LLC or C Corp?

Everyone knows that a limited liability company (LLC for short) is
better then a C corporation, right? LLCs are being billed as the
hottest thing.. as a hybrid of the best features of both having a
shield against lawsuits and at the same time not having double
taxation....

Did you know that if you have an LLC in many states there is a
publication requirement? this means you must shell out money to
publish to the formation of your limited liability company in the
newspaper of the choosing of the court or clerk. failure to do so and
pay the associated fees, which can run well over a thousand dollars,
makes your company lose the right to sue anyone, for anything, ever.

Of course... you can still be sued. You just can't sue anyone, no
matter what, if you did not publish its formation within several
months of its incorporation. (state laws vary.)

If you have a corporation, whether a corporation or a limited
liability company, and are a start up business owner its very easy to
mistakenly commingle personal and corporate funds. this means that you
use the company funds as personal funds, or transfer money in and out
without an valid explanation each time for the transfer. if your
company is sued and commingling is proven (ever paid your phone bill
from the corporation bank account?) your corporate veil is pierced and
you are now fully personally responsible as if there were no
corporation at all.

These are just a few of the dangers you should be aware of when
starting up your small business. I hope you found this useful-- I'd
appreciate your comments!

To Your Credit,

Ted

P.S. If you are ready to incorporate - one of the most cost effective
ways is through MyCorporation - owned by the same folks who brought you
QuickBooks. They'll do the job right while saving you from going to a
lawyer. One thing though - forget the "Get Federal ID" option. It's easy
to do yourself and only takes a few minutes. You can even do it on the
phone - MyCorporation charges you $65 for this - you can use the money
you save to buy my Business Credit Secrets book and still have cash left
over for a nice lunch. For the whole story on MyCorporation, please visit
their website below:

• Should they buy a business to expand their existing ones at these insane prices?
• Should they sell their not-so-profitable businesses to focus on ones that are making them money?
• Or, should they be doing something else to generate liquidity and salt away that money for six months to a year and invest it in the business under more favorable conditions?

When I was in New York last month, I spoke to a kitchen cabinet installer. he was telling me that while business was slow, the boss was keeping the 10 man team in place. He had actually taken out a loan against his life insuarnace policy to keep the team afloat. The boss did caution however, that if businesss does not improve over the next several months, he would have no choice but to layoff the staff.

The bigger and more successful a business was in the last up cycle, the greater their monthly overhead costs for rent, equipment and staff salaries. So many companies moved into posh new office space and hired additional support staff, which has now become a major drain on resources.

The reason that the above story is important; think about if you were looking to buy a busisiness and came across the kitchen business I just spoke about. Would it be a good investment?

They have a good product; they have a staff in place; they have a repeat client list; yet they are falling apart. Its a very scary situation these days for practically all small business owners and entrepreneurs.

And yet another twist; those businesses that are now loading up and growing by servicing the counter-cyclical industries are booming to the extent that they are in the same balloon many business owners were in just a year ago… they think their good time will last forever… they won’t.

As I drive past shopping centers with so much space for rent and stores, many with name brand recognition, are shuttered and having liquidation sales, it makes me wonder…

Where do we go from here? And the truth is… I don’t know.

But I do think that no matter which way the market goes from here, it is a good time to analyze all your options, prepare some liquidity, and contingency plan for the next stage of this wild ride.

I know that many of you are at a crossroads as to what do do from here…. I want to hear your comments and thoughts on this!

To Your Credit,

Ted

Here are 7 quick tips to help you build business credit and get approved for new credit faster.

Catch the underwriter in a good mood.

When you get an Underwriter that you find helpful, call them back a day later and request a credit line increase for other credit cards which the same lender is underwriting. For example, Staples and Office Depot are two different cards which have the same issuing bank.

Sign Up For Mailing Lists.

Sign up for a company’s mailing list. Then when the catalog comes and you want to make an order, then call the company and place the order. When asked for payment details say “invoice me”. You have a much better chance of approval at that point.

Check your Checking Account Balances Before Applying

When applying, make sure your business checking account is positive, and has a balance of $500 if possible. This will allow the bank to verify that you have money in the bank.

Use It or Lose It

Use the tradelines you are granted. If you do not utilize the tradelines you have, banks will see you as a liability and an unnecessary expense, which they will use to cut down your limits significantly or even close your accounts totally.

Pay Small Invoices Quickly

You should always make sure to pay small bills which are sent by D&B reporting companies as soon as possible. this is because your Paydex score will get a boost from the early payment, with an additional boost for each and every day earlier then the date due o which you paid.

Which means that sometimes, paying a $33 NEBS invoice 13 days before the due date can have a major positive effect on your Paydex score, while in fact being an insignificant amount of money which you can easily afford to pay earlier without any negative repercussions in your business.

Show your companies strengths.

Make sure your company has a professional looking website. Put your best foot forward. spend thirty to sixty minutes creating an accurate bio, profile and description of your company, while yet making sure you are seen in the proper image that would make your account applications easily approved

Call your vendors on your birthday.

When it’s your birthday, make sure to call your credit vendors, on both your personal and business cards. When the underwriters realize it’s your birthday, they almost always translate that goodwill into an increased limit, better terms, or even a past late fee or negative reporting wiped clean.

Here’s to YOUR credit!

Ted

P.S. If you need a step by step guide to building business credit - why not try Business Credit Secrets? My no fluff - no nonsense report shows you how to build a strong business credit rating in the shortest possible time. I don’t use or recommend tricks or gimmicks that could lead to trouble - just good, sound practices every business should use. Click here to check it out now.

Companies must ensure that they can access the capital they need. When the markets are undergoing such serious changes, it is of utmost importance that small business owners make sure that their credit lines and net terms are not reduced. Many lenders and suppliers, feeling the heat, are tightening terms significantly.

What Can Entrepreneurs do To Ensure Continued Success to Credit?

Make sure your D&B Report is up-to-date and containing no misinformation. I have seen reports containing information belonging to other companies, which is especially possible when the company has a very generic name.

Keeping your Paydex score above 75 will help you keep your existing vendor credit lines.

Paying invoices payable to reporting companies before they come due will increase your score, and allow you to obtain leases and lines of credit even in the turmoil of these markets.

Business Owners can check their business credit reports and Paydex Score online at http://eupdate.dnb.com

A DUNS number enhances the credibility of your business in the marketplace because it shows others that your business is credit worthy. Many major corporations require their suppliers to have a DUNS Number, as does the US Government. While many small bsiness owners mistakenly think that obtaining a D-U-N-S number costs money, it is actually issued free of charge.

A Blog is something I have been dreading. Do you know why?

It’s because, a blog is a commitment… unlike when writing an article for a forum or newsletter, a Blog carries with it the ball-and-chain of making the commitment to constantly post fresh material and new ideas…. But then, on the sunny side, it allows for a much greater level of interaction with you, raising the profile of Business Credit Secrets and myself, and allows you, the reader, to find our site….

I’m betting this interaction with you is well worth the committment of keeping this blog up. What do you think?

Feel free to ask any business related question you have on your mind!

To Your Credit,

Ted Aberle