A lot of business owners aim too high starting right out of the gate. They’re too busy looking at bank loans while turning up their nose at beginner credit through vendors, or what I call “baby credit”.

But what if I told you that I built a 6-figure business using vendor credit — and you absolutely can, too!

What you’ll gain from this article:

• My secret method for using beginner business credit to free up cash flow
• How to use business credit at any level to generate revenue
• My top revenue-generating activities to ensure I’m always able to get a return on investment in my business
  

Let’s learn!

What is Baby Credit?

A lot of people don’t go after this credit because they just want the money. But let me tell you, this type of credit is sexy — better than cash.

Vendor credit is easy to get, especially for new businesses that don’t have a credit profile and won’t qualify for a credit card or traditional financing.  Vendors usually work on net 30, 60, or 90-day terms, which let you make a series of payments.

Vendor credit is how you start building your business credit profile. This is credit you can only use with the company that is issuing the credit. So for example, if you have a retail store and one of your distributors offers you a line of credit, you’d be using vendor credit.

My Expense Shifting Strategy Using Baby Credit

Every business owner has to think smartly about where you invest money in your business. One strategy I use is ‘expense shifting’, where you shuffle how you pay for different expenses.

Vendors that offer vendor credit are usually services that every business needs and uses. We’re talking about industrial suppliers like Uline, office supplies like Quill, promotional goods from pens.com, or even service providers like digital marketers. They’re all in this baby credit category.

Any type of business can use vendor credit: service-based businesses, life coaches, or any business that doesn’t sell tangible goods.

Suddenly, companies like Quill and Uline and pens.com become sexier. At least, when it comes to building your business credit.

If you need $1000 this month in your business, look at your expenses to see where you can free up $1000. Some of those expenses will roll over to credit so you can use your cash to invest in revenue-generating activities.

I personally did this exercise to free up $800-$1000 a month on stuff I was already spending money on, and it helped me build a 6-figure business.

I made a list of all the things I needed: marketing, a coach, building up my funnel, promotional tools, etc. For some of these things, I could go directly to the vendor to get (and use vendor credit). But for the stuff I couldn’t get credit for, I could look at other things I was purchasing and put those on credit, keep the cash, and use the cash to invest in my business.

My Shortcut to Using Baby Credit

“But Kendra, I don’t spend a lot on my business each month. I can’t find anything to shift.”

That may be true. But I bet you spend some money in your house, right? Leave nothing on the table and no stone unturned.

I did this with my first real Facebook ad campaign. It cost me $400 to promote the Adamant 11,000. I used $400 in business credit for other stuff in my house I was going to spend money on, then spent the $400 in cash on Facebook ads. Then, I could use my return on investment to repay the $400 plus I’d have that extra revenue.

Knowing how your business makes money is key to using expense shifting. I use expense shifting on revenue-generating activities. I had a plan to make back that $400 on Facebook ads.

So, look at what you’re already spending money on: soap, paper towels, feminine products, potato chips, Gatorade, coffee, paper, toilet paper, anything that you could order from a vendor that you would typically buy anyway from another store.

My first vendor account was Quill.com. Coffee is life at my house, and I realized that coffee was something I could shift over to Quill. Toilet paper, too: We weren’t part of the great toilet paper hoard in 2020 but we weren’t hurting for it either because I was ordering it from Quill. I’ve had Granger deliver an entire pallet of bottled water to my house. My Target and Walmart runs are shifting to vendors that will let me use business credit so that I have more cash freed up to invest in my revenue-generating activities.

I look at revenue-generating activities as anything that’s going to infuse cash back into my business in a short amount of time. For example, imagine getting off the phone with a potential high-ticket client and they receive a gift box from you within the next day. Don’t you think the likelihood of closing a deal with that person is going to be a little higher? You need the cash to do this, but that gift is an investment in your business and has a high chance of delivering an ROI in a very short timeframe.

Facebook ads, speaking events, marketing for a new course or product, anything that’s going to bring in revenue is a great way to spend your cash that you free up with vendor credit. Not only will that revenue help you repay your credit, but you’re also building up your business credit score.

Making Baby Credit Expense Shifting Work For You

This strategy takes a little practice so that you can be ready for when you do get a big cash infusion. You need a plan for that money when it comes. Know the best place to invest it before you get it so you can get the best ROI for that investment.

This is how you make baby credit sexy. Don’t believe the hype that you need $50,000 here or $100,000 here. Multimillion-dollar businesses have been built without being funded at all.

Make sure you check out the full video breakdown of how to make vendor credit sexy on the F500 Fierce YouTube Channel.