Growth, Hints and tips
Why a good credit score is the foundation of your construction business
Posted on by Katie Hook
Estimated read time: 3 mins
Working in the construction sector, you’ll be no stranger to the importance of good, solid foundations in any building. Did you know the same too is true in business, with strength and stability being the key to any business that is going to stand the test of time? But how do you ensure your business is robust enough to withstand any storm?
The answer lies in having a good business credit score. Tools such as Experian’s My Business Profile, are a great way to check how your business is performing. A good credit score is a sturdy ground for facilitating growth and is essential for any business that is going to withstand the extreme climates often found in the construction sector.
Paying invoices late, failing to file annual returns and financial accounts on time and racking up County Court Judgments (CCJ) are never good. If not monitored, the cracks in the walls of your business will soon be visible for all to see.
Keeping an eye on your suppliers’ credit score will help to ensure you’re not left to pick up the pieces if a supplier goes into administration. Experian’s Single Company Credit Check, which allows you to purchase a one-off credit report, is a quick and easy way this can be done.
A good business credit score is also invaluable when it comes to making big company purchases such as new machinery or materials for a job. When you apply for trade credit, a good business credit score could give you more sway to negotiate better payment terms. As a result, this may help to eliminate the need for undue strain on your business by avoiding the high costs that often accompany such large purchases. Instead, you’ll often be able to spread these costs out, paying them back at a time that is more suitable for you.
However, as with many things in the construction sector, credit is a balancing act. In order for any business to get a credit score, it’ll need to use credit, but it’s all about using it responsibly, making sure debts are kept low, and repayments paid on time. Regularly checking your credit agreements and debts are the spirit level needed to make sure your business doesn’t reach tipping point, ensuring you’re not setting your business up for a fall.
In the end, once you’ve got the foundations right, there’s really nothing stopping your construction business from reaching the dizzy heights of success. All it takes is some careful planning, and tracking your business credit score, to make sure your business doesn’t topple.
Visit My Business Profile today to find out how it could help your business.