One of the most important things you can do for your business is to keep up with its finances. The number of small businesses who fail due to financial instability are massive.

As part of proper financial management, monitoring your company’s credit is vital for staying afloat. It’s a double-edged sword that must be tended to carefully.

Credit, like bad business, can inhibit your company from growing. If you owe so much in loans and credit card debt, it’s virtually impossible to experience any progression.

Many business owners find themselves in that very predicament; forcing them to file bankruptcy and destroy their reputation.

Companies Who Needed Additional Help

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a) Apple

There are a few major companies who nearly failed because of bad credit and found a way to organize their business. One you may have heard of is called Apple.

Nearly 20 years ago, this company was plummeting by $1 billion annually! They were miserably failing in comparison to their Microsoft counterparts.

However, once Mr. Jobs found his way back to the company, his utter genius helped them escape that insurmountable hole of debt and become the legacy it is today.

b) Marvel

Marvel, surprisingly, was one of the businesses who caught the debt bug. In the 90s, this super company was nearing bankruptcy.

They hadn’t had a hit film in years and their movie producing future was not looking promising. With a little help from their friends like Disney, Marvel rose from the ashes and rid themselves of paralyzing debt.

c) IBM

IBM is another company who lost a total of $5 billion dollars. The now thriving business held the record for the most money lost by a single company in 1992.

The company didn’t give up on their plan. Rather, they hired a new CEO and got rid of over 100,000 employees. The company changed their structure and even lightened up on their morale. They adjusted their credit, budget and spending habits. Now, you can’t keep this company off of the Forbes list.

d) Jack in the Box

Coli was responsible for a major Jack in the Box shut down back in the 90s. You can only imagine the hundreds of scares customers who dared not to step foot into that chain. Because of this scandal, people lost their lives and health.

You can only imagine how much money Jack in the Box lost as a result of that outbreak. However, instead of giving up, they rebranded their chain- implementing strategic food safety regulations to make sure another breakout like that doesn’t happen again. Now, this once bacteria infested restaurant earns nearly $554 million dollars annually. With a little rebranding and money management, this company reinvented itself totally.

As easy as it is to accumulate credit, it’s just as easy finding out how to stabilize it. One way to do this is by learning and implementing tips that will help you regain control over your company credit. If you’re thinking about starting a business or simply need a quick refresher, consider these eight ways you can maintain and stabilize your company’s credit score.

8 Ways to Maintain your Company’s Business Credit Score

8 Ways to Maintain your Company Credit Score

#1 Find Out Where You Stand

The best way to get help is to find out where you are. Check to see where your business stands as far as credit. This will help you to develop a realistic plan of action.

There are many free credit report websites that will provide you with your current credit score free of charge. It’s almost like seeing those numbers in front of you makes the urgency realer. You’ll immediately want to take action as opposed to letting the problem linger.

#2 Legally Incorporate Your Business

If your business isn’t legally registered within your country, you’re not legitimizing your company. Rather, you are hosting a hobby. Many business owners get tax write-offs for products, services and other expenses.

Once you legitimize your business, you may be qualified to receive assistance from the government. This advance may even help to cover pesky debt.It’s imperative to form an entity when you register your company.

Whether you choose between a limited liability company or an S corp, you need specific numbers and registries to become official. Some credit companies won’t even accept your business unless you have these legalities taken care of.

#3 Speak with a Business Mentor

A business mentor can push your business in the right direction. Since they have industry knowledge, they’ll be able to show you where you’re progressing and where you can improve.

When it comes to finances, you sometimes need someone in your corner pointing you in the right financial direction. Many banks provide reliable resources that are designed to help your company get out of debt.

#4 Apply for Reasonable Business Credit Cards

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It is true, you need credit to get credit and you have to maintain your credit to succeed. Because the world revolves around credit, only apply for loans with low-interest rates. Then, don’t exceed its limit.

Make sure you’re making enough to pay back everything you’ve spent on the card. This will make sure you stay within range of your limit and maintain a healthy balance.

#5 Keep Up with Your Score Through D&B

This DUNS number is how credit companies determine your credit position. It’s wise to keep up with this on a regular basis so you know where you truly stand. In addition, it’s also wise to track and report your scores regularly so the D&B knows of any changes.

This is all part of responsible ownership. Your company will benefit from staying up-to-date with where it stands and developing a good relationship with these companies.

#6 Keep Loans to a Minimum

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While it’s not uncommon for businesses to invest in start-up loans, it usually isn’t advised, especially when you aren’t sure if you can pay the amount back.

Because of this risk, it’s suggested to keep loans to a minimum. If you have to take out a loan, pay it back as soon as you can to build your credit. This will give you more room to benefit from your profits and really grow your company.

#7 Pay Off Your Existing Debt

Where you can adjust your credit, tackle it head on. Analyze which lines of credit you can pay off now and make the steps towards doing it.

Don’t waste time when it comes to paying off your debt. Over time, it will only grow and exceed more interest. One way to do this is by making a list with all of your debt.

Then, create a payment plan that ensures that you will pay it off in a reasonable amount of time. Even speak with your credit card company so they can lower your minimum monthly payment. This will make it easier for you to get rid of that pesky debt.

#8 Be Mindful of Your Spending

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Mindfulness is helpful when you’re trying to get your finances together. When you are purchasing items for your business, ask yourself if it’s something you truly need.

Shop around for bargains so you can get the best bang for your buck. This will help you to really analyze what you need and eliminate excess spending.

For business owners, there are countless meditations that can help with developing mindfulness. Many of them revolve around existing in the moment and not acting. When you apply these principles to finances, you are learning how to be less impulsive with your spending and more mindful. This will save you a lot of time and stress should you be tempted to overspend.

Setting an example as a business owner is vital. One day, you may be the person giving others advice on how to spend their money and avoid credit issues. It’s best to get into the habit of productive spending and money management now so you can secure your future.

One key virtue to have is patience throughout this journey. Establishing positive credit doesn’t happen overnight. It takes time and diligence to begin seeing the benefits. If you stay consistent with sticking to your financial goals, you begin to see changes in your credit.

Take Control

Taking control of your credit will work wonders for the reputation and growth of your business.  Just learn from the examples of great corporations and never be afraid to ask for help. If you think you need additional assistance recovering the money owed to your business as you work to improve your credit, consider using an invoice service like InvoiceFinancingAustralia.com.au. Gaining control over your credit is a challenge, but completely worth the effort.

It’s no secret that running your own business is a challenge. These examples above prove that theory. Despite their many setbacks, these major companies all had something in common. They received help from an outside source. Whether it was bringing someone new on the team or reaching out to seasoned leaders, they eventually reached success. All in all, they weren’t afraid to ask or receive input — and neither should you, when your business’s success is at stake.

Author: Sophia Williams

About the author

We do extensive research and share latest small business ideas, future trends and insights exclusively on Fincyte. Stay Tuned!

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