Does getting credit give you success in business?
I will never say getting credit for a business is not essential for a company also, I cannot guarantee to obtaining credit will make you a success at the same time.
So everything depends on the status of your business.
A business can have a different status which are;
- Planning to start a business.
- Start-up
- Growing business
- Well established business
1. Planning to start a business.
When you plan to start a business, there are many things to consider, such as:
Niche
Location
Market
Business plan
Cash flow
Finance
Does getting credit give you success in business?
Even though I have put finance as the last one, you cannot even think about a business without the money. Now our question is whether the money will make your success. The answer could be that money will make your success if you are in perfection with the other items I mentioned in the list. So, credit alone cannot make your success.
2. Startup
Here you have already started a business, and I assume you are running it. So, at what stage does the credit come in here and why. Say you are running the business. Are you sure about the market for your product? Then are you monitoring your finances properly? If you happened to make a mistake in the marketing side of your business, you would not have enough sales that mean your income becomes more petite than your expenses. Besides, you do not maintain monthly bookkeeping, which leads to financial problems, and you will run short of working capital. You will need credit at this stage, which means you have obtained recognition to solve your problem. So that does mean that your credit will make you a success, but it has saved you from losing your business.
3. Growing business
When a business starts to grow, it makes the owner motivate. They will want to grow more and more. In that case, they will want to make some financial decisions to create more new products, employ more staff or change the advertising plan; they might be having some savings, but still, they might need credit to add to that savings. You have spent money in the business to make more money. So, if you do everything to suit the company, it is bound to grow more. So, the credit helped the business to produce more.
5. Well established business
They already have good credit scores; they do well in their business and maintain that all the time to keep their good credit score. We are all aware of how important having an excellent personal credit score is for securing finances for mortgages and low-interest rate credit cards, but how are business owners about their business credit score? Do you know how good your score is or even how to go about improving it and managing it effectively?
6. How to improve your credit score?
As an entrepreneur, if your business has a bad credit score, find ways to improve that it is not anything that you cannot improve but the only thing you cannot do overnight, like some of the advertisements says that way. Frequent checking is also essential to ensure that you monitor your accounts properly and check your supplier’s and customers’ accounts regularly. Do not ever delay or fail to submit your reports to the necessary authorities. Monitor your budget and the cash flow often so that you will not go into financial trouble again.
I hope this short article explains the importance of looking after your credit to avoid future problems.
