Small Business Guide for Success - Page 2 of 4

Small Business Guide for Success

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Money Matters

Using sound resources, savvy entrepreneurs find capital for their business

By Carolyn M. Brown

Credit Cards: Break or Burden?
Credit cards provide a simple means to gain access to capital. Among the findings of the Washington, D.C.-based National Small Business Association’s survey of 500 small to midsize companies, credit cards top the list of options small-business owners rely on for capital, with 44% saying that their company has used them within the last 12 months. However, financial experts caution that credit cards are not a long-term financing solution. Instead, credit cards should be used temporarily to fill the gap between raising startup capital and running the company until it produces positive cash flow–that is, until income covers expenses.

Using a credit card in the name of one’s business is a good way to build up the company’s credit history, says Tarik Smith, CEO of California Credit Solutions (, which helps clients repair their credit. But Smith notes that interest rates typically run 1% to 3% over prime, with some business credit cards ranging from 14% to as high as 28%. And with 71% of survey respondents revealing that they carry over substantial balances on their cards month-to-month, the interest rates only contribute to the financial strain.

Understanding that determined business owners want to pursue their entrepreneurial endeavors at all costs, Smith stresses that the key is to use credit wisely so that you don’t overextend yourself.

“Ideally you want to keep your balances low, which means below 30% of your total credit limit,” advises Smith. “If you are close to or over the limit, your debt could hamper you and your business.”

Every Little Bit Helps

Effective marketing and advertising strategies can gain clients and ultimately revenue

By Tennille M. Robinson

Do…Know your business. Have a clear understanding of what your business is in an individual sense. Knowing will impact who you align with, how you are portrayed, and whether or not to participate in certain initiatives, says Jennifer Stokes, a program manager for the Myrtle Avenue Brooklyn Partnership, a local nonprofit in Brooklyn, New York.

“You have to be hands on and you have to be present,” says Steffon Isaac, creative director for the Polish Bar of Brooklyn. Here, he recommends a three-component concept, which the Polish Bar consistently keeps in place when implementing marketing initiatives. Each, he says, ensures they are not digressing from the campaign’s original purpose.
1. Map it out. Thoroughly develop the strategy intended for use.
2. Put it to work. Embark on a process that will allow things to say on track
3. Measure the impact. Have technology that will enable a measurement of success.

Do…Develop strategic partnerships. According to Stokes, “Cooperative advertising brings your advertising up a notch, because now you’re working with increased dollars and increased voices