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Why You Should Improve Your Business Credit Score

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StrategyDriven Managing Your Finances Article | Entrepreneurship | Why You Should Improve Your Business Credit ScoreWhen did you last check your business credit score? Most business owners know that a personal credit score is important but many have never given their business score a thought. According to Experian, 59% of small business owners have never checked their commercial credit score. And of those that had, 56% had not checked their score within the past six months. Why? Most people do not know what a credit score is or how it works. And with so many ways to improve your credit score (check out this article by Business Credit Workshop to see one way) it’s worth knowing about.

But why is your business credit score important? Read on to find out what your business credit score can mean for your business and why you should improve it.

If your business, like many others, relies or may become reliant on loans or credit cards to grow or maintain cash flow, a good credit score is essential. Your credit score gives potential lenders an idea of your reliability using past loans/credit, they look at how you have been with previous repayments and how probable it is that you might pay late or if at all.

Using this data credit referencing agencies then generate your score using a number (usually between 0 and 999 but this can vary) which generally falls under different parameters of Poor, Fair and Good. Instead of flat out rejecting your application for credit, Lenders can also set rates and terms based on this information, in these circumstances this will done to mitigate risk factors such as late repayment, however, this is not always ideal as these rates (interest) are most likely to be higher. For this reason, maintaining a good credit score will increase your chances of gaining credit in the future with better rates. But that isn’t the only reason to make sure your business credit score is in good shape. If your business garners work through tenders, a good credit score can give you an edge over competitors.

There are many things that can affect your credit score from previous late repayments to having no credit lines at all. But whatever your rating you need to know how to maintain and improve your score, nothing can boost your score overnight but getting started:

  1. First thing’s first, if you haven’t already, check your business credit score. There are plenty of services that you can sign up to that will give you an overview of your credit score.
  2. Keep up to date! Depending on the credit checker you sign up to, you may receive monthly reports straight to your email inbox but it’s worth setting a monthly reminder to check your credit score. Take some time to go through any changes in your score, often finding out the issue means you can take the correct action to improve your score.
  3. Keep your information up to date. You might be surprised to learn that changes in location or business status can affect your reliability if your information is inconsistent. So keep up to date with customers, suppliers and any business registration companies and any credit rating agencies.
  4. Not already sharing information with any credit rating agencies? Your company data is important for validating any information on your records.
  5. If your business is in its early days, it is advised that business owners take a look at their own personal data. When little information is available about start-up businesses, CRA may look to the owner to judge whether they are credit-worthy or not.
  6. Avoid late invoice payments. Because late payment terms set on invoices are a form of credit, late payments will impact your credit score.
  7. Collaborate with your suppliers: Suppliers can provide feedback on payment records and share data with CRAs which support your credit score.
  8. On that note, the financial situation of your customers and suppliers can affect your business, keeping up to date with the circumstances of their credit is important for damage limitation to your business in the event that one of those partners go into administration.
  9. Ensure your accounts and tax returns are updated on time.
  10. Limit credit applications or ask for a quote. Whenever you submit an application for credit, that lender does a search on your credit background, each search is then added to your record. Credit lenders usually check to see how many credit searches has been recorded on your record in a certain period of time. Too many searches may indicate that a business is unable to obtain funding which will deter lenders from making a decision in your favour.

So whether you want to secure funding for your business soon or further down the road, getting your credit score in line is the most important step. Even if you don’t plan on seeking loans for your business, keeping your credit score strong is a good idea; if not to secure tenders and contracts for your company, you never know whether you might need a little bit of help in the future.

Garage-Industry: Manufacturing Your Own Products From Start To Finish

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StrategyDriven Managing Your Business Article | Entrepreneurship | Garage-Industry: Manufacturing Your Own Products From Start To Finish

A lot of modern business have turned their focus away from factories overseas, opting to make their products closer to home. Of course, this is a great selling point for a business. And, it’s one that a lot of businesses use to get customers interested in their goods. Tactics like this can often offset the extra costs of manufacturing at home. Especially if you can do it from your garage. This makes most of the operation free, as you’re already having to pay most of the bills. And, it gives you a way to keep your work at home. This is a great benefit to a lot of business owners.

The very first step to taking a product to market is the design. A product needs to be immortalised on paper before it can be made. This is a hard process, and it might require a little bit of help. To make it easier, you can try and enlist the help of a product design. But, with some hard work and sound advice, you shouldn’t have many issues doing it on your own. Of course, there’s a lot to this stage. So, it’s important to take your time.

Concepts
Photo courtesy of Jordanhill School D&T Dept via flickr

Most people can’t draw very well at all. But, this doesn’t mean that you can’t sketch your ideas on paper. Trying to draw something will help you to visualise it much more clearly. It will also help you to notice issues with your design before you start making it. These drawing don’t need to be detailed. They just need to give you a visual representation of your future product. Of course, if you intend on showing these to companies, they should be done professionally. But, that’s easy to have handled if you use a drawing service.

Once you have a rough idea of what needs to be made, you can start making a digital model of it. Once again, this is a skilled field. So, it can be hard to do it by yourself. Thankfully, companies like Autodesk have some easy-to-use 3D modeling software, that can export machine-readable files. You can use this software for free. But, you won’t get amazing results. The best way to design a product is using professional software. This means that you may have to do some learning or have someone do the job for you. In some cases, though, free software could be fine.

Engine
Photo courtesy of Wikipedia

Some people also find that they benefit from making physical models of products. This is something that everyone can do. You have loads of options when it comes to the materials that you use for this. Cardboard is usually chosen by people on a budget, as it’s something most people already have. But, foam is much better. Hard, closed-cell foam is a great material for making models. It’s easy to cut and shape, without having to use tools. It enables you to create a realistic model of your product.

Once you know what the product will look like, you need to do some research. The way that you make a product will have a big impact on the item itself. And, so will the material. Using the wrong methods and parts, it’s easy to create poor products that people won’t want. This makes it incredibly important that you try to make sure know about all of the options.

The materials that you use will be the difference between a product looking and feeling great, and something that is somewhat disappointing. In recent years, plastic has lost a lot of it’s popularity. In the past, it was used because it was easy to work and abundant. But, nowadays, it is associated with cheapness. So, for most products, metal is a good material. Glass is also very good, as it makes a product feel premium. Ultimately, you should be using materials that suit the purpose of your product. For example, you wouldn’t want to make a luxury watch out of a polymer. But, you also wouldn’t want to make a rugged phone out of gold. These are some obvious examples, but you will find that the same applies to your own products.

Different materials will require different machines to be worked. This means that you need to find out which machines are best for the materials you choose. There have been loads of advancements in the ways that materials are worked with. This has had a huge impact on the amount of choice that designers have. In a lot of cases, you want to look for a balance between speed and accuracy. You need your machines to work fast so that you can keep up business. But, you don’t want them to be producing low-quality results because of speed. The machines that you use will have to be bought. So, you need to consider processes that could work for other products, too. Otherwise, you could find that you need more tools as your business grows.

The most important part of the research phase is prototyping. As you choose materials and methods, you need to be testing them. For each material that poses a good option, you should make a prototype. And, if you can, you should make prototypes using as many different processes as possible. This will give you a chance to test each choice before you make the ultimate decision. Sometimes, where one material is good for one product, it could look or feel bad as another one. Making sure that you’re able to test this will ensure that you end up with the best possible quality product.

The prototyping phase should give you a good idea of what you’re going to be using. So, now it’s time to get the ball rolling. But, you still have plenty to think about. First, you’re going to need to get your hands on the machines to do the job. This will involve doing a lot of research, to find the tools that have the best price. At this point, it might be worth asking what your prototyping companies are using. This will give you a chance to make the products exactly the same as the prototype. You also need to think about other tools, as well. Most products need some sort of finishing. This will vary from product to product. For things that are made out of metal, you may need a painting or powder-coating booth. Or, for plastic, you may need a buffing wheel. All of these tools can be found online, and you can get items from Reliant Finishing Systems to get you started.

At this point, you will also need to find suppliers for your materials. Don’t buy these from places that sell to retail customers. Instead, you need to look into wholesale and trade. These sorts of companies only sell to businesses. So, their prices reflect the amount of materials that you will be buying. This will make things much cheaper. Always do a ton of research here. It’s easy to save a little bit on each order, which will mount up to a lot in the future. Just like with your tools, you can ask your prototyping company if they can tell you where they get things from. They may even be able to help you get some money off!

Once you’ve got your machines and materials, you’re almost ready to get started. You just need to make sure that you’re not going to be breaking any laws. Working from home like this may present different rules than other businesses have to follow. If you have a mortgage, you may have to tell the lender what you’re doing. Or, if you lease the property, you may need to tell the owner. And, of course, insurance will be altered by this activity. If you have insurance that protects the building, the risk will be increased for a business. So, if you make these changes without changing your policy, you may not be covered.

Having a business run from your garage is a great way to save some money. Most people have the space to build a small factory, and they don’t even know it. But, it gives you access to your home when you’re working. It allows you to spend less time working, and more time with family. Ultimately, for most people, working like this is the best option. But, of course, you have to make sure that it’s right for you. If you put in all of this time and money, you’ll feel bad if it goes wrong. So, you need to be realistic and make sure that you’re confident in your ability to work from home. It presents certain challenges. But, once they’re overcome, living at work can be a great benefit and a pleasure.

Hopefully, this will inspire you to start designing and making your own products. This isn’t going to be cheap. But, any money that you spend at this point can be considered an investment into your business. And, most businesses can’t start without investment. In future, when you’re making money, this work and time won’t feel like anything at all.

Types of Chargebacks You Should Know About

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StrategyDriven Managing Your Finances Article | Entrepreneurship | Risk Management | Types of Chargebacks You Should Know AboutChargebacks have become a menace for online businesses. You risk losing a lot of money and valuable resources when you don’t pay attention to fighting chargebacks. They are transaction reversals that a buyer issues after purchasing products that did not meet the description or for other reasons. It’s important to know how to fight chargebacks, and if you start with understanding how they occur, you can then put into place preventative measures. Here are some common chargeback types that your business might experience.

Chargeback Fraud

A fraud chargeback is a fraudulent request for a refund in the form of a chargeback. The cardholder disputes a transaction to regain the transactional amount and retain the services or products offered.  A chargeback fraud accounts for a significant percentage of all fraud losses. Chargeback fraud occurs when buyers try to take advantage of the chargeback process. They buy the product and try to get their money back by making false claims for the chargeback dispute. While it could be challenging to prevent chargeback frauds, winning such disputes can be equally hard. You can win the conflict by submitting a response with compelling evidence indicating that the buyer is trying to take advantage of you. Also, make sure that you collect all the necessary information from a buyer.

Merchant Error

Merchant error is among the most common chargeback types. While your employees may not intentionally commit a merchant error, its consequences can be dire. Merchant errors are caused by an array of things, including clerical mistakes and system errors. It could also be anything else that doesn’t satisfy your customer. For instance, goods not received or received in an unsatisfactory way and technical issues with your payment process, causing unauthorized errors or duplicate transactions.

Friendly Fraud

It’s an innocent act that could be costly to your business. Friendly fraud doesn’t involve malicious intentions by the cardholder. Professionals, such as Ethoca can help with the measures needed to fight friendly fraud. Some primary causes of friendly fraud include some friends or family members making unknown transactions or forgetfulness. Sometimes a simple action like an unclear product description can trigger a buyer to issue a chargeback for transactions made. An effective way of preventing friendly fraud or generally any chargeback is to tighten measures on your end.

These are some of the common causes of chargebacks. The bottom line is that you need measures to protect your business from any chargeback. Liaise with the professionals to save your reputation and money.

4 tips for starting a business in a poor economy

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At one point in our life, we’ve probably all been there. The economy is like a rollercoaster, and from time to time you do reach new lows.

Quite often, these lows give some people a new lease of life. Companies are forced to offload employees, and this means that an increased number of people are without work and ultimately asking, “what’s next?”.

Well, for many of these, a new business is one solution. The economy doesn’t make it easy, but it shouldn’t be a direct obstacle that tells you to turn around and do something else.

If you are considering starting a business in this sort of climate, it’s time to read on and find out our four most recommended tips for doing so.

The location is crucial

Without trying to be patronizing, we really can’t emphasize the importance of location, location, location. It’s something that can make or break your business in these tough times, and this infographic perhaps describes it in the best detail:

StrategyDriven Starting Your Business Article | Entrepreneurship | 4 tips for starting a business in a poor economy

No, you shouldn’t be targeting those locations which are faring the best during these tough times, but you need to be shrewd about how your potential market is going to react. If you are selling high-end products, you need to assess whether the area you are about to venture into is ready for these, and vice versa.

Use the economy to your advantage

There are a lot of ways that the economy is going to hurt you during these times, so you should be trying to take advantage wherever possible.

Lowering costs is one of these and whilst negotiating with suppliers, understand that you probably hold the upper hand. They will be feeling the pinch as well, so use the economy as an excuse to get even better deals. Whether it’s rents, products or equipment, this is something that you must use to your advantage to drive those margins up.

Start as small as can be

Of course, if you have major backing behind you, this next point might be invalid.

For everyone else, starting small is crucial advice. If you don’t necessarily need office space, don’t hire it. The same rules apply to employees, as both of these elements are fixed costs that are going to heap pressure onto your business.

Start as small as you can, and scale up when the market signals that it is time to do so.

Watch the competition closely

The competition is going to be an excellent signal on just how you are going to perform in this market. It will indicate just how flat the market is, and provide you any ideas on how you can treat it differently.

Sometimes, it might suggest that the market has become extremely price sensitive – and this might not fit within your business plan. Or, it might suggest the otherwise, and a creative marketing plan is all you need. Analyze the competition and then plan your strategy accordingly.

Don’t Have Your Own Website Yet? These 5 Arguments Will Make You Reconsider

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StrategyDriven Online Marketing and Website Development Article, Don't Have Your Own Website Yet? These 5 Arguments Will Make You Reconsider

The online world has become lucrative for businesses of all sizes and localities. When looking at the sheer number of businesses with websites, it might be shocking to find out that some businesses have yet to go digital.

If your business has not opened a website, the time to do it is now. There are several business-friendly reasons to start your own website. Once you are ready to go, let Decisive Sites help with the entire process.

1. Everyone is Online

Nearly everything is online today. Consider the size of social media platforms and the growing reach of online banks. The immense amount of people are either watching or creating a streaming video on the Internet. If your business isn’t there, you are missing out on opportunities that you might have never considered.

Without a website, your business does not exist online. No one can find you and no one can add to your coffers. Everyone is missing out if your business isn’t available to an online audience.

2. The Internet Never Closes

If you have a brick-and-mortar shop, your business most likely has limited hours. Yes, there are some businesses that are open 24-7, but they require expensive staffing during that time. This isn’t necessarily the case with a website. The Internet never closes, so your online business would be available to anyone at any time. You don’t have to be online if someone wants to buy something from your site. You could wake up in the morning and deal with sales then. But, if you don’t have a website, your sales can only happen when your doors are open.

3. It’s Cheap to Make and Maintain a Site

Websites are not expensive to run. You can get started for much less than you expect. Of course, you can always upgrade to bigger and better things. But, to get started, you don’t need much. It is just as cheap to maintain the site, too. Business owners can do it, or you can hire someone to do that for you. Business owners quickly realize that their website is worth every penny, especially when they start seeing sales add up. As well as being fairly cheap, it’s also very easy to maintain your website as long as you choose the right provider. There are numerous debates surrounding Squarespace vs Wix, but it’s really up to you to see which you prefer. They both offer simplistic, but professional templates that will make your website user friendly and effective.

4. Your Reach Grows

If you have a mom-and-pop shop in your community, your reach is rather small. But, once you open up a website, your reach can grow exponentially. Customers in other states and countries can find you and place orders. This can be an exciting prospect for many business owners.

5. Your Customer Demographics Grow

Along with growing your reach, you can grow your customer demographics. With a website, you make yourself available to people who shop online. Your brick-and-mortar shop might have a customer demographic that is older in age, as older people tend to frequent local shops. But, once you open up a website, your business immediately attracts a younger demographic, simply because young people use the internet. If you can make your website design mobile-phone friendly, then you are certain to grow your demographics to a younger customer base.