Are you seeking funding for your business? A bank or lending institution looks at certain conditions when you apply for a business loan. Your credit analysis is determined by five factors, also known as the 5 C’s. Here is what you need to know about the 5 C’s when you are preparing for funding.
The 5 C’s of business funding
When you apply for a business loan, your credit analysis is determined by the five C’s. The five C’s are:
- Character
- Capacity
- Condition
- Capital, and
- Collateral
Briefly, these can be described as:
1. Character
Lenders need to know that you are honest. They will look at your background to determine your integrity. The factors that lenders and banks will look at include:
- Your education
- Experience
- Knowledge in your business or field
- Your licensing
- Criminal record
- Your credit report
2.Capacity
Your capacity is your cash flow and whether you can pay back the loan. The factors affecting this include:
- Your payment history of current loans
- Your previous business expenses
- The business’s cash flow and your ability to make loan payments
3. Condition
The condition of the business refers to the likelihood the business has to fail or succeed. Will it be a business that is set to grow or deteriorate? Here, the bank or lender will look at factors specifically related to your business, such as your target market, working capital, and expenses.
4. Capital
The lender or bank will look at your capital. If you are putting your assets into a business, you have a greater chance of a loan as it shows that you are committed to the success of your business. Your lender will ask what personal investment you plan to make in the business.
5. Collateral
You need to have collateral as a form of secondary loan payment. The factors looked at will be the value of your business and personal assets.
Now that you know the 5 C’s, you are better prepared to apply for a loan. If you need help with growing your creditworthiness through educational programs, workshops, or funding programs, the Women’s Business Center of Northern Virginia can help. CBP recently developed Fairfax County’s microloan program that has provided over $1.6MM to businesses affected by the COVID-19 downturn. Let us help you to prepare for a business loan – check out CBP’s Business Finance Center’s classes in June at https://cbponline.org/classes-counseling/class/all-classes/ !
You can become a successful entrepreneur with the right franchise. Here’s how to choose a franchise that’s right for you and how the Women’s Business Center can help.
Look for a good sales record
You don’t necessarily have to find a popular franchise, but rather one with a proven sales record. If the franchisees have a history of good sales, it is likely to be a good investment.
Choose a franchise that is willing to grow
Don’t make the mistake of investing in a franchise that refuses to grow or expand in an ever-changing market. If you are interested in technology, make sure you invest in a franchise that is future-ready and researching everything from the Metaverse to AI and NFTs.
Healthy living or eco-friendly franchises
Due to the pandemic, more people are choosing to improve their health and well-being. They also want to take care of the environment. Choose a franchise that promotes good health and the use of eco-friendly products.
Find a good business model
Where will the business be in 5 years? A franchise should have a good business model that focuses on how it will increase sales, expand its client base and drive profits.
Find something that excites you
There is no point in investing your time and energy in something you are not passionate about. Choose a franchise that personally appeals to you. You’ll be continuously driven toward success if you choose a product or service that interests you.
Women’s Business Center franchise workshop
The Women’s Business Center creates workshops and education programs to help blossoming entrepreneurs reach their full success. If you are interested in franchising and want to learn more, be sure to join our virtual franchise workshop “Franchises: What’s New and What’s Next?”
Contact us today for more info on how to choose a franchise that’s right for you!
Are you struggling to stand out from the crowd as a government contractor?
Thanks to digital marketing, your company has the power to reach audiences they would never reach with traditional marketing channels. Here are some tips to help you reach high visibility.
5 keys for effective digital marketing visibility
Reaching your target audiences will help you to increase your visibility with individuals who are likely to be your customers or clients. To do this, you need to do your research on these individuals and follow their journey. You can use digital marketing tools to help you to research and reach your target audience.
A good website is a key to maintaining visibility. Your website will improve your credibility and accessibility. The website needs to highlight relevant content that your business deals with regularly, your services, and contain clear contact details. Using analytics tools, such as SEO content and a Google Business page can help your website to rank higher and help more people find you.
Social media marketing is essential in the digital age where more users are turning to their phones to engage with government contractors. Creating a LinkedIn or Facebook Business page for your business will help you to become visible in the marketplace or government and increase your engagement with clients.
Content and email marketing help you show viewers and clients that you’re an expert in a subject matter or your field. Creating emails and content across all of your online platforms will make your business stand out and differentiate you from your competitors.
- Digital marketing strategy
Every business needs a digital marketing strategy to successfully target its audience and maintain online visibility. Your business needs to create a strategy and marketing plan that is constantly updated with your business activities and objectives. Help to educate your team by attending workshops and taking online courses. Hiring an agency can help you out as digital marketing teams are constantly looking for new ways to help businesses reach their target audience and boost their visibility.
Consider checking out your local Procurement Technical Assistance Center (PTAC) Contact the Women’s Business Center today for more info on the keys to maintaining high visibility and growing your business!
Happy Financial Literacy Month! For this powerful month, the Women’s Business Center of Northern Virginia at Community Business Partnership focuses on financial empowerment, financial wellness, and achieving your financial goals. We have virtual and online classes dedicated to helping you to reach your financial goals. Here are some of the key steps to take towards financial empowerment.
How To Create Financial Goals
- Evaluate your previous goals. Look at your financial goals from your previous year. Do you achieve your goals? If you did, what process did you use, and if you didn’t reach your goals, what held you back? Evaluating your goals can help you to determine if you are on the right path to hitting your financial goals and help you to tweak your goals so that you can reach them this year.
- Outline your goals. Have a general outline of your goals. Create a plan to reach each goal and be specific about the number you want to reach or target. Be realistic when creating your goals and factor in your income and expenses. You need to prioritize your expenses to ensure that you are not spending more than you can afford or spending too much on non-essential items.
- Match actions with your desired outcomes. You need to break down your goals to ensure that you are taking the action needed to match your desired outcome. For example, if you have a financial goal for the end of the year to buy a new premise, you need to ensure that you are receiving a particular income each month to help you to match your desired income goal.
- Create a deadline. Creating a deadline will help you to hit your goals faster. For example, creating monthly financial goals for yourself or quarterly financial goals will help you to hit yearly goals. Don’t forget to make each goal attainable so that you can set yourself up for success.
To set yourself up for more financial success and make good impactful decisions, check out our free class on Financial Wellness of Female Entrepreneurs on April 20th at 11am. Register at: https://cbponline.org/class/financial-wellness-for-female-entrepreneurs-2022/ . Or see our other training topics this month.
Contact The Women’s Business Center of Northern Virginia at Community Business Partnership to help you to achieve financial empowerment!
Good bookkeeping is critical for every small business owner. Here are 7 bookkeeping tips you can use to ensure that your records are accurate and up-to-date.
Tips For Good Bookkeeping
There are 7 steps you can follow for good bookkeeping to ensure that your accounts are up-to-date and that your business continues to grow.
- Separate business and personal finances. Your business expenses and personal expenses should be kept separate at all times to make your bookkeeping easier. A corporation and LLC usually need a separate business account by law so opening a separate business account will also help you to avoid legal issues. Open a bank account for your business to help you to stick to your budget for your business, and to keep your personal and business finances in order.
- Organization is the key. Keep your records organized to ensure that you won’t waste time looking for important information. Business invoices and receipts are the most important documents when it comes to tax season. Place these in a secure and safe cabinet. Organize your cupboards and files and label everything you need so you can find them easily and quickly. This is true for electronic copies as well.
- Try automation. Automation can help you to save money and time. It is also more secure than traditional filing methods. Accounting software eliminates the need for spreadsheets and time-consuming calculations. Look for software that is secure and affordable for your business.
- Set reminders. It is easy to lose track of time and deadlines. Setting reminders will help you to remember what you need to remember, what needs to be filed around tax season. You can use apps for reminders or a digital calendar.
- Leave an audit trail. An audit trace can help you to recover important documents. Back up your records and keep all documents to verify purchases and ensure invoices were paid.
- Keep a record of expenses. Keep a record of your expenses such as your utilities or supplies so that you can easily track your budget and take unexpected expenses into account.
- Make bookkeeping your priority. A small business owner has a lot to do but bookkeeping should come first. Prioritize bookkeeping to track your finances and hire people for help if needed. If you don’t prioritize bookkeeping, you’ll find yourself with a lot of work down the line.
The Women’s Business Center of Northern Virginia at Community Business Partnership can help you to gain the skills needed for bookkeeping. For bookkeeping tips and other financial advice, contact us today!
We invite you to attend our free class on Financial Wellness of Female Entrepreneurs on April 20th at 11am. Register at: https://cbponline.org/class/financial-wellness-for-female-entrepreneurs-2022/
As we begin Women’s History Month, we reflect on women-owned businesses around the world. Join us as we commemorate and highlight some of the top women-owned businesses in the United States. Here are 5 women-owned businesses that have earned notable success.
Black Entertainment Television (BET) was the first African American-controlled cable network. The popular network was started up in 1979 when a remarkable woman named Sheila Johnson helped to fund the cable network. Sheila used the money which she earned herself through teaching music lessons during her lifetime. She later became the VP of Corporate Affairs and serves as a board member of the company.
The Body Shop is known for its eco-friendly and animal-friendly body care products. It was created in 1976 by Anita Roddick in England. Anita had the vision to create body care that doesn’t harm the environment, animals and is gentle enough for our skin too. She turned her vision into a success and promoted ethical consumer purchases globally. Today there are more than 45 Body Shop stores around the world with millions of products being sold on online stores annually.
Maxine Clark had an idea to allow children to create unique stuffed animals in 1997.
Today there are over 400 Build-A-Bear stores around the world. The workshop is one-of-a-kind and inspires kids to use their imagination and creativity in everyday life.
Sara Blakely was one of the youngest self-made billionaires after creating the brand known as SPANX – a bodywear shapewear for women. Sara created the brand following an idea after snipping a pair of pantyhose to use under her pants. Her idea created a chain of stores that today have over 200 products and are used by celebrities such as Michelle Obama. Apart from creating the successful clothing range, Sara donates half her profits to charitable causes.
Cisco, the networking product company responsible for a multi-network exchange, was founded by Sandy Lerner. Sandy alongside her then-husband Len Bosack developed the router that earned more than $1.5 million in sales in the first years of development. Today Cisco is valued at more than $220 billion.
There are so many notable women-owned businesses and you could be the entrepreneur that starts the next one. The Women’s Business Center helps to serve potential and existing small business owners including women, veterans, and minorities to earn success.
Contact us today for more info on starting up your own business or to assist women-owned businesses!
- Become a researcher. This is critical as you are working on your business plan, but it will come in handy for the duration of your business life. For example, always talk to more than one vendor. Whether you are hiring a lawyer, changing suppliers, or investing in software – for any purchase or decision large or small – do your research! Never rely solely on the advice of a friend or family member, or the writer of the latest Inc. article. Gather your options, review them against each other, then make your choice. Of course, don’t spend so much time on this step or you will end up in decision paralysis. Generally, the middle option will be your best bet, so go for the one that gives you most of what you want at a reasonable price.
- Learn basic accounting and develop an understanding of financial reports and how to use them. Financials are a knowledge area that many startup business owners think they can assign to someone else. This is false if you want to give your company a chance to succeed. I’m not saying that you need to enter data into QuickBooks, but I am saying that you need to work with your bookkeeper to develop a chart of accounts and you need to review your books at least once a month to make sure that you understand where all your money is coming from and how it’s being spent. You should be able to tell someone what your business is worth on any given day. And that comes from being able to read and interpret financial reports. You may hire a wonderful bookkeeper, but that person may take another job one day. You need to be able to certify that your books are complete and accurate and that you have receipts and other backup materials. Your new bookkeeper will have questions. You are the person to answer them.
- Take some marketing classes. At the least, you should know how to identify your competitors, define your target market, and know how to develop a marketing plan with costs and timeline. You will find lots of marketing support in the small business technical assistance arena, with programs such as the Women’s Business Center of Northern Virginia. You also need to learn how to evaluate your marketing efforts to see if you are spending your marketing dollars effectively.
- Use your surrounding experts to make decisions around Operations. This is an area in which a lot of money can be wasted if you don’t do your homework before deciding how to run your company. For example, do you really understand the difference between a part-time employee and an independent contractor? A mistake in this decision can cost you thousands if the IRS determines that you are not placing staff in the correct categories. What’s the best location for your business? Read that question again. It is not, “what is your dream location?” but what is the best location – and that includes affordability and lease terms.
- What do you need to do to get funding? This is a broad question that includes loans, grants, and contracts. If you don’t know the funding process, and you don’t have all the paperwork organized that will be required, you will miss funding opportunities that can happen quickly.
- Learn how to negotiate. A successful negotiation is not one in which you squeeze every penny out of the person you are trying to engage. The negotiation should end in as much of a win-win as possible. Even if the result is not completely even, each party should feel that they got at least some of what they need to not feel resentful about the deal. You want to build partnerships, which require listening to the other party and making concessions. Companies that you browbeat into submission are not likely to work with you for the long term. Just like taking care of your customers so that they will give you repeat business, you should cultivate your supplier relationships.
Check out upcoming training with the Women’s Business Center of Northern Virginia on becoming an entrepreneur. Request a free, confidential counseling session.
When I first started learning about entrepreneurship, I was told that a successful businessperson needed to exhibit certain personality traits. The talk was all about who you needed to be, not what skills you could learn. What I now know to be true is that you need some of both – especially when you are in startup mode.
In this blog, we will talk about some traits that are necessary for success. We hope that you haven’t heard all these before.
- An ability and willingness to talk to strangers. If this terrifies you, start going to Toastmasters meetings, or taking a class that requires you to stand in front of a group and talk. Make it a point to walk with your head up, making eye contact and saying hello to people you pass. Practice starting up short conversation with people in the line at your grocery store. This is not a talent that you can entirely pass to an employee. This is YOUR business, YOUR product or service, and people want to hear from those at the top of organizations. Besides, if you get good at public speaking, you can gain lots of free marketing by speaking to groups of your potential customers.
- Risk tolerance. You are expected to put “skin in the game” when starting your business. How much of your own money are you willing to risk? Would you use your home as collateral for a loan? Are you willing to sign contracts and leases on your own? Be very clear about what your limits are and what you stand to lose for each risk you take. If you can’t stomach the possibility of loss, you will not make gains.
- A passion for your work – and your business. One of the lessons I learned by owning a business is that I love the work I do, but I don’t love running a business. That’s a distinction that many people don’t make in the planning stages. You must find your passion because that’s what will keep you going on days when you would rather sleep in, or you just can’t talk to that difficult client again! There’s nobody above you to turf your problems to, so do you have that extra push to power through?
- A willingness to confront difficult situations head on. You will not have the luxury of time to procrastinate when faced with challenges. You don’t need to have all the answers to every problem, but you need to be able to reach out and ask for help. And you need to be able to have conversations with difficult employees and customers. Again, you may have staff who can act on your behalf in some cases, but not all.
- The confidence to recognize that you are not always right, and to seek out opinions that may disagree with yours. We call it “stepping outside your echo chamber.” You can easily limit yourself to input that supports your own beliefs, but that can cut you off from opportunities for improvement. Widen your worldview; don’t minimize it.
- A tendency to look through the lens of gratitude. We really encourage our clients to set attainable goals for themselves so that they have frequents reasons to celebrate their business development. Mark such occasions as the payment of your first invoice, the first $1,000 in your business checking account, the signing of your first contract. If you don’t consider success anything before you’ve made your first million dollars, you will burn out and lose the passion for why you started in the first place.
The Women Business Center of Northern Virginia at Community Business Partnership helps aspiring entrepreneurs reach their goals through mentoring, workshops, and counseling specifically tailored to assist them to reach their full potential. If you have the qualities of a successful entrepreneur or need assistance to get there, we can help. Register for a free class or workshop at: https://cbponline.org/classes-counseling/class/all-classes/
To learn more about the traits that entrepreneurs need for success, give us a call today!
As we enter Black History Month and Entrepreneurship Week, we celebrate women-owned businesses that are aligned with shared values of equality and unity. Create and raise awareness for disadvantaged business owners by supporting their businesses and the products that they create. Here is how you can support minority and/or woman-owned businesses.
Do your research
Research supporting businesses and business owners in your community that are aligned with your values. Ultimately these businesses should be female-owned and -operated and employ people from disadvantaged communities;, however, you can also research businesses that support or donate a portion of their proceeds to female organizations and minority/black-owned businesses. Purchase products from these businesses or use their services as often as you can to show your support.
Use social media to spread the word
Aside from financial assistance, there are alternative and additional methods of promotion you can utilize to help businesses. You can leave a positive review of the business on their website or on Google to help the business to establish trust in their products or services. Sharing your experience with others on social media can also help to introduce companies to the community and spread the word about their business. You can also tag your favorite black-owned or female-owned business in a social media post when you make a purchase.
Start your own business for women and minorities
Create a business that supports females and minorities. You can open up your own startup business or align your current business with values that support women and minority groups. Hire more people of color and women, attend workshops and continue to educate yourself and your employees on the importance of equality and inclusion of females and minority groups in entrepreneurship roles.
The Women’s Business Center of Northern Virginia at Community Business Partnership embodies the values of Black History Month and Entrepreneurship Week. We are committed to assisting women, minorities, and disadvantaged groups with training and assistance to help them to grow their businesses. If you are thinking of starting a business or have a business that has been operating for less than two years, you can sign up for a free business session with a WBC expert Counselor here: https://wbcnova.centerdynamics.com/reg.aspx?mode=counsel¢er=65010&subloc=0
Celebrate entrepreneurship and women-owned businesses by contacting us today!
If you are a new business owner or entrepreneur, chances are you have wondered if you need to register your business. The answer is a definite yes. Registering your business as a legal entity provides several benefits such as the ability to apply for business loans, opening banking accounts and garnering a better reputation. The Women’s Business Center at CBP explains how you can register your business and the pitfalls of not doing so.
Registering with federal agencies
Instead of registering with federal agencies, most small to medium businesses file and receive a federal tax ID. As a business owner, if you want to trademark aspects of your business such as product names or the brand, you can do so by filing this with the United States Patent and Trademarks office.
Another federal agency that nonprofits need to register with in order to attain a tax-exempt status is the Internal Revenue Service (IRS).
Most jurisdictions now offer online registration, an easy way to get it done!
Registering with state agencies
If you are an LLC, non-profit, partnership or corporation, you will need to register with the official state agency where you reside or carry out business activities. These business activities include:
- Your business having a physical presence in the particular state
- Conducting one-on-one meetings with clients and customers in the state
- Receiving significant revenue from the state
- Hiring employees who work physically in the state
If your business activities extend to several states, you will need to register in the primary state and then file for foreign qualification for the other states as well.
Pitfalls of not registering the business
Even though you can conduct business without registering, there are several pitfalls that can encumber your operations:
- Lawsuits: In several states, unregistered businesses may not be eligible to file lawsuits. Even though courts may provide an unregistered business the time to file for registration, it is completely up to them whether to provide this leeway or not.
- Delays: If you are looking to register your business in a state where you have been conducting business already (prior to registration), this process can be delayed by up to 6 months. This can adversely affect the business, especially if you are looking to receive financing or licensing.
- Penalties: Several states impose penalties, back taxes and fees as well as interest on this amount from the time prior to registration.
- You may be precluded from applying for certain loans, grants and benefits (such as recent CARES Act funding) if your business is not registered.
For more information on how to register your business and the advantages of it, contact The Women’s Business CBP today!
