Building Good Business Credit for Minority Business Owners (Final Part 2)

I provided alot of information in my last blog to lay the foundation for building solid business credit. The next step is what can be done to build correctly and avoid the stereotypical issues and wasted money. My first recommendation is to establish a profile with experian business.

Smart Creditors are starting to become more and more aware of the tactics used in building D&B paydex scores. For this reason, larger companies and banks are leaning on the credibility of experian business than ever before. It would be wise to contact experian business and check your score. If you don't have a score, then properly register your business with experian business online. 

Next, ask creditors in advance which reports do they pull to determine credit. So, it would be to your advantage to build credit in both places (D&B/Experian Business).

TIPS FOR ACTION: Business Credit helps you lay the financial foundation of your company. Once ruined, you almost always have to start over in a new company name. It's true that you can dispute bad information. And it may be removed "temporarily". But the negative information will continue to loom in the background of your "stressors and statistical data". The type of business you decide to start can make or break your report without you knowing it. Selecting highly profitable and growth industries is key to avoiding this automatic red flag on your business credit. Being a corporation (S Corp, C Corp, LLC, LLP etc) is essential. Maintaining annual registration on your corporation is essential.  Having the appropriate business licenses paid and updated on an annual basis is important. Creating a financial statement certified by a CPA and having it added to your business credit report is mission critical. Choosing the right creditors to work with is the game changer. Know whom you are seeking credit from.......interview them and ask questions. 

Finally, stop paying for these services and take the time to do it yourself. Don't have the time? Have your office manager, accountant or some other reliable internal source help you get things started. Register your company with Experian Business & know your creditors. The bulk of what you need to know and how to get started can be found at http://www.experian.com/small-business/services.jsp (view the links at the bottom of the page).

The Experian Business site has a ton of FREE information on properly starting and building business credit and can answer most of your detailed questions.Let me know how this helps you by following me on twitter @FilmWorksCEO  or  http://swandriasimpson.brand-yourself.com/

Black Americans Struggle to Build Business Credit : Not Always Your Fault (Part 1)

There are so many myths & misunderstandings surrounding business credit. And most are found on the internet. People "trust" websites they find on google entirely too much. In fact, much of the so called "information" you find on google concerning a number of subjects (especially business credit) is an assortment of blogs and sites stating opinions and outdated information. Some contain outright lies, untruths & thieves wanting to take your hard earned money. Truth IS any thief with a computer, website, access to the internet and google analytics can show up on the first page of any type of google search. And the business credit game is filled with such thieves. Google DOES NOT VERIFY the LEGITIMACY of ANYTHING appearing in its regular searches.

After years of research, analysis and owning a company that formerly operated in that space, I can tell you unequivocally 98% of the information and the people selling business credit services are out to take your hard earned money. Here's the truth. You may not like it, but it's the truth nonetheless. There is no short cut to building good, solid, strong, viable business credit. It's like a fine wine, it gets better with time.  There are important do(s) and don't(s) and I'm going to share them with you right here in this blog over the course of several blogs.  Please feel free to share this information and subscribe to the blog so that you won't miss anything important in this new weekly series.

My strongest advice is to save your money and do it yourself. I will give you tips and details on what to do over the coming weeks.  Might I remind you that some will charge you hundreds or even thousands for this same information. As a matter of service to the community and getting you to follow the excitement of this newly focused blog, I'm providing it to you for FREE.

First off, Business Credit is established in tiers. There are 4-5 tiers. If you have not established credit in the right tier in the proper order, your credit report at D&B will be flagged. D&B stands for Dunn & Bradstreet, the oldest business information sharing source in the world. D&B once decided who would and would not gain access to business credit. D&B became the world's largest Business Credit Bureau. Since business credit is not a consumer right, it has no regulation. The rules can be made up as you go. And changed by whomever is making said rules.

As absurd as it sounds, a D&B report does not even contain the names of any creditors. The report simply "describes" the type of creditor it may be. The report then lists the amount of credit "someone" claims you owe, terms and if you paid on time.  Since there are no names of creditors, you may not have a real idea of who claims you owe them money. With this in mind, a D&B report may be more inaccurate than your personal credit report. But because you have absolutely no legal rights as far as business credit goes, it is nothing more than a tool that can be used against you at the sole discretion of the credit grantor.


After years researching this system, we now understand why it is most difficult for Black American Businesses to properly build credit and grow good business credit than say non-black owned companies. A number of Black owned businesses fall prey to this legal scam operated by the largest business credit bureau in the world. Many have no idea that negative information even appears on their report until it's too late. Since there is so much confusion about the business credit process, many will make calls to D&B looking for help and resolution. What you will get is a team of highly trained Inside Sales people who will lie their way into your pocket. Selling you useless credit building packages that at one time cost nearly a $1000.We too were fooled by this D&B tactic.

These so called credit building packages allow you to provide D&B with the names & phone numbers of creditors that you have done business with that may not be reporting or showing on your D&B report. D&B promises to call and "verify" the credit you give them in exchange for you paying their fee. However, if  none of your creditors are officially registered with D&B (which involves your creditors paying fees to D&B so that they could report your credit) and many aren't, then none of  that credit will ever be added to your D&B report as promised and paid for. In other words, you have to pay AND your creditors have to pay! If those creditors decided not to pay D&B, then nothing you paid D&B for gets reported. And you will have wasted your money as it is totally nonrefundable.  D&B Sales people will not "voluntarily" tell you this information. They are not obligated to do so. D&B is planning to rapidly expand this service in order to "compete" with the thieves who show up high in google searches claiming to offer similar business credit services. D&B recently started a massive hiring of Inside Sales people to "target" those whom I suspect do not know any better.

If you think that information is alarming, then you will find the following to be even more so. Your D&B report contains a complete analysis of your type of business. This includes your location details (home-based, type of building or structure, general neighborhood). Your D&B report contains a complete analysis of your company's industry type which includes the rate of failure in your industry. Your report contains other "stressors" that even warns a potential credit about lending to your type of company which is based on "other people's failure" not how well your company is paying. D&B even makes specific recommendations as to whether you are credit worthy or not which have nothing to do with your overall credit score. Even with an excellent score, D&B can recommend that a credit grantor should not extend credit to you.

The promises of an 80 paydex score.  D&B works on a "scoring system" that ranges from 0-100. 80 is suppose to be the magic number that sends a message to creditors that you pay bills on time. Building up your paydex score (D&B's official name for your business credit score) is EASY using starter credit like small accounts at uline, quill etc. Just about anyone will trust you and open what is known as a "net 30 account" with a $150-$300 starting credit limit each. These small accounts will certainly build the 80 paydex score if paid on time. Here's the hidden problem.

In the case of many newly opened Black owned companies, your 80 paydex score can be rendered useless. If you own a certain type of business or in a certain neighborhood or in a certain industry......your score is NOT the only factor in making a credit decision. It's the REST of your report that's effecting your business credit. And the REST of your report is CONTROLLED and DETERMINED by staff at D&B. No amount of money nor credit building services will help you escape this fact! If you own or operate a business in what some consider the WRONG INDUSTRY or if D&B staffers believe your industry is one plagued by failure, then your D&B report in eternally doomed! Unfortunately for many Black owned companies, these reports are nothing more than tools of  legal discrimination. Real knowledge is real power!

In Part 2 we will discuss your best alternatives. Where there's a will there's a way. Save your money, do it yourself and follow this blog.

Swan Simpson @FilmworksCEO is an Opinionated, Politically Incorrect, Agent, Intelligent Brand Developer, Filmmaker, TV Producer, Writer, Blogger, Entrepreneur, Spiritual Thinker, Sports Fanatic. The views expressed in this blog are certainly my own and do not reflect the views or opinions of anyone other than me (friendly disclaimer). http://swandriasimpson.brand-yourself.com/

                                                     http://twitter.com/filmworksceo
             

Music Industry: Reaping What It Sowed

Swandria Simpson: Saving What's Left of the Music Industry

As a subscriber to the Music Industry Report, I get to read priceless insights about the crippled industry that may not be made so public. There is no question that the Music Industry has seen better days. Trillion Dollar earnings. Cornered Markets. Control of Talent. Control of Creativity. Control of the Airways and dictating what we will and will not be able to hear on the radio. It's an industry that has fallen under its own weight. I remember the days of organized criminals openly running labels, cheating Artist out of their hard earned money and holding consumers hostage.

In my never to be humbled opinion, the Music Industry has raped, robbed & pillaged enough and should be grateful that some fans are still hanging around after enduring decades of  the industry's blatant disrespect and bullshit. I absolutely love Radio One's Kathy Hughes' commentary about how the Music Industry owes Millions of Dollars to Artists, yet will not pay them. And how the industry wants her and other radio station owners to cover the slack. How arrogant is this. But I must hold the Artists accountable for allowing themselves to be nothing more than glorified human traffick. But I digress.

I think it's time for the Music Industry to give back and pay back in order to save itself. Music should be FREE. That's right, I said it. Give it all away. Free digital downloads of all Artists recordings on Major & Major Independent Labels. Use Videos to promote. Radio to promote. And make the bulk of your money from Concerts, Touring, Personal Appearances & Merchandising.


Building a global bridge to fans to save yourself is key. Restructuring deals with existing Artists so that you will be a Partner in their brand truly sharing the wealth with them. And using your resources to properly promote their brands instead of signing Artists just to shelve them. If you gave it all away, you would grow their fan base exponentially thus increasing the value of the brand. If you gave it all away you would sell more merchandise and increase revenues from concerts & touring. If you properly and fairly created a Partnership with Artists, you could share in their overall growth including revenues from Film, TV and other appearances (not this 360 degrees of bullshit you now have going on) BUT a new deal that competent (independent) Artist Management & Legal Teams can properly negotiate so that this new relationship isn't run with the type of  iron fist & dictatorship. The NEW Music Industry should then be thankful that the Artist wants to work with their label instead of things being the other way around.

Labels trying to remain a tyrant in a digital world will only lead to your complete demise.

If Beyonce walked away from her label (like Prince) and gave all of her music away as free digital downloads to  her fans and others (like I'm suggesting), her brand's worth would increase one hundred fold overnight. She wouldn't lose anything. She would become a fully self contained conglomerate who is NOW more available to her fans than ever before. The relationship would be more personal, more intimate thus more committed....and that translates into loyal buyers or mo' money honey!


If you need assistance developing a strategy to successfully "give it all away"...reach out to me.

Swan Simpson @FilmworksCEO is an Opinionated, Politically Incorrect, Agent, Intelligent Brand Developer, Filmmaker, TV Producer, Writer, Blogger, Entrepreneur, Spiritual Thinker, Sports Fanatic http://swandriasimpson.brand-yourself.com/