Kudos to you for getting your ducks in a row and getting in Formation for 2018! So, let's go!
This post was originally written to help business owners in establishing corporate and business credit, so keep reading if you'd like that info.
Disclaimer: This isn’t financial advice. The Author of this article is not experienced in business law or accounting. Please consult with a professional when these questions arise.
1. NAME YOUR COMPANY - The first step in this process is to select a company name. Be sure you pick one that has not been selected by another company in your state, You can check with you Secretary of State and once that is done you can move onto the next step.
2. ESTABLISH A LOCATION -Your business needs to have a physical location that is not your home address (for building your credit). The UPS store will not work because most creditors have them flagged. An alternative is to get a virtual office in your area. But in the search engine Virtual Office + City. Prices range from $49-$129 a month and some include a phone number too.
3. INCORPORATE YOUR COMPANY - Now that you have selected your business name and have an address you are going to need to establish your corporation with your state. Again, if you don't want Resource link- https://www.feisworld.com/blog/diy-incorporate-your-business-in-4-steps
4. Apply For Your EIN Once you have incorporated your business you will need to obtain a Federal Employer Identification Number. You can file form SS-4 online at the Internal Revenue Service website.- Resource Link https://sa.www4.irs.gov/modiein/individual/index.jsp
5. Get a separate business phone number on Google Voice, Grasshopper, or your local phone provider. - Now that you have a physical location for your business, you will need to establish a utility bill using your newly received EIN and business address. There are many choices for this step of the process.
a) Contact your local telephone companies business sales department and request what they call a Remote Call Forwarding Number. This is a number that the phone company manages at their and is forwarded to a number of your choosing. They will usually charge a setup fee and $10 to $15 per month. Make sure you give them the address of the office that you set up and the EIN number. Also make sure that they will list you in the 411 directory under your address, not theirs. Some of the virtual office spaces will also provide you a phone number.
6. Get your business phone number 411 listed. Resource Link- http://www.listyourself.net/ListYourself/
7. Get a business checking and savings account.
8. Get a DUNS Number- DO NOT PAY FOR ANY OF THEIR SERVICES. Link: https://www.dandb.com/product/companyupdate/compan...
AGAIN, do not pay. Only get the FREE account. It will take 30 days for the number to be generated.
Establishing Credit- Part II
Net30 Accounts are the secret sauce to establishing corporate credit. What are Net30 Accounts? In a nutshell, some companies offer Net30 (starter lines of credit to new companies). “Net 30” day terms you can purchase their products or services up to a maximum dollar amount and you have 30 days to pay the bill in full. Source- Business Credit for Small Business https://businesscreditblogger.com/2011/06/02/net-30-accounts/
Paydex Score- Your Paydex Score is just like your personal FICO number except for your business. You should also make sure you have at least three open tradelines to generate a PAYDEX score on your business. Source- https://www.nav.com/business-credit-scores/dun-bra...
A few Vendors that offer Net30 Accounts to New Businesses to help you establish credit are: Uline, Quill, Gemplers, Give Something Back, HD Supply, Print Country, Global Industrial, Grainger’s, Strategic Network Solutions,
Let’s get started:
1. Open two Net 30 Accounts- Uline Shipping Supplies & Quill Office Supplies. Basically order and check Bill Me at check out.
*Order Small and pay in full ASAP. Paying soon and before the due date will help you build your Duns Paydex Score. The sooner you pay your bills the better your Paydex score will be!
Wait 30 days.
2. Open two more Net30 Accounts of your choice- *Order Small and pay in full ASAP. Wait 30 days.
3. Open two more Net30 Accounts of your choice- Wait 30 days. *Order Small and pay in full ASAP.
Wait 30 days.
Around the 120 day mark. Things should start to look on the bright side and the results of your hard work will start to show!
Establishing Revolving Credit- Part III - Coming soon!
The following resources are also recommended to assist you on your business and credit journey!
The All Access Pass to Tomayia Colvin Education for $19 a month! Unlimited courses, replays, and new content added weekly!
Pricing for Profit Course by Tomayia Colvin to help your determine your rates to make a profit for your business
I'm a Business, Man by Amber Marlow- Running a business, 102. You have the bare bones down, now what? Practical advice about business credit cards, insurance, social media marketing for year two, and turning a profit.
Accounting 101 by Prudence Rufus- This course is designed to provide tools to business owners on how to manage their business finances so that they can be more organized, maximize tax deductions and feel more confident about the numbers so that they can have intelligent conversations with their Accountant, CPA or Tax Preparer.
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