Welcome to the GSCSC, Inc. Website, and welcome to the GSCSC, Inc. Website Blog. In this week’s article, we will be discussing the topic of How To Survive In Business For The Long Haul. Many people come to us and ask us questions like: How can I run a business with the economy in its current state? Is there corporate credit still being issued? With the economy in its current state, how can I still obtain business funding? These questions of course are common questions, and there are answers for those truly seeking the truth about those very subjects. We have put together an article to help you answer these questions.
How to Survive in Business for the Long Haul
Small Business Administration statistics show that unless properly
capitalized, after five years only 20% of start-up firms are still in
business. Only four percent remain after 10 years. What is the secret to their long-term survival? GSCSC, Inc. has established thousands of start-up businesses and aged shelf companies for clients. Our in-depth and detailed research has found that our clients who have made it for the long-haul have done the following:
1. Have sufficient start-up capital or sufficient credit to survive the natural economic ups and downs that all business owners face.
2. Have a product or service that is needed during the various economic cycles that all business owners face.
3. Have trust, loyalty and credibility with their customers, and in addition, having the same respect granted to the business by its customers, along with gaining repeat customers for continued growth.
4. Have management that knows and follows the steps of the sales process, in addition to outstanding customer service.
Here are the steps to the sales process:
1. Establish Loyalty Rapport (trust & respect) – this step accounts for 40% of the sale with an existing or potential customer.
2. Find the need – this step accounts for 25% of the sale. (So, 65% is taken directly from the first two steps.)
3. Build value for your existing customers, agents, new customers, and suppliers. In other words, build value for yourself and your business.
4. Create desire for customers to make a genuine purchase from you without feeling guilty for doing it.
5. Overcome objections from customers. If a client says “NO”, do not get frustrated. There are thousands of potential clients out there, and some of the clients whom do say “NO”, may in fact come back to you in time. Don’t give up when someone says no.
6. Close the sale with your client in good terms, and with confidence. Don’t leave the client feeling empty when they hang up the phone. Don’t waste your time either. If the client asks too many questions over and over again, and you take too long rehashing the same answers, note that these are fishing clients. Be sure that you know the difference between fishing clients, compeditors, and those that are sincere clients.
7. Follow up with your clients. Before and after a sale is made, be sure to follow up with your clients. If you don’t do this, how can you build trust in your clients, and how can they build trust in you and your business. If clients do not return calls, don’t get frustrated. Keep trying. You need to be persistent.
In addition to reputation and integrity, customer trust and respect has much to do with how long your company has been in business. One manner in which you can quickly achieve instant longevity and easier access to bank capital is with a “Shelf Corporation.” A “Shelf Corporation,” (also known as an “Aged Corporation” or “Aged Company” when referring to an LLC) is a company that is already
formed, but not in use, and is ready for a new owner. There are many reasons that people acquire shelf corporations.
1. Instant availability & fast delivery.
2. Immediately own a company with a corporate history.
3. Show longevity and enhance your image with customers and lenders.
4. Easier to obtain business credit cards and business credit lines.
5. Often, lenders require a business to have been in existence from six months to two years or more before lending it money.
6. Increases the ability to borrow money from banks.
7. May increase ability to secure bids on government contracts. Many
government agencies will only sign contracts with a business that has been in business for at least two years.
The law says that a corporation is a legal “person” separate from its
owners. The age of the owners do not necessarily correspond with the age of the companies. When the H.J. Heinz Company advertises that it was established in 1869, it does not mean that all of the owners are well over 100 years old. It simply means that the company was filed in that year. You can also take advantage of similar credibility benefits when advertising to customers. The age of your company can give greater credibility to customers and lenders than a business that was recently established. So, acquiring companies with established credit and existing credit lines can give the business a big financial boost.
Why use or acquire an aged Corporation?
Aged corporations enable new owners to engage into business, credit, or real estate agreements as an established company without having to go through the entire process and waiting time frames of establishing a brand new corporation. Most potential creditors or business resources are hesitant to engage brand new or up-start corporations. By approaching them as an established corporation or company (the more years the corporation has been in existence, the better), the more likely your company will be taken seriously and this may grant your business more access to credit lines, banking relationships, leases, trade credit, etc. These banking relationships, agreements, Dun & Bradstreet-type rating systems, etc., should all be considered when looking at potential aged corporations. Additionally, it is of paramount importance that these shelf corporations are acquired from trusted sources that know the intricacies of weeding out those with potential built-in or existing liability.
Once you have properly selected your shelf corporation, it will in turn, enable you to establish an immediate history and instant credibility for your company and corporate image. In most instances, you will instantly be able to bid on state contracts (states generally have minimum longevity rules for companies that are allowed to bid on their contracts), obtain lines of credit easier and obtain loans from the Small Business Administration and attract potential investors more readily with an “established” corporation. It is also recommended that you inform the lender or contracting administration that you have acquired an aged company. Honesty with lenders and government agencies is essential if you are going to do business with them.
As is mentioned above, it is critically important that the shelf corporation you are considering not have any inherent or lingering liabilities. For the most part, this can be assured by looking into the history of the corporation or receiving a written, notarized, and dated guarantee signed from the seller that there are no pending liabilities.
There are times when very well established corporations get shelved, for a variety of reasons, and these can be inherently quite valuable due to their tenure or amount of time in existence. These can be carefully scrubbed for liabilities and exposure by qualified entities, and are in high demand, with the demand and their price increasing depending on how long they have been
established. Be sure that you are getting a clean company, and a written guarantee from the seller.
Simply put, if you are buying an aged corporation directly from its owners, there is a fair amount of due diligence involved: you should be concerned if the person or group selling the aged corporation has engaged in any transactions that may produce some type of future liability for the corporation or its stockholders. This may not always be easy to examine, and certainly requires some expert investigation. The best practices and best approach is to only acquire aged or shelf corporations from reputable providers (or resellers) who have a long history of successful transactions in this arena. These providers can be counted upon to provide indemnification to the purchaser (a written, notarized, dated and signed guarantee against pre-existing debts or liabilities) for the sale, and to conduct all of the due diligence for the client, prior to offering the shelf corporation for sale.
Shell Corporations
Often times Shelf or Aged Corporations are confused with Shell Corporations, both in terms of definition and their reason for existence. Shell corporations are completely different entities, both in terms of scope and formation.
A shell corporation is an incorporated company that does not have any significant assets or operational structure, but may serve as a clearing house for business transactions to separate the activities from another company. One such example, is building divisions of your front end company. In this way, if one division fails, you have two or more divisions to help you stay in business. There are some legitimate reasons for the existence of shell corporations such as liability protection and legal tax savings.
Summarizing Points
Surviving for the Long Haul
. Have enough money or business credit to last during the natural economic ups and downs.
. Be sure your offering is in demand regardless of the economic
conditions
. Have credibility with customers.
. Know and follow the sales process.
Shelf and Aged Corporation
* Saving time by having instant credibility and corporate longevity.
* Possible instant access to Federal and state contract bidding. Many agencies require that your company be in business for a specified minimum length of time.
* More attractive to potential investors and investment capital
* Faster and easier access to banking relationships and lines of
credit
Shelf and Aged Corporation Disadvantages and Caveats
* Pre-existing liability potential
* Pre-existing debt issues
* Pre-existing business transactions that may lead to future liability
* These issues can be resolved with an indemnification agreement.
To learn more or to order an aged shelf corporation, please visit
http://www.gscsc.net/business-credit.html
or call: (800) 922-5170 to speak with one of our friendly consultants.
Other Popular Services
Be sure to check out our other GSCSC, Inc. Website blog entries to view our other popular services. In addition, you can also click on the services or products links on the main home page of the GSCSC, Inc. website to see our other products and services.
