When starting a business, we are excited. However, there are many uncertainties. Unaware of methods and little to no directions, small business burnout may be at the forefront for many before long. While developing the business structure and help avoid burnout and frustration, one must first analyze the competition and locate visible business and financial funding opportunities.
Do small businesses continue to be a credit risk due to lack of awareness?
For many entrepreneurs, when developing their brand, it’s more about making money to be able to continue operations. Many credit and tax risks can become an issue when a business owner is financially unaware and has little to no resources. How can we bring awareness to aid the new business owner?
Credit Risk is a series of events much many businesses owners encounter. Here are some questions to pose yourself regarding self and entrepreneurship behaviors:
- How is your behavior spending?
- What is your credit score?
- What is your Paydex Score?
- Is your business a credit risk?
- Are you familiar with financial strategies to increase revenue, or are you in business to make money quickly?
When it comes to “Credit Risk,” the decisions of many financial institutions have protocols based on Customer Segmentation. Below we share some of the considerations and also pose some questions.
- Geographic Segmentation: People living in the same environment have similar wants and needs. But is that necessarily true?
- Community Development: One of the most sustainable growth areas within the business. At the same time, Business owners create products or services to improve areas of uncertainty.
- Business and Personal Finances: Understanding these helps ensure you can withstand downturns. It will allow one to take advantage of opportunities and increase the business’s chances of succeeding.
Being unaware of credit risk will increase business expenses and eventually decrease profits. On the other hand, if you are financially clueless, your business will eventually run into problems, such as increased expenses to a point where gains are minimal.
WBENC has incorporated new programs to improve awareness of when and where to seek assistance, including through their WeTHRIVE and WBENC Lift Financial Center of Excellence Programs. While building your financial portfolio, make sure to review possible free in-person/online workshops to improve financial literacy. Becoming a Small Business owner with a series of credit risks will develop uncertainties. Community Development Financial Institutions (CDFI) can be a source of funding, among other avenues.
Also learn the process of certifications. Some recommendations below on steps to take to get started.
- To begin, ensure your business is aligned correctly.
- If possible, register your business name with the USPTO
- Register your business through the Secretary of State to transact business. For assistance, you can visit https://geauxbiz.sos.la.gov/
- Obtain your EIN: https://sa.www4.irs.gov/modiein
- Obtain your DUNS: SAM Webform: Search (dnb.com)
- Once receive your DUNS number, the company will comply with compliance to complete
- If you need assistance on how/where to begin, please utilize the agencies you are applying.
Businesses that become certified have more opportunities with more large corporations and peer WBE businesses, increase revenue, and have less competition. Remember, small business owners should understand essential finances and credit. Building a business is the goal for many; however, small businesses can become overlooked due to unawareness of financial literacy.