So you've shattered the 9-5 chain and claimed your own slice of the business world. Excellent! But beware: The road to success is often marred with the potholes of poor money management.
As the owner of a small business, your company credit card can be great asset -- if employed judiciously. Here are four tips that can go a long way to aiding that goal.
Maximize your money with cash back
As a new small business owner, you're going to be making many, many purchases. Instead of ransacking the petty cash, consider buying your supplies with a credit card that offers ample cash back.
The amount you save by doing this can add up nicely over time. Just be aware of carrying a large balance with equally large interest rates and finance charges. This leads us to our next tip...
Make your payments on time
Nothing can destroy your credit faster than skipped or missed payments. If your cash flow dips, this can snowball into disaster as charges mount and your credit score potentially drops.
Instead, budget how much you need monthly and stick to it. Be realistic, leaving room for the occasional technological revolt or Friday the 13th run of luck. Unexpected things happen. Hard drives can cough up their last binary code without warning. A roof can spring leaks overnight.
Planning ahead for these occurrences by making all of your payments on time can leave room (and a healthy credit line) for the cloudy days when they come.
Choose your employee cards wisely
This can often be a double-edged sword. Some employers trust no one, managing the one and only card. And if your business simply doesn't require it, why indeed pass out credit cards like party invitations?
But consider this scenario: You're away from the office. You'll be out for a week, at minimum, when the laser printer runs dry and that large C.O.D. shipment arrives way ahead of schedule. What happens next? (And expecting your employees to cover you is the wrong answer.)
If extra cards are available, you're covered. Again, just choose wisely and set limits. Only you can fully assess your own situation, but consider all the angles before making your final decision.
Find the right card for you and stick with it
Many credit cards can tempt you with offers of fantastic rates, only to raise them six months later. And constantly applying for and switching cards while chasing these deals can wreak havoc on your credit score.
Find the company with which you're comfortable -- a place that's willing to listen to you. Treat this relationship as if you were approaching a potential silent partner. If the credit card company isn't willing to discuss your business needs attentively, you might want to take your business elsewhere.
A small business credit card can be a powerful ally when you need it. Just make sure you've done your due diligence before signing the back of your chosen card, and keep on top of your payments when possible. Remember that each business owner's personal situation is going to be different, so while a cashback card might be the only card you need, a business traveler might choose an airline rewards card as well. No matter where you are in your business, the road to success always starts with one foot forward.
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