Establishing Business Credit – One of the Most Importand Steps to the Success of Your Company

Establishing business credit may be as important to a successful business as attracting customers or clients. Both will contribute to the on-going success of the company and both will require a level of commitment to meeting their needs before they become established. Establishing business is a journey and not a destination. It requires commitment at the beginning and vigilance throughout in order to keep it active and flowing within the community.

The best way to establish business credit is to have a well run business. That means setting up the business after doing all the homework required to identify a need in the community and then filling that niche or need with the required product or services. It also means having adequate human, physical and financial resources or backing in order to get the business off to a good start.

Once a business is up and running a company can establish their business credentials and credit by ensuring that their bills and employees are paid accurately and on time. This shows the rest of the community that you are trustworthy and it begins to show the banks and financial institutions that you are creditworthy, an important part of being able to establish business credit.

Another way to establishing business credit is to ensure that all personal finances of the business ownership group are clean and in good standing. Banks and other lending institutions like to lend money to people, preferably people they know and trust. One sure way to successfully establishing your business credit with a bank is to establish your personal credit first. Banks and credit unions also like to go very slowing in building a business credit relationship with local and small businesses. The way they like to begin is usually to ask for personal guarantees for even small amounts of business credit. They want to ensure that their monies are protected, since the failure of small business is astronomical in the early years of operation, and they like it when an individual will guarantee their business investment through their personal assets.

Lending institutions also like to know that the business seeking to establish business credit has financial supporters and friends within the local business community. One very successful way in establishing business credit with a bank or other financial institution is to have another business owner in the community vouch for the creditworthiness of the prospective borrower. This shows the bank that others in the community trust the business to meet its obligations and can go a long way to establishing business credit with the bank.

Establishing business credit is never easy and it will take time but once a business gets a good track record in meeting their business credit responsibilities most banks and credit unions are happy to support and provide all of the credit required to make the business a success.

How To Be A Business Success

Through observing business people who have been successful, and how they achieved their success, I have concluded that there are a number of factors that must be present for business success to occur. As I like to keep things simple, these success factors can be condensed into a formula. It is:

Success = Startup Business Person + Product/Service + Market

Let us look at this formula in a little more detail. Firstly, what is success? The definition of success depends on what you want to get out of the venture, that is, what your goals are. Business success usually means creating a viable entity (business) that returns its investment and earns a profit.

Appropriate and realistic goals include to be challenged, to achieve, and to build something good. For example, your definition of success could be to earn $100,000 a year from your home business so that you can replace your full time job income.

The most crucial element of the above formula is the “Startup Business Person”. This element decides all the others.

Ultimately, a successful startup business person is someone who opens, manages and runs a successful startup business and can repeat the process. This is someone who has accepted the responsibility and learned how the job is done.

Successful startup business people usually always start small and grow the business. They do not have too many irons in the fire at once so that their efforts are not diffused. They give it everything they have and believe that hard work counts. They try repeatedly until they achieve the success they are looking for. Moreover, most of all, they possess a positive mental attitude.

They have learned to emulate success. Do you know what emulate means? To emulate means to attempt to equal or surpass. In other words, if you were to attempt to emulate someone else’s success, you would imitate them and as you gained further knowledge and skill, you would attempt to do better than them. Remember that emulation takes things one step further than imitate.

The next part of the formula is “Product/Service”. Without something to sell, there can be no business. Generally, the product or service needs to be of a high quality. It also needs to be something that people are prepared to pay for.

The last component of the formula is “Market”. A successful business person knows who their market is and how to reach it in the most cost effective manner. The market is defined as the people who want and are prepared to pay for the product or service.

I would now like to run through with you what I consider are the basic principles of home, small or online business success.

Believe in Your Product or Service

First, you need to believe in your product or service. If you do not believe in it, you will have a great deal of difficulty selling your product or service to other people. You also need to have confidence in your ability to provide and promote your product or service. An old saying sums this up best: “All things are possible to he who believes”.

Aptitude for the Business

Secondly, you need to have an aptitude for the business. You will also need the motivation to acquire at the very least basic skills and experience before you start your business. If you were to set yourself up as a home electrician but did not have any skills or training in this area, then you will almost certainly fail. However, if you are employed as a bookkeeper and you enjoy the job, then setting up your own bookkeeping service would be a sensible choice with a greater chance of success.

Be Responsible

Thirdly, you need to be responsible to your customers. This is achieved by only making commitments you can keep and by not engaging in misleading or dishonest advertising. If you want to build long term success in your home business, then you need to develop long term satisfied customers. When their needs are being satisfied, customers are at their happiest.

Aim for High Quality

The next principle is that you need to have a high quality product or service. This will be your best advertisement. Inferior quality products usually generate poor customer satisfaction. A dissatisfied customer can be very dangerous for your business. Usually they tell on average about fourteen other people who will then be disinclined to buy your product or service based on the experience of that one dissatisfied person. Therefore, always aim for a top quality product or service.

Make a Profit

However, it is not enough to have a top quality product or service. You also need to have a product or service that will generate enough income to cover all your business expenses and give you a satisfactory wage. A friend of mine once said that business is only about two things: satisfying customers and making a profit. A simple statement but very true.

Sufficient Startup Capital

You also need to have access to enough cash to set up and run your business, and enough income to meet your private expenses during the startup phase. A major problem with many home and small businesses is that they fail to have enough money available to ensure their success. There is nothing more discouraging than having a great idea, getting it started on a shoestring, not being able to expand due to cash shortages and seeing a competitor come along and steal your market.

Start Small

Another fundamental principle of home business success is that you start small. This will enable you to minimize your overheads until you are confident of your success in the marketplace. For many of you, this would mean starting part-time while retaining your full-time income source. When you can, expand your business into a full-time venture. This is a great way of minimizing the risk of failure.

Be Well Organized

Successful home businesses are well organized. They have a system for keeping track of expenditure and earnings. This level of organization in your business will help to ensure that you are providing your customers or clients with a top quality product or service. It will also ensure that you have enough information available to maximize your profitability and to satisfy your legal requirements for record keeping.

Be Prepared

Preparation is another important ingredient in your business success. This preparation will include being aware of the regulations and laws affecting small, home or online business in your area or country. Armed with this knowledge, you should not have any nasty surprises from unintentional violations of the law.

Have a Business Plan

Finally, successful home businesses have developed a comprehensive business plan. This is their road map to success. It tells them where they are going and how they are going to get there. It is very useful for comparing actual performance against what you planned and enabling you to make adjustments to lead to greater success. There are many useful software packages available to assist you with your business plan preparation.

Start a Business and Be Your Own Boss

Start a business of your own with an idea, and a bit of imagination. Starting a business can be a difficult decision that you are not sure if you have what it really takes to be an entrepreneur. Don’t worry; everyone starting out, in building any type of business has those same thoughts to some degree.

How are you going to become self-employed and start a business of your own?

First, you should think about how you can start a business. You can start a business from scratch, and this means without buying any type that is already established. This is one of the riskiest paths of self-employment but one that many have done successfully in the past. Every day new restaurants, retail outlets, stores, service centers and the like are being established, fresh and new to the market. This is your clean slate, where you start your own reputation; your own name in the industry, and you put forth your own thoughts and ideas into the business world.

The advantage to your own start up business is you will learn from your mistakes, making changes on the way. If you were to hire the wrong type of employees, or if you have the wrong location, you can change these things. You make the decisions; no set patterns or ideas you must follow to get additional sales for your business.

Another way you can start a business is to purchase an existing business. You can purchase an existing business and start in the industry with a reputation and customer base already established. You will thrive in business, as you will be following an established pattern of business, and ideas, selling products and services already known in the marketplace.

The advantages to purchasing an established business are that you will gain the reputation of the business you take over. You will have a client base that will know and recognize the product, service, and the business name. The existing location is an added bonus, saving you time, money and errors as you learn while starting out in any business.

You have yet another choice in starting a business, and that choice involves purchasing a franchise. Your choices are vast in starting a business. If you want to start a business where the volume of people is high, purchasing a franchise could just fit your expectations perfectly. You will have a well-known business name; a reputation that will draw customers, and a business plan to follow that will enable you to be successful while still being your own boss.

The advantages of purchasing a franchise involve that you will have a set business idea to follow, along with a name that will bring customers, sales along with a well-known business name. You gain access to the parent company marketing and advertising as well as being able to fall back on the skills that others in the franchise have already obtained so you can draw upon this expertise to strengthen your own business.