Most people think the only way to establish credit is to get and use credit cards. But these convenience cards can be deadly if not managed. For businesses, a line of credit may be a better consideration. The bank will stop you when you reach your limit. Credit card companies just smile and raise your spending limit.
For new small businesses, consider the alternatives to establishing credit without using a credit card. While this is a slower process, there are real advantages.
You cannot spend more than you make.
You have to budget your money.
You will have a better relationship with your bank.
You will learn to adjust your markup to reflect the costs, and cover your debt.
Your business can benefit from this. As it grows, you will have a solid, clean credit history when it matters. You will have learned the difference between want and need. Yes, even business owners get caught up in this cycle.
For example, you may not need a laptop on every desk, and a slick server. You could get by with cheaper desktops, and a tower with server software and enough memory. You could learn that not all employees need Internet access daily to do their jobs. Email access is sufficient.
This is a term known as 'bootstrapping'. Once a popular buzzword, and a term of honor, in some business circles, it is unpopular. We concentrate so much on employee satisfaction, we forget that a simple 'thank you', or 'good job' does more for a person than Internet and laptops.
Say "Thank You" more to your employees, and spend less.
No comments:
Post a Comment