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Starting a Small Business after College Graduation

Starting a Small Business after College Graduation

Imagine this scenario: You’ve just graduated from college. You are given two options: (a) work at a well-known company, or (b) start your own business. Which would you choose?

Many new college graduates would most probably play it safe and choose option (a). Increasing numbers, though, would rather take the risk and go the entrepreneurial route to start up their own businesses.

Donna Fenn, author of Upstarts, a book about the Generation Y start-up phenomenon, says graduates are “starting businesses in droves.” This is due to a number of reasons, among which are the inspiring success stories of Internet entrepreneurs like Steve Jobs and Bill Gates; the founders of Facebook Inc.; and the founders of the photo-sharing app Instagram.

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Aside from these, graduates are also aware of regular downsizing and layoffs, meaning lack of job security at large companies.

Starting your small business

Nowadays, with advancements in technology, especially the Internet, it really doesn’t take much to start your own company. Most entrepreneur-wannabes just need a few laptop computers, a reliable Internet connection, and start-up capital.

Speaking of start-up capital, it is getting relatively easier for aspiring small business owners to get investors. CB Insights, a New York firm that monitors start-up funding, reports that investors made 1,749 seed investments, generally worth no more than $1.5 million each, in early-stage companies in 2012.

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Aside from investors, graduates can also get the capital they need by applying for a business loan. However, this may prove to be challenging if one has a poor credit score.

Fortunately, there are some things you can do to manage a bad credit rating.

First, determine the “damage” that needs to be “repaired” – check your credit score and think about what you can do to turn it around, if indeed it is in the bad credit range.

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More often than not, a person obtains a poor credit score when he or she does not manage his or her credit properly. Sometimes, though, this may not be the only reason. If you are a victim of credit scams, this can lead to bad credit as well. This is why it is important to perform regular credit checks, and to protect one’s identity as much as possible.

Managing your business credit

Once you have your small business set up, make sure that you manage your business credit as you would your personal credit. Here are a few tips:

  • Find out if you already have a business credit file.
    If you are a small business owner, determine whether or not you have a business credit file with D&B, which is the world’s leading source of commercial information and insight on businesses. If you discover that you already have a business credit file, go over it thoroughly so that you know what information it contains. If needed, make changes so that people looking at your business credit (e.g. financial institutions and suppliers) have the correct information.
  • Establish your business credit history.
    Small business owners usually use their personal credit and financial resources when they’re just starting out. However, they must establish a separate credit history for their business. This can be done by placing expenses, like a business phone line, under their business name, or opening a commercial bank account and using it to pay business-related bills.
  • Always pay your bills on time, and in the full amount as much as possible.
    One of the easiest ways to manage business credit scores well and build a good payment history is to pay your bills on time. As much as possible, pay every bill in the exact amount on or before its due date. Also, be sure to use your lines of credit carefully.
  • Keep your business credit file updated through regular monitoring.
    Monitor your business credit so that you may know if there are any changes in your credit ratings, as these may affect your relationships with customers, financial institutions and suppliers. Always make sure that your credit file is updated and accurate, and shows any changes like location, number of employees and revenue. These all have an effect on your credit rating.
  • Monitor your customers’ and merchants’ credit.
    Performing credit checks will give you an idea of the credit standing of your customers. This will in turn help you decide how much credit, and on what terms, you should extend to them.

Advantages of business credit management

Small business owners will find that managing their business credit proactively can help guarantee positive cash flow, which is, of course, something every business owner desires.

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This is because they can:

  • Obtain more financing at better terms.
    Small businesses that have good credit will be able to get financing when they need it. Conversely, businesses with poor credit ratings may be charged higher credit card and loan interest rates.
  • Get the supplies they need at the best possible terms.
    Suppliers usually evaluate the credit of small businesses before deciding on how much credit to extend to them. Having good business credit means you can get the supplies you need at the terms you can afford, which means you free up more money for other business needs.
  • Make wiser credit decisions on their customers.
    If business owners know the credit of customers, they can give better terms to credit-worthy customers. They can also avoid dealing with customers who don’t pay on time. Both of these can help improve cash flow.
  • Protect themselves against business identity theft.
    Business owners who actively manage their business credit file help ensure that false or fraudulent information is not in the file. They will always be aware of any inaccuracies and missing data so that they can address these immediately.

Starting a small business, especially if one is still a fresh graduate, may seem challenging. But once you are armed with all the knowledge, tools and resources you need, the journey will not seem so tough anymore. So go ahead and launch that business, and reach for your dreams.

Do you have any useful tips to share with new graduates on how to set up a business? Please feel free to share them in the comments section below. If you find this post useful or know others that could use some tips, go ahead and share it with your friends.

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Published on July 4, 2018

Top 10 Recommendations on Money Management Apps

Top 10 Recommendations on Money Management Apps

Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

The solution is simple, save more and spend less. But, we all know it’s easier said than done.

One problem is finding quality apps that save you time and money, and aren’t just hype.

Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

1. Personal Capital

    When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

    Here are some of its main features:

    • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
    • Discover hidden fees and how much they’re affecting your retirement plan
    • Wealth management for investors requiring a long-term strategy

    With Personal you’re free to track your expenses and net worth.

    Available for: iOS and Android

    2. Mint

      If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

      Here are some of its main features:

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      • Effortlessly track all your bills and balances in one dashboard
      • Categorized expenses to understand where you spend your money
      • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

      Feel at ease with managing your money by a reputable company that isn’t going anywhere.

      Available for: iOS and Android

      3. YNAB

        Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

        Here are some of its main features:

        • Easily sync all bank accounts in one place
        • Visually see your debt paying progress with eye-catching charts and notifications
        • Customized categories setting saving goals

        The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

        Available for: iOS and Android

        4. Wealthfront

          Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

          Here are some of its main features:

          • Variety of investment account options including IRA, Roth IRA, and more
          • Your portfolio composed of 7 different asset classes
          • Automatically rebalanced portfolio
          • Daily tax loss harvesting

          Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

          Available for: iOS and Android

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          5. Clarity Money

            If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

            Here are some of its main features:

            • Easily cancel subscriptions with one click
            • Synchronize bank accounts fast
            • Transfer money effortlessly between different accounts

            Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

            Available for: iOS and Android

            6. Acorns

              What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

              Here are some of its main features:

              • Automatic contribution option
              • Customized portfolio tailored to your needs
              • Low management fees ranging from $1-$2 per month

              Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

              Available for: iOS and Android

              7. Albert

                Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                Here are some of its main features:

                • Receive notifications for overpayments, hidden fees, and low balances
                • An Automatic budget that’s built around your spending and income
                • Easily track debt and set new financial goals

                While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                Available for: iOS

                8. Prism

                  Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                  Here are some of its main features:

                  • View all your account balances in one glance
                  • Bill due dates are automatically pulled and tracked
                  • Receive early reminders for upcoming bills

                  If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                  Available for: iOS, Android, Windows, Amazon

                  9. Mvelopes

                    Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                    Here are some of its main features:

                    • Connect unlimited bank accounts
                    • Real-time budgeting with auto transaction syncing
                    • Low monthly $4 fee or $40 annual

                    Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                    Available for: iOS and Android

                    10. Wallaby

                      Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                      Here are some of its main features:

                      • Automatic recommendations for the best credit card to use for each transaction
                      • A friendly user interface, displaying credit cards with their corresponding images
                      • Free to use

                      If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                      Available for: iOS and Android

                      Take control of your finances and experience financial freedom

                      Picture yourself staying on budget and saving more money than you’d ever imagined.

                      It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                      You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                      Featured photo credit: Pexels via pexels.com

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