike personal credit scores, you’ll get extra credit for paying before the due date).
Provide key documentation. Lenders will generally ask for your business’ tax records and earnings statements for the past few years so they can see how much you have earned in the past. And they may also ask for a business plan so they can assess your potential for future earnings. They are often interested in looking at your cash flow in relation to expenses and your total debt in relation to your earnings. Provide all of this documentation along with explanations to present the strongest case, especially if you have irregular earnings throughout the year, to prove to lenders that you expect to earn enough money to pay your bills in the future.
Apply for a DUNS number from Dun & Bradstreet, one of the major business credit reporting agencies (go to www.dnb.com). It usually takes 30 days to establish a DUNS number, or you can pay extra for an expedited account. Then make sure that the companies where you have trade accounts are reporting the information about your on-time payments to Dun & Bradstreet. It’s also a good idea to provide extra information about your business for your credit file. This is where potential lenders and others will find out about your business and the likelihood that you’ll make on-time payments for your loans, equipment leases and office leases, which will affect the terms and rates. After you have a DUNS number, open a few more trade accounts with other companies that send information to the credit-reporting agencies, make small charges, and pay those bills early, too. Check your account for errors and to make sure you’re getting credit for your early payments.
Check your business’ credit score. Similar to a credit score for individuals, a PAYDEX score distills the information in your Dun & Bradstreet credit report into one number, which shows potential lenders the likelihood that you’ll make your payments on time. These scores range from a low of 0 to a high of 100. A score of 80 to 100 generally means that you pay your bills before the due date; 50 to 79 means a medium risk of late payment (averages 30 days or less beyond the loan’s terms); and a score of 0 to 49 means a high risk of late payment.
Small businesses should be taking advantage of social media, especially Twitter and hashtags. A hashtag is the number sign (#) combined with a word or phrase. At BBB, we often use #BBB or #StartWithTrust at the end of our tweets. This way, if people are looking to find general business or consumer tips, they will have a list on Twitter to reference.
A blog post by OPEN Forum has five tips to improve your hashtag strategy:
1. Look for business topics. Hashtags like #smallbiz and #SMB are very popular on Twitter and they can be a good source of industry news. If you are looking for more specific information, try searching for hashtags like #sales, #marketing and #socialmedia.
2. Hashtags must be simple. You only have 140 characters to get the word out on Twitter. Don’t spend 50 of those characters with a long and complex hashtag. Keep it short and simple. Also, limit your tweets to 1-2 hashtags. Anymore than that is overkill.
3. Be creative. Make a hashtag for your business. If you’re hosting an event be sure to create a hashtag, so people can tweet about it. For example, the Massachusetts Conference for Women encouraged attendees to use #masswomen for those who were tweeting about the event. The hashtag was a great success on Twitter.
4. Monitor your hashtags. If you use a social media suite like HootSuite or TweetDeck, add a hashtag column to closely observe what people are tweeting. Or simply plug your hashtag in the search bar on Twitter.
5. #FollowFriday or #FF. Use Follow Friday to showcase your most loyal followers or other businesses you support. Try to put as many Twitter handles into one tweet as you can. For a more personal approach, only put one or two usernames.
For more information, visit http://www.openforum.com/articles/how-to-use-twitter-hashtags-for-your-business/.
Whatever happened to the old adage that a satisfied customer will tell three people and an unsatisfied customer will tell ten? Now disgruntled customers can share their rant about a company for the whole world to hear on blogs, Facebook, Twitter and YouTube.
Better Business Bureau advises that responding to complaints is necessary if a company wants to maintain a reputation for great customer service. In the same way that an online rant can damage a company’s reputation, successfully handling complaints online can showcase a company’s dedication to customer service, setting it apart from the competition.
BBB offers the following advice to small business owners on responding to customer rants:
Continually monitor the online conversation. One of the easiest ways to monitor the conversation, however, is to simply do an Internet search of your company’s name every couple days, keeping an eye out for new results. Set up Google Alerts, to receive e-mail messages when people post comments online or if your company is mentioned in the news.
Pick your battles. Depending on the size of your business, it can be extremely time consuming to address every blog post, comment or tweet.
Offer full disclosure. When defending your company online, don’t pretend to be an unbiased consumer. Tech savvy individuals can easily deduce who is behind comments so it’s best to be honest and admit up-front that you represent the company.
Take the conversation offline. Some companies have made the mistake of hashing out disputes online for everyone to see. Instead, keep online responses polite and direct and ask the customer if you can contact them directly by e-mail or phone to discuss the specific details of their complaint.
Don’t say anything privately that you wouldn’t want public. Just because you’ve taken the conversation offline, it doesn’t mean that your e-mails and phone conversations won’t end up on the Internet, so always remain polite and professional.
Follow through. Don’t drop the conversation when resolving a dispute and always follow through on promises. Consider providing a little extra perk, such as coupons, after the issue has been resolved.
Know when to walk away. There’s no satisfying some angry customers and at times a small business owner can only offer a sincere apology and walk away from the conversation.
For more BBB advice on providing great customer service both on and off-line visit www.bbb.org.
BBB has 10 New Year's resolutions that can help you fight scammers, prevent identity theft and save money in 2013.
1. Do your research. Whether it's a business you're looking to hire or a product you're looking to buy, take the time to do your research. Check out a business at bbb.org to see its BBB Business Review. For product information, go to the Consumer Product Safety Commission.
2. Keep your computer safe. Install anti-virus software on your computer and regularly check for software and operating system updates. Don't open attachments or click on links in emails unless the email has been scanned for viruses or is from someone you know or trust.
3. Get it in writing. Don't just take a business's word for it. Get every verbal agreement in writing to limit miscommunication and misunderstandings.
4. Never wire money to someone you don't know. Many scams require money to be wired back to the scammer. Tracking money sent via a money wiring service is almost impossible.
5. Protect your identity. Always shred paper documents that include sensitive financial data and dispose of computers, cell phones and digital data safely. Safely store all personal documents, such as your Social Security card, and look up your credit score at least once a year. Check your credit and debit card statements frequently.
6. Shop on trustworthy websites. Online shopping has increasingly become more popular, so before you provide any personal or banking information over the web, make sure you're using a trusted site. Look for the "s" in https:// in the URL for a secure site.
7. Give wisely. Most philanthropists give year-round. To ensure your time, treasure and talent are going to the cause you're looking to support, research all charities at give.org to check their legitimacy and to see how their monetary donations are distributed.
8. Don't be pressured. If a company, organization or salesperson uses overly aggressive sales tactics to pressure you into making a purchase or on-the-spot decision, that's a red flag.
9. Limit the amount of information shared. Scammers use social media sites to gather information on potential victims. Avoid sharing too much personal information and check your privacy settings. Additionally, never announce through a social media site that you are going out of town, or won't be home for a specific amount of time.
10. Let your BBB help. BBB is here to promote marketplace trust. If you have an issue with a business or feel you have been scammed, file a complaint with your BBB.
Do you have a New Year’s resolution for your business? If you haven’t thought of one yet, one idea is to form a social media strategy and promote your business on sites like Facebook, Twitter, Linkedin, Foursquare, etc. Social media isn’t going away and it’s critical that you get your business out there. However, BBB recommends that you ease into the waters carefully and thoughtfully when planning to launch your social media strategy; otherwise it could be a giant mess.
Here are some tips to help get you started on your social media strategy:
Don’t get in over your head. Start small, such as with a Facebook page or by commenting on blogs or connecting with customers on Twitter. Let your social media strategy grow and evolve as you learn what works best for your time constraints and business goals.
Create and share information. Social media is about engagement, and creating and sharing content is key to connecting with customers and other industry leaders. When writing your own content, always maintain an appropriate and professional tone and use plenty of links to other sites, blogs, or news articles to help illustrate your point.
Keep everything connected. Once you’ve created your page on Facebook, or established your blog or Twitter account or other online presences, cross-promote your content so that the same message is going out across every site. For example, Tweet about your blog post or send a link in a message to your LinkedIn group.
Engage in the conversation. Inject yourself and opinions into the conversation by following opinion leaders on Twitter and social networking sites and commenting on blog posts. Whenever possible, include a link back to your content or Web site.
Engage with customers. our customers are talking about you online whether you like it or not on their blogs, consumer-focused Web sites and on review sites like Yelp, Yahoo! Local and CitySearch. While you can’t take control of the conversation you can help steer it by listening, engaging with customers and working to resolve any problems.
Typically around this time of year, business can be slow. This downtime can be a good time to get things done around the office and check off tasks on your to-do list. According to an article by Entrepreneur, Colin Sprake, motivational business speaker and author of the upcoming book, The Entrepreneur Success Recipe (Morgan James Publishing, 2013), has 6 ways to make good use of your holiday downtime:
1. Reflect and review the past year. Take some time to think back on the year and review strategies such as marketing and sales. Be sure to ask yourself, what worked? What didn’t?
2. Create a New Year’s resolution for your business. These can be small or big goals, but keep them handy so you can evaluate their progress in a few months.
3. Invest in yourself. Are there any courses you’ve been meaning to take or business books you wanted to read? Use this time to catch up.
4. Don’t be afraid to take time off. You need to recharge too. Take a break and come back in the New Year refreshed.
5. Take care of yourself. Use this free time to schedule any doctor appointments that may be overdue, or clean up your yard.
6. Be sure to thank those who support you. You often thank your clients for their business, but do you thank the people in your life who support you and your business endeavors? Don’t forget about your family and close friends.
To read more, visit http://www.entrepreneur.com/blog/225313
Do you have a return or exchange policy? Are you already dreading the post holiday gift returns? It’s important for businesses to keep their customers in mind when it comes to their return policy.
BBB recommends that businesses consider the following when creating, solidifying or simplifying their return policy:
Make sure the customer is aware of your policy. Display your policies at the checkout counter and on your website.
Provide gift receipts. Six out of ten shoppers say they include a gift receipt when giving a gift, so be sure to offer one at the time of purchase.
Encourage customers to return the merchandise unused, unworn or unwrapped. Everyone likes getting merchandise in its original package and by encouraging customers to return goods this way, you better your chances that the product can be resold.
Make online returns easy. Lay out the return rules clearly. Explain who pays for the return shipping, where the customer sends the return, and any forms or mailing labels you want them to use.
Stay calm and helpful. The holidays can be a stressful time for everyone and making returns is usually not high on the customer’s list of fun things to do. When working with a customer, always go into a return with a smile. If their experience is good, you may win over a new customer.
Whether you’re in the beginning stages of starting up your own business or looking to manage your current business’ credit more efficiently, it’s always important to stay on top of your finances. As your business starts to grow, it’s important to build a good credit record for your business that is separate from your personal credit record.
