Getting credit with suppliers. It has been frustrating because with a lot of suppliers it takes two years for you to gain a credit account. My business relies on having the supplies to provide to my clients and if I don't have the cash to pay my suppliers then there is no way to turn a profit. I was lucky that to begin with I had two supply companies that gave me credit without any history.
However, even now in my third year of trading I am facing a similar problem. Recently I tried to get an account with a new supplier, who declined me, saying that I had a bad credit rating. I didn't understand this because I have a really good relationship with my other two suppliers and I know I have always paid my bills on time.
I was worried that this could potentially affect the business. Not only would I have more trouble getting a credit account with suppliers but my relationship with my current suppliers would suffer, because I was upset that they would have given me a bad reference.
After looking into the problem a bit further and asking a few more questions I found out that the reason I was declined was not because I had a bad credit rating, but because the credit reference agency that the supply company relied on to give them data on my business had been purchased from Companies House.
Being such a new business, and only having the numbers of my first year of trading, in which I made a loss, I was labeled as being a risk to the supplier.
In fact, the supplier I was hoping to gain credit with had not even called my current suppliers for references. When they did, they offered me a credit account straight away.
The best solution was to take accountability as director of the company and look into this problem. By digging deeper I not only proved that my business was as safe a bet as I knew it to be, but I also gained a new supplier who is beneficial to my business growth.
One of the most important things I could tell others in business
is not to take no personally. When we started our business up we
sourced a lot of our clients by going door-to-door to businesses
and offering our supplies. After a few no's you starting thinking
that it might be you, but its best to believe in your business and
keep going. Don't let rejection set you back.
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