Facing uncertainty can be challenging – being a business owner facing uncertainty is tougher.
Red Direction helps you [fast track and] grow your business – authentically, pragmatically, and resiliently.
Starting the conversation…
What is the true power of business credit to scale and grow a business?
Host: Jess Dewell
Guest: Stephen Wible
What You Will Hear:
Everyone avoid talking about business credit.
It is difficult to finance growth.
It is a myth that we can’t get credit without cash flow.
Your business credibility can be improved by taking these 5 steps.
#VBBRadio Live Question – How can I create a strong business credit profile?
Live Audience Question: When we talk about business credit it’s always how to use it best, eventually we have to pay them back. What are some insider tips?
Manage your cash flow and use credit to expand.
Be ready to take advantage of opportunity by planning ahead for how you will finance.
Make your plan to achieve the growth you want next year…now.
Live Audience Question: My credit is what it is. Can you give words of wisdom about finding credit?
Be more lendable and fundable. Get your business credit.
Find your starting point to know what your business credit is to decide what to do next.
What makes it BOLD to actively take action to become fundable?
Notable and Quotable:
Jess Dewell 3:47
Being fundable is such an important part of scaling, and preparing to scale. And it also helps position us at which point in time we are looking to enact our succession plan, as well as exit and find somebody new who wants to take our business to the next level.
Stephen Wible 4:39
What I see most, is people will come to us when they need the credit now as opposed to planning for the future. So they’re looking for it when they need it, as opposed to preparing for it, so that when it comes time to need it, you’ve got it.
Stephen Wible 5:02
SBA statistics show that over 50% of business owners will be out of business in the first five years, and over 80% of them that go out of business because they didn’t have the funding to grow. Because if you’re not growing, you’re dying.
Stephen Wible 5:17
Look at the cost of living. If you’re making the same salary for 10 years, right, you’re actually going backwards. Payroll goes up. Your expenses go up, Electricals go up. So you need to increase the revenue. And it’s difficult to finance that sometimes. So every business owner at some point in their life cycle, will need funding.
Stephen Wible 5:40
What most people don’t understand that they can get credit that’s tied to the business, not to them personally. That’s a shocker to most people. What do you mean not to me personally? Nobody’s going to check your personal credit. Nobody cares who you are. It’s all about the business.
Stephen Wible 6:52
The number one thing we hear is, “Oh I don’t have an established business. I can’t get business credit.” That’s completely wrong. I could start a business today and build my business credit upset in six to nine months I’ve got $50,000 to $75,000 in credit with zero cash flow. Zero.
Stephen Wible 7:41
There’s funding, and then there’s business credit. Business credit is credit that’s tied to your [business], not you personally. And there’s tons of it out there.
Stephen Wible 9:42
Walmart is the number one purveyor of business credit. When you walk into their store, you buy something that’s on their shelf, they have that on credit. They didn’t pay for it. You pay them, they eventually pay the vendor who supplied that product. And they’re the biggest retailer for a reason, because they levers that
Stephen Wible 9:56
The name of your business can directly affect how much credit you can get.
Stephen Wible 11:52
All business credit, especially the beginning stages, it’s all approved through artificial intelligence. So it’s going to look for certain red flags. First one is your name. You don’t want to talk about obviously gambling or gun or pharmaceuticals or things of that nature. And that’s real simple. Your name is your name.
Jess Dewell 13:43
If we’re going for SEO online, we want the real estate investing in our name. If we are going for growth and longevity, we don’t want real estate investing in our name. So there’s no right or wrong, there’s getting what you want for your growth easier, or not.
Stephen Wible 14:11
You can have Oak Tree Enterprises and then a DBA of Stephen and Jess’s Real Estate Investing. So your marketing piece can be Steven and Jesse’s Real Estate Investing, but your corporation or your S-corp or your LLC, or whatever, is Oak Tree Enterprises.
Stephen Wible 15:11
When most business owners start their business, their business number — you look at a business card — it’s always their cell phone. Always, always, always their cell phone. The problem with that is, that’s an immediate denial. What you can get is called a virtual phone number. We recommend Ring Central, Grasshopper, places like that. You want to list that with the National 411 database And lenders, it’s the first thing to check.
Stephen Wible 19:02
I’m going to repeat it again for your listeners, you want to go to a company like Ring Central dot com, and or Grasshopper. When you speak to them, is this listable of all with the National 411database? You want to ask that very specific question, and they will have the answer.
Stephen Wible 19:21
The more you put on a credit application, the better it is. It’s like checking off the list. You don’t just want a local phone number. You want an 800 number. And if you’re so inclined to fax number.
Stephen Wible 22:41
I am amazed that only 40% of business owners I talked to, especially the small business owners will run everything through a personal checking account. You got to be kidding me. You’re setting yourself up for disaster on multiple levels. I’m not an accountant or an attorney, but come on. You’re going to be in business, be in business.
Stephen Wible 26:45
The last thing that I want to talk about as far as credibility goes is your address. Everybody makes the same mistake. When they don’t do this properly, they go get a P.O Box. Because that’s an automatic and the number one red flag that lenders look at. Nobody wants to lend money to a P.O. Box.
Jess Dewell 29:16
By having all these little boxes checked ahead of time, it actually positions you better when you’re planning for exit, or succession, or things like that.
Stephen Wible 29:43
One of the things that the artificial intelligence does, is it searches the entire internet quickly — 10th of a second — to make sure everything matches, everywhere. So you need to go back and adjust if you changed your address, everything with the IRS, the Secretary of State, your bank, your phone number, your website, all addresses must be congruent, as well as your phone numbers. They all have to match.
Jess Dewell 38:06
When we put the money that we have access to work, we’re able to free up and have the cash flow we need for any ups and downs in revenue. Since it’s not always consistent, it also allows us to take advantage of opportunities quicker, because sometimes opportunities have a very finite window.
Stephen Wible 39:15
Building business credit isn’t about just borrowing money. It’s not even about borrowing money. What it’s really about is, were you prepared for it when it showed up on your doorstep. And if you’re not prepared because you didn’t have the cash available or the credit available, you may have missed out on opportunity to make an extra six figures this year or seven figures even, because you missed that opportunity because you didn’t have the funds. So when people come to us and say, “Look, I need a loan and I need a loan right now,” I want to get into business credit but ask where were you 6, 7, 8, 9 months ago, when you could have built your business credit,? You weren’t preparing for the opportunity that’s now in front of you.
Stephen Wible 39:49
You never want to look for money when you need it. You want to look and be prepared to get the money before you need it. That is the number one skill set that most business owners don’t do.
Stephen Wible 40:44
You need to plan for the negatives and or the opportunities. I’ve seen more business owners go out of business just because they had to dig into their own pocket to survive. Don’t do that. Your money should be your money and should stay there. Make sure you’re controlling your cash flow. And the best way to do that is to have credit
Stephen Wible 44:36
If you, as a business owner plan, on doing any business with a government entity above the County level, you better have a strong pay your bills profile, because that’s the first thing they’re going to pull. You pay your bills. That tells them whether your business pays their bills.
Resources:
Tags:
business credit, growth strategy, business planning, funding, focus, discipline, thinking, decision making
