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Most new business people start their venture by creating a business that is an extension of themselves.

 

Not only is the enterprise a manifestation of the entrepreneur’s vision, but it is also, a physical expression of their financial life because they oftentimes use their own assets and credit to get the business up and running. If the business is not started as a corporation (and most are not), then the business’ assets and liabilities become even more inextricably linked with that of the owner.

 

There are many things that can go wrong with this type of financial blend:

 

First, a new business is a risk. By having your personal credit tied in with the business, you risk personal financial ruin if something we

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re to go wrong. By the same token, if you get sued personally, your business would be an asset that your creditors can go after.

 

Second, you limit the growth potential of the business. Lenders and investors want to see that the business is a separate entity, separate and apart from the entrepreneur.

 

The smart move therefore is to separate your business and personal credit as soon as possible after starting the enterprise. The problem is that most people, while knowing how to create and improve their own personal credit, have little understanding as to how to do this for a business.

 

Here’s how:

 

1. Incorporate: As indicated above, for a variety of reasons, it is beneficial for your business to be a separate legal entity, and this can only be done by incorporating. Corporations are stand-alone entities, legally. A partnership is not a corporation and a sole proprietorship is not a corporation. Only S corps, C corps, and Limited Liability Companies (LLCs) are corporations.By incorporating, you begin to separate your personal credit from that of the business.

 

2. Get Employer Identification number: If it is true that your personal credit is tied to your social security number, then it should follow that you need a different sort of number for your business. That number is obtained from the IRS and is called an “Employer Identification number” or EIN.

 

You can apply for one here.

 

3. Open a bank account in the name of the business. Once you have a corporation with it’s own EIN, then the next step is to go to a bank and open a checking and savings account in the name of the business using the business’ tax ID number. (It is critical that you do not use your own social security number here as that would once again tie your personal credit to that of the business, and that is precisely what we are trying to avoid.)

 

In my experience, our friends here at Bank of America are the most small business friendly bank around. You can find their offerings here.

 

Click here to read more articles from small business expert Steve Strauss

 

4. Register your business with a business credit bureau: The main company that tracks business credit is Dun & Bradstreet and you will want to establish a credit reporting relationship with them by getting what is known as a DUNS number.

 

5. Establish commercial credit: Next, put your business credit accounts in the name of the business, using your EIN and DUNS number – telephone and internet, shipping, bottled water, whatever. Additionally, see if any of your vendors will extend you business credit.

 

6. Get a loan: You may want to take out a small loan in the name of the business, simply for the purpose of establishing a good repayment history.

 

7. Pay on time: As we all know, paying in full and on time is how you reinforce a positive credit profile.

 

The good news is that before long, you will have two separate credit profiles, one for your business and one personally, and that is as it should be.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

©2016 Bank of America Corporation

Pro_Network_body.jpgBy Robert Lerose.

 

It's so easy for small business owners to get caught up in the daily running of their operation that they forget to devote time to an essential activity—building and maintaining their professional network. Along with servicing their existing customers, refining their products and services, and staying ahead of the competition, cultivating relationships with people in different fields can lead to new business opportunities.

 

Jonathan Long, the founder and CEO of Market Domination Media, a Miami Beach, Florida-based online marketing agency, recommends these steps for growing and nurturing a productive professional network:

 

1. Announce yourself to the community

Tell your existing network what your business is doing now and what's coming up down the road. A straightforward message sent by email, on social media, or in person at meetings will keep your network informed about and involved in your business—and cause them to think of you first when they need your services.

 

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2. Participate in networking events

Attending trade shows and conferences within your industry is a great way to find people to add to your network under one roof. Also, don't overlook local events and get-togethers. Meeting with businesspeople in your own neighborhood or region may even give you an edge over national competitors. Look for online networking opportunities. LinkedIn and Twitter both have groups where people with similar interests or needs congregate.

 

3. Meet them on their own turf

"Frequent the places that the people you want to connect with can be found at,” says Long. “This could be a particular lunch spot. Be friendly and social and you will make new connections."

 

4. Give of yourself

Be willing to share what you know to help others out, whether offering your expertise or connecting people together—without expecting or asking for a return favor. Demonstrating that you genuinely want to do good for others will motivate them to reciprocate on their own.

 

5. Be diligent about following up

Whenever you make a new connection, follow up promptly. Send an email to express your satisfaction at meeting them and invite them to get in touch with you if they ever need your help—and fulfill any promise that you make.

 

Maintaining a presence among the people who need your products, services, or expertise—whether in offline get-togethers or through online communications—can be an inexpensive but effective way to amass a strategic professional network.

 

Bank of America, N.A. engages with Touchpoint Media Inc. to provide informational materials for your discussion or review purposes only. Touchpoint Media Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Touchpoint Media Inc. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

 

©2016 Bank of America Corporation

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