Pay a credit card a month late, and you can count on it hurting your credit score. But there are some murkier areas you may wonder about: What happens if I marry someone whose credit is a lot worse than mine? Could my library fine from five years ago keep me from getting approved for a car loan? Does getting turned down for credit hurt my score?
We asked experts at the two biggest credit scoring companies to share what consumers mistakenly think can hurt their credit scores. Here’s what Tommy Lee, principal scientist at FICO, and Jeff Richardson, head of marketing and communications at VantageScore, had to say about:
Lee and Richardson say people worry that checking their own credit score will lower it. It won’t.
If someone checks your credit because you applied for a loan or credit card, it’s called a “hard inquiry.” Those can shave a few points off your score, but the impact disappears after six months. When you check your own credit, that’s a “soft inquiry,” which doesn’t hurt your score. You’ll see both types listed on your credit reports.
Some research suggests a link between monitoring your score and improving it, so feel free to check. It’s good credit hygiene.
You may share pots and pans, but you don’t share credit. “Each of you has your own distinct credit report, with only those credit obligations you were signed up for included in that report,” Lee says. For better or worse, credit records remain separate when you marry. Your marital status and your spouse’s credit standing don’t affect your credit score.
Fees for overdrawing your account are bad enough. You don’t have to worry about a bounced check damaging your credit score as well. That’s because bank account information isn’t in your credit report. Your credit score is calculated from the information in your credit reports. If something isn’t in your credit reports, it can’t affect your score.
It used to be that if these fines were turned over to a collections agency, the agency could report it to the credit bureaus, Equifax, Experian and TransUnion. A collection action hurts credit scores, and many people learned of forgotten fines via a large drop in their credit scores. As part of a 2015 agreement between the three credit bureaus and the New York attorney general, credit reports no longer include debts that didn’t come from a contract or an agreement to pay. That means jaywalking or a long-forgotten library book won’t hurt your credit.
Paying a credit card bill 30 days past the due date will likely put a big bruise on your credit because most card issuers report to the credit bureaus. Utility payments, however, aren’t routinely reported. A late payment could leave you without service but credit trouble isn’t likely if you eventually pay.
“If you do not pay for a lengthy period of time, those accounts go to a third-party collection agency who do report it to the credit bureaus,” Richardson says.
Your credit score might dip a bit, but only because your credit was checked when you applied, and that happens whether your application is approved or denied. A hard credit pull — the kind that happens when you apply for credit — can shave a few points off your score, but a credit denial won’t be on your credit report and won’t affect it.
There’s a persistent myth that carrying a small balance on your credit card is better for your credit than paying your full balance every month.
The portion of your credit limit that you use — called “credit utilization” — does affect your credit score. But there is no benefit in paying less than 100% of your statement balance — and paying the bill in full is best for your credit.
Losing an income source can certainly make it tougher to pay your bills, but your income doesn’t directly affect your score.
It can, however, make it harder to obtain new credit, Lee says. “Lenders may look at many factors not found in your credit report when making a credit decision, such as your income, how long you have worked at your present job and the kind of credit you are requesting.”
Even more important than knowing what won’t harm your credit is knowing what will help you build credit:
Bev O’Shea is a writer at NerdWallet. Email: [email protected]. Twitter: @BeverlyOShea.
The article 8 Things That Won’t Hurt (Whew!) Your Credit originally appeared on NerdWallet.
Owning your own business puts you in the driver’s seat, but the road to success isn’t always clear. A business mentor — someone who’s made mistakes, learned lessons and has advice — can keep you headed in the right direction.
Pamela J. Goodwin, CEO and founder of commercial real estate company Goodwin Commercial in Dallas, Texas, connected with her mentor, Jim Christon, president and owner of Christon Company Realtors, after deciding to start her own firm.
Not only did Christon become Goodwin’s mentor, he also helped get her business off the ground by becoming her partner, providing capital in return for a percentage of profits.
“Jim always knew that if you were taken care of financially, you could focus on creativity and getting deals done,” Goodwin says. “I really learned a lot from him.”
Beyond the nitty-gritty of commercial real estate, Christon taught Goodwin the value of building business relationships, a skill he mastered over roughly 60 years in business.
“He built good relationships with a lot of people,” she says. “He had a really good reputation in the city, so I knew I was in good hands.”
Christon encouraged Goodwin to write follow-up letters or send articles she thought potential business partners might be interested in. It lets them know you’re thinking of them, Goodwin says — so when it’s time to do business, they’ll be thinking of you in turn.
In a survey of its clients, mentorship consultancy MicroMentor found that 83% of mentored businesses survived two years, compared to 74% of nonmentored businesses. The same survey also found that mentored businesses were more likely to launch and had greater revenue increases than those without a mentor.
Ultimately, you’re asking business owners who have been there and done that to share real-world best practices and help you avoid pitfalls.
“A lot of this stuff is not taught,” Goodwin says. “You have to look for someone who has the experience.”
Mentor relationships can be both formal and informal. Some local chambers of commerce have community-based mentorship programs. You can also ask trade associations for your industry about programs that connect entrepreneurs with established business owners.
SCORE, a nonprofit that partners with the U.S. Small Business Administration, is another resource. Experienced business professionals volunteer to help new entrepreneurs through a free mentorship program that’s available in person or via email, phone or video chat. The program has 300 chapters across the country and helps roughly 140,000 small-business owners each year.
Goodwin, now a mentor herself to three others, suggests a personal approach to establishing a mentoring relationship. First, make a list of people you respect in your industry; it can be local connections or big shots you follow on social media. Then, come up with a personal way to make contact.
In today’s age of digital anonymity, skip the generic email; rather, write a short letter or send a thoughtful gift, like one of your favorite books. If you’re trying to get face time with an industry notable, attend a conference where he or she is speaking and introduce yourself.
Don’t be discouraged if your first request goes unanswered, Goodwin says. “If you really want to meet someone, just keep pursuing it.”
Be upfront with what you need: You should have an idea of what you’d like to get out of the relationship and be clear about those goals with your mentor. Whatever you do, don’t ask to “pick their brain.”
“It’s insulting to want to ‘pick your brain’ for free,” Goodwin says.
Don’t waste your mentor’s time: Being successful is a busy business, so use his or her time well. Show up to a meeting knowing what you want to discuss, and don’t expect the mentor to run the show for you.
Remember, it’s not all about you: “Give them something in return, too,” Goodwin says. “No matter where you are in your career, everyone needs help with something.” It can be as basic as research or as complex as designing a website.
“It can be whatever you feel like you can give back with your expertise,” she says. “There’s always something you can give back.”
Jackie Zimmermann is a writer at NerdWallet. Email: [email protected]. Twitter: @jackie_zm.
The article Fuel Your Business’s Success — Find a Mentor originally appeared on NerdWallet.
After being laid off as a journalist, Dorie Clark realized that being her own boss was the best way forward. In the next several years of self-employment, she discovered one important trait: willingness to learn.
“There’s an essential mindset for being your own boss,” says Clark, a New York City-based marketing strategy consultant and author of “Reinventing You.” “You have to be the one who brings in the business.” Getting away from an employee mentality is hard, Clark says. Defined tasks are a thing of the past for many, and being your own boss means honing many skills and focusing on the big picture. “Entrepreneurs don’t own a task,” she says. “They own an outcome.”
But the payoff for mastering your own destiny can be big. Income is potentially unlimited. Your free time is highly flexible. And you’re not reliant on one client — your employer — anymore. Not having a paycheck is frequently seen as risky, she says. But entrepreneurs actually are risk mitigators. “As a small business, you’re relying on multiple clients, so you’re better positioned to weather disruption,” she says. In her experience, she adds, “It’s much safer financially.”
There’s no entrepreneurial gene, Clark says. Success comes from working hard — and taking the following steps.
Understanding what you’re good at is key, Clark says. That can mean relying on skills you already have, pinpointing your passions and experimenting with different niches. After becoming an entrepreneur, Clark tried political consulting, but she quickly realized she wasn’t getting much traction. More business was coming from nonprofits and other companies, so she focused her efforts accordingly. “Learning that early on [was] critical,” she says.
Social media is a key tool for building a business these days. You can do that by blogging, posting photos on Instagram or Facebook, tweeting or producing a podcast. Clark points to serial entrepreneur Gary Vaynerchuk as an example. He originally started blogging about wine. “And then he realized that he was a terrible writer,” she says, “so he moved to video.” Now he has nearly 800,000 subscribers to his YouTube channel. “If you’re not good at writing, Instagram is a great venue,” Clark says. “And you’re only required to take photos, which nearly anyone can do, such as for wedding planning.”
Understanding what customers need is your main mission, and that means talking with them about what they want. Start with your own network, where you’ll have an audience you already know and who knows you. “Never insist on doing things your way without getting new information,” Clark says. “Get close to customers so you can tweak pricing or service.”
While you can outsource some skills, like bookkeeping, it’s best to learn others yourself. For example, be your own salesperson. “You are the most believable messenger,” Clark says. “There’s something powerful about hearing about a product from the founder.” Developing solid speaking skills is important, too. “You can get lots of mileage out of it,” she says.
Clark recommends building a board of advisors to mentor you over time. “A trusted group of people in your industry is very helpful for alerting you to new trends,” she says. Clark relied on her own network when she started teaching courses on the website Lynda. She asked: How do you market the courses effectively? How do you follow through with students? “You can’t figure this out in a vacuum,” she says. “It can be lonely being an entrepreneur,” she adds. “You have to figure out everything on your own. But building a network makes an enormous difference.”
The article Becoming an Entrepreneur Starts With Changing Your Mindset originally appeared on NerdWallet.
As a first-time parent, you’ve probably been warned about sleepless nights, feeding struggles and the persistent fear that you have no idea what you’re doing. But did anyone mention the temptation to buy a $30 Thanksgiving onesie that your baby would wear for about five hours?
It’s easy to overspend when you’re giddy and exhausted, but we have your back. When you get five minutes to yourself — OK, if you get five minutes to yourself — consider these money-saving techniques.
Your wallet and future self will benefit if you buy clothes and other items off-season, says Cherie Lowe, author of “Slaying the Debt Dragon” and the blog “Queen of Free.” So scoop up that 80%-off sundress now, in the size you estimate your kid will be wearing next summer. When she’s invited to a birthday party in May, you won’t need to schlep to the store and buy a full-price outfit. As Lowe, a mother of two, puts it: “You’re going to be making better decisions if you already have stuff in the closet.”
Yes, that tiny cashmere sweater is adorable. And when you’re online shopping on three hours of sleep, it’s totally worth $40. Add the item to your cart, but don’t buy it until you’ve had at least 24 hours to consider the purchase. Within that time, Lowe says, “You gain a lot of clarity of what you need versus what you want.”
If the sweater (or whatever) still seems like a logical buy and fits within your budget, go for it. If you pass because your kid will fit into it for one month, and cashmere isn’t cute when it’s covered in spit-up, then save yourself the $40.
Those tiny, matching outfits are nice, but your 6-month-old doesn’t need 20 of them. She’s not Carrie Bradshaw, and she’ll grow out of them faster than you can post the cuteness to Instagram. Lowe suggests creating a “capsule” wardrobe — a limited set of basic items with interchangeable patterns and colors. “Inevitably, you’ll end up with stains on the top or the bottom and won’t have to ditch an entire outfit if something goes awry,” she says.
Sara Andersen, co-founder of the personal finance blog Mustard Seed Money, has bought enough cloth diapers from Craigslist to cover most of her toddler’s needs since he was an infant. (She’ll reuse many of those diapers for her newborn.) She buys only “gently used, well-maintained” diapers on Craigslist, she says, which are usually much less expensive than new ones.
Andersen has also gotten plenty of free stuff from Craigslist, including two double strollers, several bags of clothes and many, many toys. “Our basement is a playground for our son at this point, and every time I go down there, I’m just baffled about how many of those things were free,” she says.
Andersen washes and/or disinfects Craigslist purchases and never buys safety-related items secondhand. You should buy new car seats and cribs, for example.
Diaper runs are dangerous for your budget. When you need diapers, you need them now, which Lowe says often leads to a midnight run to a big-box store. “You’re in a weak moment … you end up wandering around like a lost toddler,” she adds. You get the diapers, sure, but three movies from the $10 DVD box somehow land in your basket, too.
If you sign up for a diaper-delivery service, you’re always stocked up. Lowe suggests Amazon Family, which offers discounts on disposable diapers when you subscribe to recurring deliveries of certain brands. The site provides food subscription services, too, and plenty of coupons.
The convenience of prepackaged baby food comes at a cost. Many parents save money by making it at home with a blender or food processor. Another benefit: Because you’re buying the groceries, you know exactly what’s in your child’s food.
As your child gets older, resist spending downtime at trampoline parks and arcades, and stick to local parks. “You’re not only saving money, you’re simplifying,” Lowe says. “You’re not worried about someone throwing up in the ball pit.” Hanging out at the park gives you and your child opportunities to make friends, she adds.
You can also check the website of your community’s visitor’s bureau for a calendar of events, such as outdoor concerts, playdate groups and library readings. Those events are usually free or inexpensive and offer “a great way to tap into your community,” Lowe says. And the more seasoned parents you meet at the park may be able to point you toward some local gems.
For many parents, kids’ birthday parties are an expensive “Pinterest hole,” Lowe says. And chances are, you care more about the themed cake, goody bags and inflatable castle than your toddler. “You have to ask yourself,” Lowe says, “Do you remember your third birthday party?”
Go ahead and celebrate birthdays. But to keep expenses in check, Lowe suggests saving blowouts with friends for landmark birthdays, such as ages 1, 5 and 10. Enjoy smaller, family gatherings other years.
It’s fun to be festive, but before buying a seasonal item, consider its longevity. Will your kid enjoy it this Thanksgiving and next? Or will it become clutter that you inevitably step on? As Lowe puts it: “The reindeer markers are great, but by Jan. 5, everyone has forgotten about Santa and Rudolph and are off to the next thing.”
Consider value, too. Holidays are the perfect time for vendors to mark up junky items with turkeys and jack-o’-lanterns printed on them. Along those lines, Lowe says, “Stay out of the dollar store.”
Lowe suggests asking parents whose kids are a few years older than your child how they saved money.
All parents, including these experienced moms and dads, slip up sometimes, Lowe says. After all, tiny cashmere sweaters and Rudolph markers are really cute. “It’s all about course correction and learning from your mistakes,” she says.Laura McMullen is a writer at NerdWallet. Email: [email protected]. Twitter: @lauraemcmullen.
The article 10 Money Hacks for First-Time Parents originally appeared on NerdWallet.
San Jose, California – October 15, 2020: Nutanix (NASDAQ: NTNX), a leader in enterprise cloud computing, announced today that Highland Bank, a privately-held, business focused bank implemented Nutanix hyperconverged infrastructure (HCI) to enable employees to work from anywhere in response to the COVID-19 pandemic, as well as increase the flexibility and reliability of their infrastructure.
As a trusted advisor, Highland Bank assists their customers in a variety of ways, whether it is sharing their expertise in business lending, government-backed loan solutions, real estate lending or commercial/industrial loans. In order to deliver the best service possible, they rely heavily on their infrastructure to deliver a seamless and easy banking experience.
When the COVID-19 pandemic struck, business conditions underwent a dramatic shift. With Nutanix already installed as part of their VDI (Virtual Desktop Infrastructure) environment, Highland Bank was fully prepared to support a highly remote workforce. Nutanix has not only enabled employees to work from home but has also helped to increase the speed and responsiveness, improving not only the IT teams experience but the end-users as well.
“We had done such a good job in investment that we had the flexibility to enable our employees to work anywhere, and the entire process was seamless for us,” said Craig Boivin, Chief Technology Officer, Highland Bank. “When we moved more than half our employees to work from home and converted to drive-through service, we had all the components in place. We didn’t need to scramble at all, and the Nutanix solution gives us the ability to run on any device.”
Prior to Nutanix, Highland Bank had an outdated IT infrastructure that was unreliable and inflexible. In addition, they were also running out of resources within their environment. Instead of investing in a short term solution like adding more random access memory (RAM), they decided to refresh their entire IT infrastructure.
After implementing Nutanix, Highland Bank is now able to access the banking and productivity resources they need from any device. With Nutanix, they are now able to condense everything into a single hyperconverged infrastructure to support all their technologies and manage it all from one console. This consolidated management allows their small IT team to do more with fewer resources.
“With Nutanix in place, Highland Bank is now able to focus on improving the experience of their end-user instead of worrying about processes and management that took up much of the IT team’s time”, Nikola Bozinovic, VP & GM, Desktop Services at Nutanix. “Nutanix allowed Highland Bank to quickly adapt to the changing needs during this unprecedented time. It is crucial that businesses are still able to provide their customers with the help and services they need, and with Nutanix Highland Bank is able to continuously deliver these services.”
Highland Bank is continuing to evaluate new ways Nutanix can improve the performance and reliability of their infrastructure.
About Nutanix
Nutanix is a global leader in cloud software and a pioneer in hyperconverged infrastructure solutions, making computing invisible anywhere. Organizations around the world use Nutanix software to leverage a single platform to manage any app at any location at any scale for their private, hybrid and multi-cloud environments. Learn more at www.nutanix.com or follow us on Twitter @nutanix.
© 2020 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo and all Nutanix product and service names mentioned herein are registered trademarks or trademarks of Nutanix, Inc. in the United States and other countries. All other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This release may contain links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site. This release may contain express and implied forward-looking statements, which are not historical facts and are instead based on our current expectations, estimates and beliefs. The accuracy of such statements involves risks and uncertainties and depends upon future events, including those that may be beyond our control, and actual results may differ materially and adversely from those anticipated or implied by such statements. Any forward-looking statements included herein speak only as of the date hereof and, except as required by law, we assume no obligation to update or otherwise revise any of such forward-looking statements to reflect subsequent events or circumstances.
The rules for protecting credit during the holidays usually don’t vary much from year to year, but in 2020, COVID-19 has changed where and how we shop. And money’s tight for a lot of people. About 40% of Americans said they plan to spend less on holidays this year due to the pandemic, according to a recent NerdWallet survey.
On the other hand, some may be tempted to overspend if mortgage forbearance, loan deferrals or credit card concessions have helped them build savings. But if holiday purchases leave shoppers unable to cover even minimum payments when those other bills resume, their credit will be badly damaged, says Jeff Richardson, senior vice president for marketing and communications at VantageScore, a credit scoring company.
Whether you’re being more generous or watching every penny, chances are you’re shopping online. Tom Quinn, vice president of FICO Scores, a credit scoring and data company, warns that consumers may be at higher risk of identity theft this year. It’s all too easy to go for deals we hope are real or fall victim to increasingly sophisticated phishing messages.
Here’s how experts recommend guarding your credit.
Many credit cards and personal finance websites offer free credit scores, Quinn says. Choose one that offers a clear explainer of why your score is what it is. Understanding the factors that hold you back — for example, too many cards with high balances — can help you make spending decisions.
How to do it: Pick a source you like and stick with it. Free scores vary in the credit bureau data and scoring model used.
And look ahead, Richardson suggests. If you’re planning to shop for a car or home loan next year, start thinking about your credit health now, he says.
One of the things that matter most to your score is how much of your credit limits you’re using. That’s called “credit utilization,” and it’s best to stay under 30%. If you can, aiming even lower is better.
How to do it: Many credit cards offer account alerts to help you keep track. Sign up for those, and use your free credit score source to track credit utilization as well.
According to NerdWallet’s holiday shopping survey, about a third of those who used credit cards to buy gifts were still paying for the 2019 holidays when surveyed in September 2020. Adding to existing balances means higher credit utilization, which can hurt credit scores. Richardson cautions against taking out a loan to “make room” on cards for holiday spending.
How to do it: Find gift ideas that will bring joy without costing much — purchases made using credit card points, framed original art from your child, sharing skills you have. The internet is full of good suggestions. And if money’s tight all around; a suggestion to skip exchanging gifts this year could be welcome.
Retailers may offer a discount if you open a credit card with them at checkout. But applying for new credit can ding your score in a few ways. You could lose a few points when the application triggers a credit check called a “hard inquiry.” If you’re approved, a new account will lower the average age of your credit. And cards tied to a specific retailer can hurt your credit utilization because they often have low limits. So make sure it’s worth it.
Quinn says a credit card tied to a specific retailer can be a good idea if it offers a meaningful discount on a big purchase. “That can be enticing,” he says. Beverly Anderson, president of Global Consumer Solutions at the credit bureau Equifax, says a card at a retailer where you frequently shop may also get you early access to sales.
How to do it: Plan ahead; don’t decide at checkout. That gives you time to investigate your odds of being approved. You don’t want to potentially lose credit score points for applying only to be denied. If you’re approved, make a plan to avoid carrying a balance because paying interest will cut into your savings.
Being suspicious can keep you from becoming a victim of identity theft or fraud. Consumers may get phone calls, texts or emails requesting personal data from scammers pretending to be card issuers or retailers. Quinn says when he got a recent email with a subject line “re: your recent Amazon purchase,” his first instinct was to try to recall what he had bought. Then, he looked closer and noticed the sender’s email address wasn’t the official address for the company.
How to do it: Be leery of any communication that asks for sensitive data, such as a card or account number. Don’t click on attachments. If you think a message may be legit, independently verify contact information and initiate a call or email yourself.
Check statements carefully for purchases you didn’t make and report them to your card issuer promptly.
Freeze your credit. It’s free and you can do it by phone or online at the three major credit bureaus: Equifax, Experian and TransUnion. You can still use your credit cards, but criminals should be unable to use your personal data to open an account. Unfreezing is easy when you want to apply for credit.
When holiday bills start to arrive, pay at least the minimum on time. A payment that’s 30 days or more past due can devastate your credit score and linger on your credit report for seven years.
Consider setting up autopay to cover at least the minimum payment, Anderson says. That ensures you don’t overlook a bill, and you can always make an additional payment to wipe out more than the minimum.
Bev O’Shea is a writer at NerdWallet. Email: [email protected]. Twitter: @BeverlyOShea.
The article How to Protect Your Credit When Shopping for the Holidays originally appeared on NerdWallet.
For some entrepreneurs, the types of businesses to start are obvious from the get-go. For others, a little more soul-searching might be in order. And finding the best answer to that question you keep asking yourself—”What kind of business should I start?”—certainly deserves a good bit of attention.
Because deciding what kind of business to start is such a weighty decision, it only makes sense to consider all the possibilities and to scrutinize multiple options. But don’t settle for some one-size-fits-all quiz to tell you what kind of business you should start. Deciding on what type of business to open will depend on your own unique experience and preferences.
To help, we’ve compiled a six-step guide based on the experience of entrepreneurs who have successfully answered, “What kind of business should I start?”
Here are your six questions to ask when deciding what kind of business you should start.
Based on the experiences of entrepreneurs who have successfully decided what kind of business to start, we’ve come up with six crucial questions to ask yourself to determine the perfect small business idea to act on. So, to answer the ultimate question of what kind of business you should start, first tackle these questions. With these six answers, you’ll be able to localize the best business to start, based on your own individual goals and experiences:
Ashley Hill, founder and CEO of College Prep Ready, says she started her business because she had personal success financing her college dream.
“I researched the challenges that students and families are experiencing with paying for college to help me refine my core message and services,” she says.
From her experience and research, she learned that there was a market for the knowledge she had to offer. With Americans in trillions of dollars of student loan debt, Hill understood the pain points of students and parents when navigating the college application and financial aid process. She took this understanding and converted into a business that assuaged the difficulties she had witnessed.
Similarly, Victoria Garlick, CEO of event services matchmaking website Air Events Global, also believes in choosing a business based on experience and skill set. Hers is built off of a 20-year career in event planning.
“When deciding on what type of business to start, I looked at my personal and professional history and what I could contribute as an event director,” says Garlick.
Another common recommendation entrepreneurs shared with us is to find and follow your passion. Nick Ehret, founder of Varieteas, is passionate about tea. So, he built a successful business by curating specialty teas for his monthly subscription boxes.
He’s a premium tea aficionado who knew he could transform his passion into a business. His advice to people when picking a business to start is to “[choose] something you are extremely passionate about because you will be working with it all day, every day.”
Brian Davis, CEO of Spark Rental, subscribes to a Japanese concept called ikigai. It means “reason for being.” In this context, Davis says, a truly good business idea is at the intersection of four things: what you love doing, what you’re good at, what you can be paid for, and what the world needs.
We all know that necessity is the mother of invention, but applying that knowledge to the business world hasn’t always been the next step. An entrepreneur who converts that need to a business plan could swiftly become a successful business owner. As any consumer can tell you, problems and pain points abound in just about any industry. Finding out what these difficulties and inefficiencies are—and coming up with a business plan to fix them—is a sure-fire way to step out on the right business path.
Take the dog bed company Big Barker, for example. This company generated $4.75 million in revenue in 2016. Eric Shannon, founder and CEO, saw a glaring problem in the market for dog beds. “I started Big Barker because there was a huge problem that large dog owners had to deal with. They had to replace their dog beds once or twice a year because they weren’t made well enough to support the weight of a big dog.”
Shannon adjures would-be entrepreneurs to solve big problems: “The bigger problem you solve, the more potential your business has.”
Your business goal may or may not include revenues in the millions and employees in the thousands — and that’s OK. Perhaps what’s most important to you is choosing a business model that supports your ideal work-life balance.
Antonella Pisani was a VP of global ecommerce for Fossil and held leadership roles at JCPenney, Guitar Center, and ProFlowers. But her primary interests were in travel and photography. Because she knew she would prefer mobility in order to pursue these interests, Pisani knew she needed a flexible business model that wouldn’t require space or inventory.
This was the impetus for creating her websites, Official Coupon Code and FACT Goods. These flexible, web-based businesses have allowed her to work from Antarctica, the Arctic, Bhutan, Morocco, and other countries.
The lean startup wasn’t a fad after all. In fact, the concept grew from one inevitable and enduring truth about starting a business — people don’t want to risk their life savings on a business idea they have yet to prove or make profitable.
A great example of this fact is Robert Lomax, who founded an educational services firm, RSL Educational, based on needs he saw in his day job as a teacher. Not only did his teaching experience help him see gaps in the educational books market, but it also gave him the ability to keep his job and develop new products. Because he had a steady income as he founded his firm, Lomax was able to avoid taking on debt and minimize risk while he grew his business.
And he wouldn’t have done it any other way. According to Lomax, his approach is ideal because it allows you to “take your time and explore your ideas properly.”
Facebook CEO Mark Zuckerberg once said, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”
In other words, your business idea should be something you can prove (or disprove) early on. If you’ve got no experience in the trucking industry, starting a logistics company would be costly to test out. Instead, think about the lower hanging fruit in industries that interest you.
Marc Roche, co-founder at Annuities HQ, a Canadian online resource on retirement-planning products, suggests doing preliminary research with family and friends, and then move on to the Internet for some more digging.
“Don’t be afraid to try a have a few ideas in mind to ‘test drive’ before you choose a direction,” Roche says. “Do some basic research online and get a feel for what idea will be worth the time and effort of developing into a business.”
Maddie Shepherd writes for NerdWallet. Email: [email protected].
The article What Kind of Business Should I Start? originally appeared on NerdWallet.
Seniors are increasingly becoming targets for financial abuse. As people over 50 years old control over 70 percent of the nation’s wealth, fraudsters are using new tactics to take advantage of retiring baby boomers and the growing number of older Americans. Learn more from the American Bankers Association about senior financial abuse, how to prevent it, and what to do if you or a loved one is a victim:
Small businesses that survived the COVID-19 pandemic still face a long road to recovery, but some of the innovations business owners adopted last year may outlast the pandemic itself.
“If you make it through this, you ask, you learn, you adapt, and I think it only makes you stronger,” says Keith Hall, president and CEO of the National Association for the Self-Employed.
Here are four ways small businesses adapted in response to the pandemic that may have long-lasting effects on future operations, according to industry experts and business owners themselves.
1. Creative business models
The pandemic forced businesses to find new ways to serve their customers — and quickly, says Meghan Cruz, director of grassroots advocacy at the National Retail Federation.
Now, that small-business owners have built out new infrastructure, like curbside pickup and e-commerce operations, they can continue using the hybrid business models they adopted during the pandemic, she says.
Within a few weeks of the pandemic shutdowns, Keith Wallace, founder of the Wine School of Philadelphia, was facing possible bankruptcy. Unable to open the doors of his business’s in-person-only classrooms, Wallace had to cancel wine classes for thousands of people.
“The only way to survive was to pivot,” he said via email. “I realized this was the time to try something audacious.”
Wallace repurposed his office into a recording studio, turned the main classroom into a video studio and taught himself how to produce and edit videos. By September 2020, the school launched its first online-only Level One Sommelier Course, an eight-week program.
By December, Wallace was able to recoup about 30% of the business’s income through the online programs.
Now, he is working on launching three additional online programs nationally within the next year.
“This change is forever,” he said.
2. Investment in digital tools
Prior to the pandemic, many small-business owners used technology as a secondary approach to business, according to Hall — but that shifted in 2020.
A 2020 Salesforce report found that growing small businesses were more likely to accelerate the pace of investing in technology due to the pandemic.
“Previously, we were a company that welcomed guests at our front counters with a handshake and a smile,” Clark Twiddy, president of Twiddy & Company, a family-owned vacation rental company in the Outer Banks of North Carolina, said via email.
Twiddy said when the company closed its in-person counters due to COVID, investing in technology enabled them to “deliver Southern hospitality in a way never before imagined.”
Twiddy & Company started using Salesforce for customer relationship management, scaled up its phone technology to Genesys, a cloud-based system, and introduced an AI chatbot to help customers on its website.
3. Reconnecting with the community
Small businesses have long been an integral part of the communities they inhabit. And during the pandemic, Cruz says, business owners stepped up to help those communities, even when they were in difficult positions themselves.
Cruz tells the story of Cardsmart Greetings, a small gift shop in Buffalo, New York, whose owner, Tracey Mangano, ran a hand sanitizer distribution event in her community, despite her business being closed. Cardsmart was recognized by the National Retail Federation and the Qurate Retail Group as part of their Small Business Spotlight series.
Small businesses, Cruz says, “were able to be there for their communities when the communities needed them the most. And I think that trend will stay.”
4. New opportunities
An April 2021 Federal Reserve report concludes that we’re unlikely to understand exactly how many small businesses have closed their doors since the start of the pandemic until it’s long behind us.
But on the other side of that coin: 4.3 million businesses were formed in 2020, according to data from the U.S. Census Bureau. That represents a 24% increase in new businesses from 2019.
Not all of the growth over the past year can be attributed to people finding their entrepreneurial spirit, Hall says.
Many employees who were laid off continued to work in their industry, such as real estate, marketing or accounting. But out of necessity, they became self-employed business owners, Hall says.
These self-employed professionals have found opportunities by connecting with other small-business owners looking to outsource back-office work they traditionally did themselves.
“There’s a fundamental shift in opportunity,” Hall says. “A fundamental shift in the demand curve for new small businesses. And I think millions of people are going to benefit from that.”
This article was written by NerdWallet and was originally published by The Associated Press.Randa Kriss writes for NerdWallet. Email: [email protected].
The article 4 Small-Business Innovations That Will Outlast the Pandemic originally appeared on NerdWallet.
For 42.9 million student loan borrowers, it’s been 18 months without a payment. That ends in October — ready or not.
The interest-free federal student loan payment pause, known as a forbearance, was extended three times after it initially went into effect in March 2020 as a way to help reduce the financial blow many borrowers experienced as a result of the pandemic.
But with payments set to resume in a few months, servicers — the companies that manage student loan payments — are already fielding thousands of calls a day from borrowers seeking student loan help, according to Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade organization for student loan servicers.
Time is running out for both servicers and loan borrowers to prepare for repayment.
While Education Secretary Miguel Cardona has indicated it’s not “out of the question” to extend the loan forbearance beyond Sept. 30, for now borrowers should be prepared for bills to come due sometime in October (they’re supposed to be notified at least 21 days prior to their exact billing date).
Servicers are expecting borrower demand for help to increase and may have trouble keeping up. The repayment system has never been turned off before, so no one is sure what restarting it simultaneously for 42.9 million people will look like.
“We don’t have any guidance from the department [of Education] about what a resumption strategy would look like,” says Buchanan. “We are in the time frame where those plans need to be communicated; it cannot wait.”
Richard Cordray, the newly appointed head of the Education Department’s federal student aid office, told The Washington Post for a story on June 11 that restarting payments was “a very complex situation” and said the office planned to provide more information to servicers soon. He also said the department planned to hold the servicers accountable by setting rigorous performance benchmarks.
Despite the uncertainty, if you’re worried about your ability to make payments, there’s no downside to contacting your servicer now to beat the rush, says Buchanan. Ask about your best options to manage payments, depending on your situation.
If you’re not sure who your servicer is, log in to your My Federal Student Aid account to find out. To ensure you don’t miss any notifications, check that your contact information is up to date on your loan servicer’s website and in your StudentAid.gov profile.
“Your options are not ‘pay or default,’” says Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators. “There are options in between for lowering payments. Nobody, including the federal government, wants to see you go into default.”
Default happens after roughly nine months of late federal loan payments. It can result in a damaged credit score, wage garnishment, withheld tax refunds and other financial burdens.
Servicers may be your first point of contact, but they don’t have to be your last. You may have other needs your servicer isn’t providing, such as financial difficulty beyond your student loans or legal advice.
Cash-strapped borrowers can find legitimate student loan help for free with organizations such as The Institute of Student Loan Advisors. Other student loan help, such as a credit counselor or a lawyer, will charge fees. You can find reputable credit counselors through organizations such as the National Foundation for Credit Counseling.
Financial planners can also help, but it’s best to look for one with student loan expertise, such as a certified student loan professional.
You can find legal assistance, including advice on debt settlement and pursuing bankruptcy, with lawyers who specialize in student loans or with legal services in your state as listed by the National Consumer Law Center.
If your issue is with your servicer, contact the Federal Student Loan Ombudsman Group, which resolves federal student aid disputes. You can also file a complaint with the Federal Student Aid Feedback Center or the Consumer Financial Protection Bureau.
Legitimate student loan help organizations won’t seek you out with offers of debt resolution through unsolicited texts, emails or phone calls. Most importantly, you don’t have to pay anyone to apply to consolidate your debt, enter into an income-driven repayment plan or apply for Public Service Loan Forgiveness.
“The hard and fast rule is that applying for [consolidation and repayment] programs is free,” says Kyra Taylor, staff attorney focusing on student loans at the National Consumer Law Center. “I think when people realize what they can do for free, it makes it easier for them to spot scams.”
And don’t fall for any company that promises to forgive your student loans or wait for the government to do so — thus far, no executive action from President Joe Biden or legislation from Congress has come to pass.
Anna Helhoski writes for NerdWallet. Email: [email protected]. Twitter: @AnnaHelhoski.
The article With Student Loan Payments Set to Return, Here’s How to Get Help originally appeared on NerdWallet.
