Credit Building

Factors That Can Help You Build Business Credit

Before embarking on the credit building journey you must have certain things in place. Just like driving a car, you must first get your license in order to drive a vehicle. The same applies here; you will have to complete certain items in place before jumping into business credit. Take a look at The Tax Club's preliminary credit building checklist below to see where you stand:

Preliminary Credit Building Checklist:

• Register your Business Entity with Federal and State
  When you decide to set-up a corporation you must file certain documents with your Federal and State governments. Before you start trying to build business credit, one of the entities below should be set up for legal and tax purposes for your business:

  • Sole-proprietorship
  • Partnership
  • S-Corporation
  • C-Corporation

• Determine your Company’s SIC and NAICS Codes
  The Standard Industrial Classification (abbreviated SIC) is a United States government system for classifying industries by a four-digit code. It is being replaced by the six-digit North American Industry Classification System, which was released in 1997; however certain government departments and agencies, such as the U.S. Securities and Exchange Commission (SEC), still use the SIC codes.

• Secure a Domain Name and Professional Email Address
  A domain name is the 'address' or URL of a particular web site. An example of a domain name is TheTaxClub.biz. It's important to have your domain name, email address and company name be consistent with each other so it is easy for your customers and future credit lenders to find you.

  Example:
  Domain Name: TheTaxClub.net
  Email Address: info@thethetaxclub.net
  Company Name: The Tax Club
  

• Corporate Identity
  Developing a professional website and logo identity is important for every small business. It's truly one of the first steps in creating a brand for your company. If you do not have a professional website in place that answers general questions about your business and you do not have a logo, now is the time to get it done!

  Things to keep in mind when determining your company's brand:

  • What image do you want to portray?
  • What do you want your logo to represent?
  • What colors do you associate with your company?
  • Research other companies in your industry that have similar taste as yours. Do you like what their logo/ and website looks like?
  • Who is your target audience?
  • Will your website and logo design attract your target audience?

• Obtain a Business Phone Line
  A business phone line is much more than a 'phone line', it's an impression you make on your clients and to future credit lenders. Having a business phone line can open up credit building opportunities by reflecting an image of professionalism and indicating to others that you’re serious about your business.

• Business Bank Account
  One thing that every small business is going to need is a business bank account. The reason for this is that your business accounts should always be kept separate from your personal accounts for tax reasons, not to mention other legal purposes. Many small business owners tend to think that it is perfectly fine to mix the two accounts because they own the business and need to get paid, when in reality nothing is further from the truth. Not to mention the fact that setting up a business bank account is rather easy so there is no excuse not to do it. Of course, setting up a bank account for your business takes a little bit of time and may also require you to put out some money for minimum dollar amounts and small fees. But it's time and money well spent.

For more information on credit building strategies, please contact The Tax Club. Learn how the My Business Credit Builder program can position your new business for success.