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Ten Mistakes All Business Owners Should Avoid

T. Randolph Catanese, Esq. © 1998  

Mistake No. 6 - The Business Owner Does Not Protect The Business' Credit. In our experience with business processes, with high quality Los Angeles business lawyer, the priority for any business owner is protecting their personal credit. But the second priority when it comes to credit is protecting the business' credit as well. Why is this important? There are credit agencies which monitor new businesses and how they pay their bills. One such agency is Dun & Bradstreet. When they begin tracking you they normally monitor your payments to vendors and will actually contact your vendors to determine the frequency and timeliness of payment. Once they begin tracking you it is very important that you pay your vendors as agreed. Because if you do not, later when you go to another vendor or that same vendor and you want additional credit, they either will not give it to you (requiring cash payments up front) or will give you very marginal credit terms (half on order and half on delivery of product). Most importantly, if a business creditor contacts you, do not avoid them. Most vendors are willing to work with you and your business if you explain to them your situation and you ask for their assistance. Avoiding them and not honoring your payment agreement is the worst thing you can do. Good creditor relations are the same as obtaining a bank loan so do not misuse the relationship.

 

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