Posts Tagged ‘Financing’

photo credit: Logan Cyrus

Most people don’t know the right way to go about building credit for their business. They do several things that might actually hinder their chances of obtaining credit, or they simply don’t do the simple things that would ensure their business credit. To help in light of the current credit crunch, below is a suggestion list on mistakes to avoid when building your business credit.

Many businesses don’t realize just how important it is to select the correct entity for your business. This is not only the most important step in obtaining future credit, but it is also extremely important to your business come tax season.

If you have inconsistent information on your business paperwork and forms, this will greatly reduce your chance of getting any sort of business credit. Banks want to see consecutive information that is well put together and sorted, this tells them that the business is not only in good standing but that the owner truly does know how to run a business.

Some businesses have made the mistake of building credit with the wrong vendors. There are thousands of vendors out there to choose from, but only about 6,000 of them actually report to the credit bureaus. So you may be in good standing with your vendor, but if they don’t report it then it really doesn’t do you much good for your credit, as stated on ActiveRain.com.

Selecting the wrong SIC code. There are certain codes that the business credit bureaus and lenders tend to stay away from. These industries include real estate investing, car sales, adult entertainment, travel, lending, restaurants, and dry cleaners. When you classify your business be sure to stay away from these classifications.

From Business Opportunities Weblog.

The New York Times:

Kickstarter, a Web site that helps connect aspiring artists with patrons who finance their projects and often receive some tangible memento in return.

But it’s not just artists who are using the platform. Some small businesses and entrepreneurs see it as a way to raise money to supplement and support their business in new ways.

One of Kickstarter’s earliest success stories was Polyvinyl Record, an indie record label that has released albums by of Montreal and Asobi Seksu.

Polyvinyl recently used the service to offload extra albums that were piling up, said Matt Lunsford, co-president of the company. “We had a lot of overstock from our worldwide distributors who weren’t selling as much as they once were,” he said.

Faced with either paying exorbitant storage costs to house the 10,000 albums crammed into the company’s warehouse or destroying them, Mr. Lunsford decided to try to clear the surplus inventory through Kickstarter, which he had heard about from one of its co-founders, Yancey Strickler, who was also a friend.

“We thought, why don’t we find a way to get these records out to people at a low cost instead of destroy them?” said Mr. Lunsford.

The company structured its reward packages for donors to resemble a clearance sale — for a $5 payment, patrons received a concert DVD; a payment of $15 or more would get five albums and a concert DVD. Mr. Lunsford said the company originally set a goal of raising $1,000, figuring that would sell enough of the backlogged albums to clear out the company’s stockroom.

Since then, Polyvinyl has been using Kickstarter as a way to test whether there is sizable audience interest in an album before making copies of it.

Photo by Kickstarter.

From Business Opportunities Weblog.

ABC2News:

It is said that “necessity is the mother of invention.” So, with two kids in college, our family is inspired to get creative in our search for ways to help pay for higher education.

Along the way, we’ve discovered that a unique hobby, special skill or unusual interest could be the ticket to financing a college education. It’s a way to get rewarded for exactly what sets you apart from so many other people.

• If you love all things grape, the American Society for Enology and Viticulture offers numerous scholarships to students whose majors emphasize the science of the wine and grape industry. Awards vary from year to year.

• If duck calling is your calling, the Chick and Sophie Major Memorial Duck Calling Contest awards $1,500 scholarships to high school students who excel in duck calling. The fund awards $1,500 to the first-place caller; $500 to the first runner-up, $300 to the second runner-up and $200 to the third runner-up. Contestants have 90 seconds to show the judges their best stuff.

• For the more inventive student, one undergraduate and one graduate student are awarded $15,000 in scholarships for winning the Collegiate Inventors Competition. Entrants present a plausible new idea, process or technology to a panel of judges from the fields of mathematics, engineering, biology, chemistry, physics, information technology and medicine. Criteria include the project’s potential value to society.

• Who says fashion and duct tape don’t go hand in hand? Duck brand duct tape selects ten finalists each year from photos sent of couples dressed in formal wear fashioned entirely from their tape. Online visitors then vote for their favorites. Each of the two entrants who make up the couple getting the most votes receives $3,000 toward college, as well as a cash award for their school.

Photo by Duck Duct Tape.

From Business Opportunities Weblog.