Experian has just released the Women in Business credit study, which is a three year study of around 2.8 million credit files for small business owners, and one of the key findings in this study was that, women business owners in particular, are reliant upon personal forms of credit, and they may be at a disadvantage through this practice. So we wanted to talk to some women business owners about business credit. First up is Sara Evans from Sevans Strategy.
Experian: Sarah, could you tell us a little bit about your business and how you got started in PR?
Sarah Evans: Certainly, I was a PR major in college. And, when I originally graduated I was very interested in the nonprofit sector, so I went to work for the largest health care system in Illinois, and focused heavily on communications, internal comms and government relations. From there did some PR agency work and then became director of communications for a small community college. And throughout all of that it was at the time of emerging media or digital media and I was a bit far ahead of my nonprofit hat that I was wearing. So, at night I would go home and consult for companies and businesses who are ready to do emerging technologies, planned and implement them and essentially worked myself out of a job and have now had my company Sevens Strategy for the past 10 years focused specifically on digital PR?
Experian: Do you rely on personal forms of credit for your business?
Sarah Evans: I am completely self-funded. In fact, when I transitioned out of my traditional day job I had an amazing boss at the time. We did a three month exit strategy, so they could find my replacement. And so, I could also build up enough business, steady business to be able to move forward. And, because of that I believe I set myself up in a way that it has, it has done well.
Experian: Have you ever run your business credit report?
Sarah Evans: I haven't. Perhaps I should. I know Experian could probably help me with that.
Experian: Well our study revealed that many women business owners will fund their operation through personal forms of credit. Is that something that surprises you?
Sarah Evans: It doesn't surprise me, no. I think some of it is, for example when I decided to get into business for myself, I didn't have necessarily the business acumen or the background or a business degree. A lot of it I learned on the go. So, you take your habits or best practices that you may already use in your everyday life and just transition them over to business. I think a lot of it is learn as you go or finding and learning from industry experts that can help you do better.
Experian: So do you think there's a need for additional resources around building strong credit and best practices in business credit?
Sarah Evans: I think there is a huge opportunity and in fact if it already existed I would have had no idea. I also think it's important for this up and coming generation especially as we see an uptick in the rise of entrepreneurs. Every day we see new businesses and product ideas that are launching. There are prime candidates out there that may be great at honing an idea or bringing a business plan to life but not sure about the financial aspect of it. It'd be great to have a partner and a resource area where you could go to, and not just from the credit bureaus themselves or financial institutions themselves, but from trusted business resources who might work with them. So that I don't feel like I'm going all in on an institution that I may not have full trust in, but I might trust someone that they work with or that has used them already.
Experian: Well thanks for coming on and sharing about your business Sarah.
Sarah Evans: Thanks so much Gary.
Experian: Well next we're going to speak to Linda Waterhouse and she is the owner of WSI, a digital agency. Linda, can you tell us what your business is primarily focused on right now?
Linda Waterhouse: Yes, I am a digital marketing strategist, and I focus on helping professional women use LinkedIn for lead generation.
Experian: Ok that's great. And so how long has your business been in business?
Linda Waterhouse: My business. I've been running my business for about six years now.
Experian: So how do you feel about taking on debt for your business?
Linda Waterhouse: I have so far just invested our personal money rather than going outside to a bank or other lending facility to get a loan.
Experian: So, can you tell us why you have used personal forms of funding for your business?
Linda Waterhouse: I haven't really relied on like personal credit cards. I've delved into our long-term savings with the intent of paying it back. Part of that was because I thought that it was less expensive to not pay interest on that. All we would be losing is the interest that that money would be earning and since interest levels are low right now, I didn't think that that would be as significant as if I were to go out and get a loan, and I don't know what the interest rates are, you know, 5, 10 percent. So it seemed like a more economical way for me to start my business.
Experian: And can you talk a little bit about the growth of your business?
Linda Waterhouse: This year I decided that I was really going to focus on one social platform which is LinkedIn, and to help women business owners primarily learn how to use it for lead generation, because many people still think of LinkedIn as just for job searchers and recruiters.
Experian: So Linda, have you run your own business credit report?
Linda Waterhouse: Oh, you caught me. No, I haven't because I don't have any immediate plans to take a loan. So I have to say that I do not have any credit or I don't know what my credit score is.
Experian: So, if there were resources on building and maintaining strong credit, would you take advantage of those resources?
Linda Waterhouse: Yes. And I think taking people through the process would help starting or creating another opening another credit card is something that I've done personally? So, opening one for my business is very familiar and I can do it online. I have no idea how to do a business loan. I don't know which bank to pick. So, that's you know the unknown is always something that people are going to be wary of.
Experian: Last question. What do you like most about being a business owner?
Linda Waterhouse: The best part of being a business owner who works in digital or online is the fact that I can work from nearly anywhere. I recently accompanied my husband on a trip to Brussels in Amsterdam. He had work there, and I went with him and I could keep up with my work when I was there. So we were able to have a longer stay there than I would have been able to had I been tied to work here in New Jersey.