The following is a business credit story. Most of the time business owners look at having credit as a “safety net” or additional resources to get through a tight spot. Having credit for your business will do just that and you can hang onto your cash. But if your business has strong credit, you have an open door to opportunity. Every entrepreneur understands opportunity… but let’s examine how business credit plays an important role here.
Here’s a a professional service provider and his journey with his corporate credit development.
Last year Neil went to the ERA (Electronic Retailing Association) in Las Vegas and was introduced to a very tight knit community of business people. Neil is a marketing specialist and didn’t have any DR (direct response) experience or an infomercial background – however Neil brings unconventional concepts to life and drives users to businesses. During his stay he met with several interested players who made him an offer. “Let’s joint venture on my next product” – those words said by one of the marquee industry players and an opportunity that could not be ignored. His inviter has made money on every single product project… a new door opens for a fast-moving entrepreneur. This is what business is made of.
In the end, Neil had to forego this opportunity as it would have required that Neil spend approximately $50,000 to perform his piece of the agreement. A line of business credit would have been the perfect medium to facilitate this opportunity expense. the good news is that another opportunity (a bit smaller) is on the horizon and looks to be attainable without extending Neil out of his reach. This lesson taught a successful consultant the value of cash reserves in the form of corporate credit.
When you can spend a year building your business’ credit profile at a cost of $3,000, that represents the ability to respond to opportunity, such as the example above, the credit building journey and expense becomes nominal.
Neil is going back to ERA this year with a solid credit profile for his business and prepared for another opportunity.