The First Thing You Need to Do If You Want to Grow Your Business

The First Thing You Need to Do If You Want to Grow Your Business

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So it’s Friday evening and you are back home after a long week of work in the shop. You’ve decided to take the weekend off, leaving the shop’s management solely to your more trusted employees.

As you sit at the kitchen table on Friday evening with your spouse, kids and the dog in the background, you take out a sheet a paper to formulate some ideas to grow your business. You come up with a list that looks something like this:

  • Add a new location.
  • Add a product or service.
  • Launch a new marketing campaign.
  • Bring on employees with more/new expertise.
  • Cut prices to increase customer volume, which increases revenues overall.

 

But after coming up with these ideas, you now are faced with the daunting task of financing all or some of the ideas, depending upon which one(s) you are looking to implement.

This is when you must do a very important procedure first, before going any farther down this “growth path” — you need to check your business credit. Checking your business credit will allow you to see the information that potential creditors will see when they pull your business credit report, which will allow you to estimate how much money you can actually access, the quality of the terms as well as the types of funding that might be available (or not available) to you at the moment. There are a lot of different kinds of funding out there — we made a chart to help you understand business financing options at a glance — and finding the right one is essential to keeping your bottom line intact in this growth phase.

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Do You Even Have Business Credit?

Before you can even check your business credit score, you first need to make sure you have one.

The moment an individual with a Social Security number applies for their first form of personal financing (credit card, student loan, etc.) a credit profile is created and continuously updated by the major personal credit reporting agencies of Experian, Equifax and TransUnion.

But with your business credit, you do not automatically get a business credit profile (you may have to create one on your own) and you have to make sure that vendors/suppliers/creditors report the information to the major business credit reporting agencies. There are several different major business credit reporting agencies, but two of the big ones are Experian and Dun & Bradstreet. Experian’s Intelliscore Plus and Dun & Bradstreet’s PAYDEX Score are both based on a scale of 1-100, with a score over 80 being considered the best business credit tier. If you don’t have a business credit profile created, Nav can help with free tools that help you establish and build business credit.

How to Check Your Business Credit

If you’ve already established a business credit score, here’s how you can go about checking not just your scores, which are used by lenders to determine your loan terms, but your credit reports, which include the raw information that goes into calculating your credit scores.

Unlike your personal credit reports (which you can get for free once a year at AnnualCreditReport.com under federal law), business credit reports are not required to be given to business owners for free. So, you’re likely going to have to pay for your report if you go directly to the e bureaus that maintain your profile.

You can also use Nav to check your business credit reports from Experian Business and D&B — a free account gives you a snapshot of your business grade. You can get started for free by signing upon Nav.com and using self-serve tools related to building your business credit:

  • BusinessLauncher: Helps organize your business growth ideas into actionable plans.
  • Goals: Outlines strategic goals to help you improve your business credit score.
  • Disputes: This tool guides you as you dispute errors that are listed on your business credit report. Disputing errors on a business credit report is a bit more complicated compared to personal, as many times, names of vendors aren’t listed, just their “category”. But you still have the ability to dispute errors to the major business credit reporting agencies if they are present.

Ready to see your credit data and start building better business credit? Check Your Personal and Business Credit For Free (No Credit Card Required).

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About the Author — John Tucker has over ten years of professional experience in Commercial Finance and Business Development. Tucker is also an M.B.A. graduate and holder of three bachelor's degrees in Accounting, Business Management, and Journalism. To connect with John Tucker, feel free to send him a connection invite via LinkedIn at: www.linkedin.com/in/johntucker99

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