Happy New Year! At Dun & Bradstreet Credibility Corp., we love new beginnings – a new year means new opportunities for businesses and we are hopeful that this year will bring several positive changes for small businesses. We look forward to quite a few big changes for businesses in America – from Crowdfunding regulations to legislation on both spending cuts and our federal debt ceiling.
Before we get into best practices, take a few minutes to think about your business. Do you have a sense of where your business stands – is it credible? Do you follow through on payments? Do you have solid relationships with vendors and suppliers? Do you have good report with your customers and clients? These are all questions you should know the answer to. If you don’t, spend some time taking stock of your company’s credibility. It’s much better to be proactive about what your business credit file says about your business.Because we are all playing the waiting game for most of these big changes, we have listed below some best practices to help your small business out during these uncertain times. While these practices are always important, they are critical for the new year, as these will help you be prepared if the upcoming legislation does not favor small businesses.changes can bring about a good amount of stress for small businesses, they also provide owners information on how our economy will proceed. Here at Dun & Bradstreet Credibility, we hope that puts small businesses at the forefront of the economy, as we see each and every business as a functional part of economic recovery.
Once you’ve had a chance to critically review your company in light of credibility, focus on credit. First, consider how you are paying your bills. Are you paying all of the smaller ones but are late on the biggest one? This could be harmful to the way others perceive your business, as your business credit report may not comprehensively show your bill payment. It is estimated that only 6,000 of the possible 500,000 possible reporting entities are actually doing so. It could be that the one company you are not paying on time is the one company reporting late payments. This can substantially affect your credit. While it is always best to pay all bills on time, if it’s not possible, consider paying the biggest ones first since it may be easier to negotiate smaller debts. For example, you may be able to call a company and ask for an extension, thus allowing you to avoid a possible late payment report.
Second, make sure you are preparing to function in line with the new healthcare regulations. Most business owners are already aware of this, but as a reminder all businesses with more than 50 employees (100 in some states) are required to provide healthcare to those employees starting in 2014. Small businesses will be required to pay 60% of the coverage costs and the rest are the responsibility of the employee. Additionally, the Obama Administration will set incentives for small businesses with less than 25 businesses so that they too can provide coverage for their employees. Open enrollment is Fall 2013 so you need to start doing your research for your company’s specific requirements and healthcare needs now. You will pay a fine if you do not comply with healthcare requirements.
Third, make sure you are not using a personal credit card for business purchases. While this is a common practice among small and micro business owners, it can put owners at financial risk, as a dip in business revenue can greatly affect your personal credit. Be sure to separate your business and personal credit as otherwise you risk your personal property were something to go wrong with your business. Additionally, when you are using personal credit cards for business expenses, you are not able to build your business credit. You not only risk your personal credit score but you also lose out on using timely payments to build your business credit.
While we all will be watching the headlines to see what happens in the coming months, we can still prepare for the potential changes that may take place. Evaluate your business this month and make sure you are up-to-speed on all things that could help you get the capital you need to grow!