Q&A with Arlicia Robertson for Small Business Owners Looking to Achieve Long-Term Success

Q&A with Arlicia Robertson for Small Business Owners Looking to Achieve Long-Term Success

 

August 25, 2023

 

 Running a small business can be a rewarding endeavor, but it also comes with its challenges. Last month our own Regional Vice President, Community Lending Officer, Arlicia Robertson, participated in the Indiana Black Expo’s 2023 Business Conference and Lunch & Learn panel which focused on actionable strategies and best practices for small businesses to improve their chances of securing funding, growing their operations, and achieving long-term success. To achieve long-term success, small business owners need to adopt smart strategies and think outside the box when it comes to funding.

 

To recap what was shared during the Lunch & Learn, Arlicia provides some essential advice for small business success and dives into non-traditional ways to secure funding.

 

For people interested in launching their small business, what should small business owners consider when establishing business credit?

 As I work with many aspiring business owners looking to launch their businesses, some are confused about how to build business credit. Many business owners and entrepreneurs don’t realize the key differences between business credit and personal credit, so let’s start there. Your business credit and personal credit aren’t linked – but they may be related as lenders may review your personal credit before extending business credit to see how well you manage debt, especially if you are a sole proprietor or just starting out. This is also more likely if you sign a personal guarantee when taking out a small business loan or opening a business credit card.

 While your business credit and personal credit may be related in certain cases, you can take steps to separate them as your business grows.

 Even if you never plan on taking out a loan or tapping a line of credit, it can’t hurt to build your business credit. In fact, your business insurance premiums, equipment or office lease agreements, vendors’ terms, and ability to work with other companies could be influenced by it.

 

How can business owners start to build their business credit?

 The first step is to incorporate and establish your business. By incorporating your business or forming an LLC (limited liability company), this ensures your business entity will be separated from your personal identity.

Get a federal employer identification number (EIN). This is a free service offered by the IRS, and it also serves to identify you as a business entity.

 Lastly, be sure to open a business checking and/or savings account. At Northwest Bank, we offer a variety of checking accounts to address your specific needs. Our accounts feature competitive minimum balance requirements and interest rates, along with a range of account activity levels.

 

As we’re aware of the various small business loan options that are available, what are other non-traditional funding solutions for business owners?

 Achieving long-term success as a small business owner requires a combination of strategic thinking, adaptability, and creative funding solutions. For business owners looking to benefit from some of the non-traditional funding options out there, I’d recommend the following:

1. Cultivate Investors – This individual believes in your vision and is willing and able to invest in a startup or early-stage business in exchange for equity or convertible debt. Their expertise can also provide valuable insights and guidance.
2. Utilize Your Home’s Equity – If you own a substantial amount of your home, there are a variety of ways to get funds to kickstart your business. Cash-out refinances, home equity loans, lines of credit and equity sharing agreements are all ways to access cash from your home. An important note that approaching the application with a strategy and an idea of what to expect will better set you up for success.
3. Crowdfunding Solutions – Online crowdfunding involves raising smaller amounts of money from multiple backers and has become an increasingly common solution for business owners that may lack connections to investors as it allows startups to reach out to many potential investors at once.

Market Your Business – Be a walking billboard for yourself and your business. Everywhere you go there’s an opportunity to promote your business, so be prepared. Carry business cards, network and make sure you’re active on social media.