If you didn’t have a life in 2008, consider getting one in 2009! 

Most small business owners don’t know how to balance their personal life with their business life.  I would like to recommend a book to you:  How To Succeed as a Small Business Owner and Still Have a Life by Bill Collier.

Mr. Collier warns against just creating a job for yourself and assists the reader in goal setting to avoid the tendency to have your business become your boss.  Your business should be a joy to run if it is not running you!

Being a business owner should be all about you!  Take stock at the beginning of this year and make the proper preparations for success.  Make your personal and family goals first and then your business goals.  Learn how to make optimal use of your time, people, and passion for your business. 

Don’t underestimate the time it takes to put systems in place in your company so that it can be on auto pilot without you there.  This is my personal strength in business is putting together the policies and systems that bring out the best in employees and can give them clear guidelines and security to run the business when you are not in the office.  It is such a joy to take a vacation and know the office is in good hands.

Don’t underestimate the process of hiring the right people.  I know that I have a great staff here at EON, but I have had my share of the wrong type working for me.  It is really something to have an employee leave and find that the company runs more efficiently and more positively than ever before. Having the right people make all the difference and keeping them is just as important.  Mr. Collier has great ideas on this as well. 

So in 2009, get your business on autopilot.  If we at EON can help you in any way, please call us.  713 839 0001.

Get a life in 2009!  We wish you a prosperous new year!

What is Business Credit?

Your business credit record is the primary way that companies evaluate whether to do business with you—and on what terms. Companies rely on your business creditworthiness to make critical decisions, including whether:

• to sell to you
• to lend you money
• to partner with you
• to lease the equipment you need to grow your business
• to increase your line of credit
• to help you carry more inventory at competitive prices
• to give you favorable financing rates and terms
• to see how you compare to your competition

Business credit includes a variety of data points about your business, such as the date it started, the skills and experience of your top leaders, number of employees and annual sales. This type of information is listed in your business credit profile, along with scores and ratings that are derived from your business’s past behavior to predict its future behavior. For example, your ability and willingness to pay your bills on time in the past is factored into your ability and likelihood of paying your bills in the future.

Why is Business Credit Important?

Good credit is the lifeline of your business.

It’s not just about getting access to financing; business credit has increasingly become the primary vehicle for setting terms on business loans, determining insurance premiums, even setting lease payments. Good business credit can earn you lower rates, strengthening your cash flow.

What are the 4 Cs that companies look for?

A business’s creditworthiness is ultimately determined by what are known as the “4 Cs of Credit” — character, capacity, capital and conditions — most of which can be found explicitly or implicitly in a company’s credit report.

Character

Capacity

Capital

Conditions consider the external factors surrounding the business under consideration - influences such as market fluctuations, industry growth rate, political/ legislative factors, and currency rates.

A credit manager or loan officer will answer these questions by locating and reviewing:

requests for credit information

customer supplied information

bank information

trade information

These factors are also taken into consideration by other service providers, such as insurance companies to set premiums. More than ever, companies are using automated decisioning, which means they input scores and ratings that summarize the 4 Cs into a financial model to determine the risk of doing business with you.

What you wish you knew about business credit…

Bonnie G. Price, Operations Officer EON

Personal and business do not mix

The vast majority of small business owners grow their business off of their own personal credit score.  Every time you apply for a copier lease,  credit card, or vendor account by using your social security number, you are using your personal credit.  This does not allow you to build a positive business credit profile and can damage or limit your personal credit score. Extra inquiries and debt, makes your personal score lower. 

Business credit is different

If you pay your personal credit lines on time with the minimum payment, you are doing well.  If you keep your balances under 30% of their limits, your scores will increase.  Business credit works a different way. Basically, you need to pay as fast as you can and pay about 15% more than is owed.  Business credit balances can be to the limit without adverse affects.  That is one good thing!

Business credit means success

The SBA reports that 80% of small businesses fail in the first 2 years.  What are the main reasons?  Answer:  Lack of capital and poor management of capital.  Business credit helps you through the rough times of your beginning business. It will allow you to meet payroll, keep you from hitting up your relatives for a loan, keep your vendors happy with prompt payments and be able to take advantage of spur of the moment opportunities that your buying power can give.

Business credit can be built

Even the newest company can begin getting business credit.  A business credit card here and a vendor trade line there.  All business credit can be reported to Dunn and Bradstreet and can lead to larger credit lines later from banks. It is a slow, methodical process. Business credit isn’t automatically reported or built.  Make it part of your business plan to build your business credit.

©Copyright 2008 by EON & Bonnie G. Price, BA, MLA — Additional information info@businesslinesofcredithouston.com.  Reprint permission granted in part or whole when the following credit appears in full:  Copyright 2008 by EON & Bonnie G. Price, BA, MLA All rights reserved.

So you want to start a business?

Don’t get your cart before your horse. Slow down and plan. Think your business through. Plan for your success.

Here are a few questions to consider:

1. What kinds of services or products will you offer? In the short term and in the long term?

2. How will you best market those products and services?

3. What will be the name of your business? Remember that your corporate name is best general and you can be more specific with your DBA. A “doing business as” is done at the county level while the corporation work is done at the state level.

4. Will you have business partners? Too many will definitely be more complicated. You don’t have to give everyone a piece of the pie.

5. How will your business be in compliance with local, state and federal law? This depends on the type of business you are. Also, if you incorporate out of state, other filings in your state may be needed.

6. Will you have employees? If so, you will need to have a relationship with the IRS for payroll taxes and state agencies that govern employees. Research this for your area. Know clearly the costs of having employees.

7. A business plan? You do not need to write a formal plan or hire someone to write a plan for you at the beginning of your business, but it would be good for you to go through the exercise of writing one to help you think through your business. There are many free guidelines on the web.

8. Have you thought of a logo or a motto for your business? Sometimes a little creativity goes a far way. Run your ideas by your business mentors.

9. Do you have a good bookkeeper or accountant? How will you keep the books? It is hard to switch horses in the middle of the stream. Think this one through and have it in place at the very beginning.

10. How will you handle your online presence? Web domain names and website development and hosting can be inexpensive at the beginning. Don’t just jump into hundreds of dollars of tech fees each month at first.

As always, if you need any advice on getting your business started, visit us at www.eonbusinesslinesofcredit.com or call 713 839 8188 soon.

©Copyright 2008 by EON & Bonnie G. Price, BA, MLA - Bonnie G. Price, Operations Manager EON

- Additional information info@businesslinesofcredithouston.com.  Reprint permission granted in part or whole when the following credit appears in full:  Copyright 2008 by EON & Bonnie G. Price, BA, MLA All rights reserved.

Question: What’s so good about America?

Answer: Small business.

The backbone of the American economy is small business. By last estimates, over 20 million small businesses account for 39 percent of the country’s gross national product and create two out of three new jobs. Small business pays 45% of the total U.S. payroll. Think of the other countries of the world. Not one of them can boast of small businesses like the United States can. (www.smallbusinessnotes.com)

Small business starts with the opportunities that America gives. Small business starts with the dreams and innovation of families and individuals. It is the desire to be one’s own boss, control one’s own time and money. It is the entrepreneurial spirit that gives way to success. The freedom of small business doesn’t come easily or cheaply. It needs knowledge, support and finances. It takes determination and hard work to ferret out the proper resources and associations. Groups like those listed below are great resources to look into as small business owners:

Small Business Administration

http://www.sba.gov/index.html

IRS

http://www.irs.gov/businesses/small/index.html

Inc.com

http://www.inc.com/resources/startup/

Smart Biz

http://www.smartbiz.com/

Score

http://www.score.org/index.html

National Association for the Self Employed

http://www.nase.org/

Houston Business

http://houstonbusinessdaily.com/

Take the time to investigate resources you have as a small business owner. Take time to network with other small businesses in local networking and chamber of commerce groups. You will glean knowledge from others who have been down the roads you want to travel.

Small business can become large business. Prepare to take your business to the next level. Remember that Bill Gates once sat in his garage tinkering with an idea.

If you need help taking your business where you want it to go, call 713-839-0001. We’ll take you there!

©Copyright 2008 by EON & Bonnie G. Price, BA, MLA — Additional information info@businesslinesofcredithouston.com.  Reprint permission granted in part or whole when the following credit appears in full:  Copyright 2008 by EON & Bonnie G. Price, BA, MLA All rights reserved.

Isn’t a DBA good enough?

Bonnie G. Price, Operations Officer EON

 The answer is no. A DBA or “doing business as” registration with the county is necessary to assure your business name is exclusive to you, but it is not the same legal structure as incorporation. Incorporating has many benefits to even the smallest of businesses.

 The foremost reason for the sole proprietor to incorporate is to substantially reduce personal financial liability. Establishing a corporation places a wall of protection between your personal finances and financial liabilities and your businesses finances.  In the case of your business stumbling, failing or being sued, a corporation can shield you from the seizing of personal assets including your home, car and bank accounts. 

Secondly, more tax options exist for corporations than for the sole proprietor or partnership.  Many corporate structures offer tax benefits for health insurance programs, retirement plans, and leases.  Some corporate structures are more advantageous than others. Generally speaking, S Corporation or LLC distinctions from the IRS will give you a good hedge against being taxed double.  Checking with corporate tax professionals will begin to educate you on these benefits and will help you determine how to structure your bookkeeping system accordingly.

Third, your credibility and name is at stake as a business.  Being incorporated speaks volumes to clients, customers and vendors.  You are thinking large, long term and successful when you think about being incorporated.  When you add to your corporation credentials with your business D and B number and Paydex score, you will be competing with the big dogs of business! Get off the porch and incorporate! In most states, it only takes one person to become a corporation.

Lastly, your corporation’s ownership can be transferred or sold.  Your business can have a life that continues beyond its original founders. It can have unlimited life. Think of your business as your own legacy! 

Incorporating is a wise move.  It does have a small price tag on it, some legality and there is some paperwork involved, but it is well worth it.

©Copyright 2008 by EON & Bonnie G. Price, BA, MLA — Additional information info@businesslinesofcredithouston.com.  Reprint permission granted in part or whole when the following credit appears in full:  Copyright 2008 by EON & Bonnie G. Price, BA, MLA All rights reserved.

Guard Your Personal Credit

Bonnie G. Price, Operations Manager EON

Most business owners start their businesses with their own dreams and nest eggs.  The trouble with continually funding your business with your own personal credit lines can be extensive.  Business owners need to separate their personal credit from their business credit.  

Typically, a small business owner too often uses personal credit cards and loans to fund needed everyday purchases:  computers, copiers, office furniture.  Some will even have put up their personal home as collateral against a loan to fund the business.  When the business is slow to grow, stumbles or fails, the small business owner and his or her family is personally affected.  Protect yourself from personal bankruptcy by making sure that your business credit is separate from your personal credit.

Placing business items on personal credit cards can lower personal credit scores which are very sensitive to debt to balance ratios.  Basically, any credit card where more than 30% of the limit is used begins to negatively affect personal scores.  Personal scores would affect a person’s buying and refinancing abilities for large items such as homes and cars for certain.

Do not risk the lowering of personal scores by using personal credit for business needs!  The solution is a long term plan to establish business lines of credit.  Business or corporate credit can be obtained and reported to Dun and Bradstreet, the leading credit reporting agency in the U.S.  Lenders, suppliers, and business to business transactions look to the D and B rating and Paydex score to determine interest rates, loans and leases.

The Paydex score is similar to a personal credit score.  In this case, the number 75 or higher is optimal on a 1-100 scale. Paydex scores are not determined by debt to balance ratios but instead to how well the company pays their bills.  Actually, the faster the bill is paid, the better.  Also, the goal would be to have about 5 trade lines in good standing at all times. 

The first step to establishing corporate credit is, of course, incorporating your business.

©Copyright 2008 by EON & Bonnie G. Price, BA, MLA — Additional information info@businesslinesofcredithouston.com.  Reprint permission granted in part or whole when the following credit appears in full:  Copyright 2008 by  EON & Bonnie G. Price, BA, MLA All rights reserved.

The Price of Business radio show is proud to announce the addition of Vicky Hennigan and Jon Moreland as one of our program’s new Advisors who specializes in credit recovery issues. 

Vicky Hennigan

Vicky Hennigan graduated from Hardin Simmons University in Abilene then received her Master’s of Education from Sul Ross State University.   She taught for 14 years before entering into the business world.  Vicky co-owned North American Media Corporation with Jon Moreland forming a friendship and partnership lasting over 17 years.  Currently, Ms. Hennigan is a co-owner of EON, E-Opportunity Network, offering Business Lines of Credit and Credit Restoration. A lifetime of sales, entrepreneurship and education has lead Vicky to a place where she wants to help others succeed in business by offering the tools and training essential for reaching goals and achieving true success.

Jon Moreland

Jon Moreland brings over 17 years of financial business experience to the small business owner.  He has been the vice president of a publically traded wholesale mortgage bank, vice president of a national commercial lender, been marketing director for several small businesses.  Jon is the vice president and co founder of E Opportunity Network, EON, and specializes in obtaining business lines of credit and supporting services for small to medium size businesses in the Houston area.   His financial, marketing and sales experience offers solutions to the business owner’s everyday issues.