Before Starting a Business, Get Your Credit Where It Needs to Be

June 15, 2016

1:15 pm

When graduate from college, you have two options:

  • to search for your dream job at top enterprises and hope your knowledge and skills will be enough for them to hire you; or
  • to risk and start your business, better known as a startup today.

Which would you choose?

If you read this, you’ve made a choice already. Launching a startup is easy, and dozens of guides have been written to help you. Most of them provide one and only tip that makes sense to them: just take the first step!

Easier said than done.

Yes, you don’t want a job working for “the man”; yes, you want to become a great entrepreneur even if your business is small; and yes, you are inspired by examples of Bill Gates or Steve Jobs who were young and reckless to risk and avoid all obstacles on their way to success.

But still…  What do you need to startup? What are those worldly duties you need to know before launching?

First Things First

Any Tom, Dick or Harry can launch a startup in a few hours. All they need is a computer and Internet access, and that’s it: they consider themselves entrepreneurs already. What they forget about is a startup capital.

You have two variants for getting money on your business:

The latter one is quite challenging, especially if your credit score leaves much to be desired. So, if you plan to get a business loan one day, make sure you manage your credits properly and protect your identity from scammers.

Money’s In Pocket. What’s Next?

Once you’ve got a loan for your business, you should know how to manage your business credit.

These tips will help you succeed.

1. Create Your Business Credit File

You need it for financial institutions to find all necessary information about your business.

Plus, make sure you’ve taken care about these steps, including:

  • your startup name;
  • your employee identification number;
  • registering your trade name;
  • getting a license;
  • asking localities about permits;
  • completing a tax form;
  • getting a business bank account.
2. Take Care of Your Credit History

Even if you have some credit, your business loan should have a separate history. All you need to do it establish it and save the information about all expenses you spend on your startup.

3. Always Pay On-Time

Good payment history is a must for every startup. Try paying the bills in time and using your credit lines carefully.

4. Update Your Credit File Regularly

Always check your business file for changes, as it may affect your relations with financial institutions, customers, and partners. Make sure the information in this file is up to date (your location, the number of employees, etc.)

Why Your Credit Management Is a Must

Some younger people don’t understand the significance and necessity of credit management. It helps, however, to solve several problems and make startups more profitable.

For example, your business credit management:

  • helps to get more finances from investors;
  • helps to build trust with your audience;
  • helps to protect your start-up from spammers and thieves;
  • helps to plan and make further decisions; and
  • helps to avoid problems with banks and other financial institutions.

Launching a startup after graduation from college is challenging and risky by all means. Anyway, with all informative resources, tools, and instruments available today, the process will not look so difficult. Take the first step, take care of your start-up capital, and make your dreams come true!

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Lesley Vos is a blog writer who creates content on the topics of education, tech, writing, and self-development. Lesley is going to publish her first book this year, and she can't imagine her pastime without reading.

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