The Growing Edge

Bulk up

8 steps to establish small-business credit.

Establishing business credit is an important step for any new small business and helps to (1) maintain a credit history separate from your personal credit history and experience the business benefits of having good business credit, and (2) demonstrates separation between owners and the business.

By having a business credit history separate from your personal one, you can minimize the effect negative events on one might have on the other. For example, if you have some financial missteps that impact your personal credit history and score, they shouldn’t impact your small business credit if you have established a clear separation and vice versa.

Unless you’re operating your small business as a sole proprietorship or general partnership, you need to demonstrate that the business is separate from the owners. One of the key benefits that corporations and limited liability companies (LLCs) provide the owners is protection of their personal assets. Keep this protection in place by consistently showing clear separation between the owners and the business.

Eight steps to establishing your business credit

• Incorporate your business. Even though you may be incorporated when you’re reading this, it deserves a mention. With sole proprietorships and general partnerships, the business is legally the same as the owner; therefore, there can be no separation of business credit history from personal. Incorporating a business or forming an LLC creates a business that is legally separate from the owner(s).
• Obtain a federal tax identification number (EIN). The EIN is basically a social security number for a business. It is required on federal tax filings, and is also required to open a business bank account in the name of the corporation or LLC. In order to comply with IRS requirements, many larger businesses also require an EIN from their vendors in order to pay them for services provided.
• Open a business bank account. Open a business checking account in the legal business name. Once open, be sure to pay the financial transactions of the business from that account. If you use a business credit card for many financial transactions, be sure to pay the credit card bill from your business checking account.
• Establish a business phone number. Whether you use a landline, cell phone or you use VoIP, have a separate number for your business and in your business’s legal name. List that number in the directory so it can be found.
• Open a business credit file. Open a business credit file with all three business reporting agencies: Experian, Equifax and TransUnion.
• Obtain business credit card(s). Obtain at least one business credit card that is not linked to you or any other owners personally. Pick a business credit card from a company that reports to the credit reporting agencies.
• Establish a line of credit with vendors or suppliers. Work with at least five vendors and/or suppliers to create credit for your company to use when purchasing with them. Ask them to report your payment history to the credit reporting agencies.
• Pay your bills on time. Perhaps it should go unsaid, but be sure to pay your bills on time. Like with your personal credit, late payments will negatively impact your business credit.
  
   

Source: BizFilings by CT

BizFilings by CT is an incorporation services provider located in Madison, Wis. For more: www.bizfilings.com.

An uncomfortable reach

Asking employees to share your social media updates can boost your marketing message. But is it an invasion of privacy?

By Matt McClellan

Encouraging employees to share your company’s message over their personal social media networks can provide a quick, easy boost. Think about it: if a greenhouse has 100 employees and each of them has 100 followers, that translates to instant access to 10,000 people.

While this strategy is unquestionably effective at increasing your reach, is it the right thing to do? There are a few ways it could backfire.

Ryan Holmes, the CEO of the social media dashboard HootSuite, says it’s an open secret among many of the world’s largest companies that their biggest social media asset is already on the payroll.

Holmes uses the employee amplification strategy often at HootSuite, and he shared five lessons learned in a blog post. Read the whole post here: bit.ly/HootShare.

It absolutely has to be voluntary
Holmes is crystal clear on this point. Employees should not be compelled to share or disseminate company messages on their personal social media accounts. But he also says the employees must actively want to share. Employers can show interested employees the potential benefits of establishing themselves as experts in their professional sphere.

Audience alignment is key
Employees must have an audience that actually cares about the messages they’d be seeing. If your inventory manager is posting availability updates and only his Aunt Flo in Arizona is seeing them, that’s not effectively amplifying. Unless Aunt Flo wants to buy some petunias.

Consider social media basic training
The idea of using social media “professionally” is foreign to many employees. Some basic workplace training can go a long way toward breaking the perception that Twitter and Facebook are time wasters and show employees how to build and nurture a network of professional followers.

Messages need to be easy to share
When you do have important news you want to get out and you want a signal boost, you need to make it as simple as possible for your employees to help you. Alert them directly, through email, with pre-approved sample Tweets or Facebook posts.

Use this strategy judiciously
When 75 percent of consumers say social messages directly influence their buying decisions, this kind of marketing is gold. Don’t kill the golden goose. Using it too often can build resentment among employees who feel their personal lives have been hijacked by their job. Reserve this strategy for messages that deserve it — not just bald-face company promotion. Your employees’ followers must continue to trust them. If a particular post or Tweet seems disingenuous, alarm bells start ringing in their heads, and the faith is lost.
 

Correction: Greenhouse Management would like to note an error from last month’s issue. In the Increasing Profits Supplement, Great Lakes Growers’ was incorrectly listed. The company's correct title is Great Lakes Growers and its web address is www.greatlakesgrowers.com.