Credit Card Tips for the Young Entrepreneur

Gone are the days where you worked a 9-5 job and stayed with a great company for 40 years before you retired. These days, it’s all about creating your own dream career, and building start-ups has been on a rise. Even little Susie from the Verizon commercials has gone from running a little lemonade stand to national distributor of ‘Susie’s Lemonade’.

The common question is, how should we be approaching this? Selecting the right credit card and financial products is just the beginning but will do great favors for the young entrepreneur in the long run. Here are some tips to starting off your business with good credit:

Invest Wisely

One of the greatest challenges for your entrepreneurs is getting the right investments in order to fund their start-up businesses. As a young entrepreneur, you are not only worried about if you can attain this funding but also where you can get yourself a relatively rewarding credit card deal and how your credit scores will reflect upon your future borrowing power to further invest in your company. As with all things, making your credit card’s minimum payments consistently may not be demonstrating a sufficient enough of income to supplement the amount you are looking to spend on credit.

Another challenge is the fact that young people tend to have little to no creditability when it comes to obtaining loans. Whether you’re just looking to apply for a personal credit card or looking to use it for business purposes, you’ll likely have to deal with the fact that your credit card will have a much lower limit than you had hoped. A lot of the time you’ll hear people suggest that you should actually lower your credit limit to prevent overspending. While this may be true, as a young entrepreneur it does you no favors to have limited credit when you potentially need more financial support.

Build Credit to Gain Credit

Building credit is essentially one of the first things young entrepreneurs should have at the back of their minds. If you’re even remotely interested in pursuing this field in the future, highly consider the steps you can take to improve your credit score. Some simple actions to be taken are starting off with a low credit card limit as a student and making the appropriate payments every month. Having a credit card is one of the most efficient ways you can start building credit right away—even your crippling student loans aren’t as efficient.

As soon as you’ve built an appropriate credit limit for yourself, make sure to keep below that boundary and continue to make your payments on time. The worst thing you can do to hurt yourself is probably build all this great credit and then burn everything you’ve ever worked for by not making payments on time. The information held by financial institutions about your credit history never truly goes away. In some sense, this makes your credit history somewhat like all the embarrassing photos you posted on Facebook the other night.

How do you know you’ve made it?

You may recall the snail mail your parents found incredibly annoying that congratulated them on their credit history and suggested them to add to their credit card limits. As a young entrepreneur you should take those as good indicators of your credit building success. Financial institutions will only invite those they believe can pay off their loans consistently to increase their limit, and as a young business owner that’s precisely what you need to reach the appropriate levels of funding.

One more important thing to be aware of when it comes to having a business credit card is the idea of  not having any personal liability for the debt that you incur for your business. This major myth has people wishing they never overspent left, right, and center. There is no such thing as running away from debt unless you decide to go bankrupt—in which case there isn’t much of a chance you’ll build good credit history ever again. So before you dive into anything for your business, know that while some risks are important to take, you’re going to be held liable for them all.

A cautionary note: Unless you can obtain loans for little to no interest, it probably isn’t worth your while to use such measures to increase your credit score. Consistent building of credit score by paying your bills on time will better serve your cash flow and have a greater impact over time. Don’t forget you can also window shop for the loans with the best terms! Bottom line is, even if you’re in a hurry to build credit, avoid incurring the unnecessary costs of a loan.

5 Ways to Validate Your Business Idea

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The concept of starting a small business has been gaining traction within British Columbia. An analysis conducted by BC Statistics shows in the 2014 Analytical Report that small businesses actually make up 98 percent of all businesses in British Columbia. Furthermore, 81 percent of these small businesses employ five people or less. This goes to show that British Columbia holds an abundance of small business opportunities for you to pursue.

But how can your business idea be validated in a relatively short time span? According to Gregg Brockway, co-founder of Hotwire and Triplt, “There are ways of looking at a business and seeing it’s working.” As smart business people, you understand the need to leap at any opportunity that can potentially provide profitable customer interaction.

Here are 5 ways to validate your business idea that can drive results for Cyber Monday:

Does It Ease A Pain Point?

Truly valuable business ideas help ease pain points for customers. These ideas solve problems and adds value to the lives of customers by bringing them more simplicity, efficiency or affordability. One of the most challenging aspects of validating your business idea is the fact that you’re the only initial user of this product or service. It’s difficult not to not be biased when you’re so in love with this business idea. Make sure your business idea is solving a common problem amongst your customer target audience and not just a problem you experience as an individual. Smashingmagazine.com suggests looking at the problem from alternative angles if you can’t come up with a traditional solution.

Don’t Commit To It

You shouldn’t be committing all your time, energy and life savings to one particular business idea. Sometimes you’ll realize that the business idea is just not worth pursuing partway through trying to get customer validation. It’s also easy for customer demands to change, in that case, you always have the option of pivoting your business and pursue another business idea.

One clear caution sign to be aware of is if you’ve lost sight of your initial vision. If you’ve forgotten why you’re pursuing this business idea and how it brings value then it’s time to take a pause. Don’t be afraid to put a halt on your project and take a step back to look at the bigger picture.

Actions Speak Louder Than Words

As much as your potential customers appear to take interest in your business idea–are they really willing to give your product or service a shot? The biggest mistake you can make is take the customers’ word for it when it comes to stating whether they’d use something that has yet to exist. When it comes to actually using a physical project or service, customers take other things into consideration like ease of use, convenience, lifestyle compatibility and more.

A great way to validate your business idea is by creating a prototype and showing it off to the world. Let your target audience touch it, feel it, use it. You might discover that your target audience refuses to use it because it doesn’t make their lives more efficient and that’s perfectly fine. The essence of validating your business idea is to capture whether it is something your customers will actually want, without investing a fortune on developing something no one will use.

The Customer Is Always Right

Indeed, the customer tends to be right most of the time in this case. When you’re out and about validating a business idea, you’re in it to hear what your customers have to say, so never forget that. Listen to why your potential customers wouldn’t want to pursue this product or service and take it to heart. Is there a similar product they’re already using? Is your product or service simply too expensive? Too time consuming?

If the responses are positive then consider which aspects of your business idea your customers really appreciate. Sometimes it’s easier to criticize the faults and more difficult to figure out why something is working. Here is where you need to figure out what it is that made your business idea a success among your target audience and scrap the rest.

Is It Time Yet?

When its all said and done, ask yourself, is the present time the most appropriate timing for you to launch your business idea? In the context of our discussion, it is the right timing. Cyber Monday is coming up and you can certainly consider holding a soft launch for your business idea to better test the waters.

Now It’s Your Turn

Are you planning on using any of the above tactics to validate your business idea? If so, which of the tactics will you be using to best tailor to your customer needs and values?

“Those who lead inspire us.”

I’m not usually one to reference specific books directly but Start With Why by Sinek spoke to me. It speaks of leaders with power and those who lead by inspiring. It speaks to those that desire to inspire and those seeking inspiration from others. Perhaps the most fantastic part of it all is realizing how the most influential people leading communities and organizations all share the talent that tells us the “why” of their presence in our lives.

If we take a moment to consider inspiring leaders, not once do we envision a 30-minute powerpoint presentation packed with specific information nailed down to the nitty gritty details of their ideas. Instead, we recall the board–inspirational statements–they make that celebrate the very driving ideals that give us the reason to believe and recall it when we wake up the next morning.

Not once did you favourite author have to tell you “I write great books”. They let you know that their written work is valuable by challenging the norms of a supposedly saturated industry. No one will ever be motivated, nor care enough, to be part of a community that only preaches on how well you do one thing.

There is a reason people thrive on inspiration. Because it can model both our personal lives and organizations we run.

Sinek developed the Golden Circle as pictured above. Just as I spoke of inspiration, the Golden Circle encompasses both people and their business interactions.

In short: It doesn’t matter how good you are at what you do–people won’t care unless they know “why”.

Is this really applicable to our lives you might ask?

Fair question. I thought the same.

Last week someone asked me to map out the “why” of my life for my own personal clarification. After what felt like hours of talk, I realized I still had no understanding of what “why” really meant.

So, here’s what I’ve come up with: Your WHY can be broad. Vague. With lack of details in fact. All it has to be is something that drives you to continue moving forward every morning.

My why in this case is to inspire through written communication. To enable people to find their own place in the world–whether this be a mental state of well-being or a physical home.

We are people of change and growth. Our actions will shift its course as we move forward but our “why” is what will remain consistent.

— itsfruitcakeweather.