Dun and Bradstreet

Hello, and welcome to this module, Dun and Bradstreet. So this is going to be really, really important because I’m going to show you step-by-step how to create this, get this set up and have this taken care of it and then just module. So here’s what we’re going to cover. So the first thing I’m going to break down is what is a DUNS number. I’m also going to get into why you need a DUNS number while building business credit, the D&B, or Dun and Bradstreet Paydex Score and a little bit more detail. I’m going to also give you some additional information on how the Paydex score is calculated and then Dun and Bradstreet reports and how to access them. So Dun and Bradstreet. Why is this important? So like I was saying before, this is the 800 pound gorilla when it comes to business credit reporting and we need to have this set up.

So what is a DUNS number? So a DUNS number stands for a data universal number system, and it’s a nine digit number unique to your company, identifier used to track your business’ credit report and credit record, which will include credit ratings, payment history, even legal judgements, and proceedings. So potential investors, money lenders, and any other business considering dealing with your company can see your level of reliability, trustworthiness, financial stability in likelihood to pay your debts. That’s why obtaining a DUNS number is a first step in establishing a live business entity or a credit optimize company. So we’ve done all those other things.

So that way now, when we do go to apply for Dun and Bradstreet, we have the legitimacy of a actual real business. Okay. So why do we need a DUNS number? So you can think of your DUNS number as your corporate social security number that’s going to serve basically the same purpose without requiring you to use your personal credit history so different than your EIN number. So your EIN number is really tied to the IRS, but your DUNS number is tied to your actual corporation or your corporate credit file. So the main reason why we use DUNS numbers to establish corporate credit reports with D&B or Dun and Bradstreet, there are also some other businesses that use, such things, to work with like your apple development program. So even when I was setting up the app for MyMoneyEDU, I had to use my DUNS number in order to even set up an apple developer program. Then there’s other situations where you will need a DUNS number to get government contracts. So no matter how large or small your business is, you are going to need a DUNS number.

So that’s why we need one. And that’s what a DUNS number is going to do. So after you receive a DUNS number, the Dun & Bradstreet system’s going to analyze your credit accounts and generate what’s called a Paydex score. So like I was covering before the Paydex score is essentially the credit score used by Dun & Bradstreet. And it’s a unique dollar weighted numerical indicator of how a firm or business pays his bills over the past years, based on trade experiences, report it to Dun & Bradstreet by various vendors and companies. So it’s going to measure your payment history. Like I said before, between one to 100 and higher scores indicating the more reliable payment performance. So your Paydex score, can influence lender perceptions about your payment history, which is huge. And also to determine whether or not you’re a stable business that pays their bills on time and or if they not going to get their money back.

So this is huge. So it can also affect the terms of a lending contract that any business offers you and the better your Paydex score, the better the contracts and or the terms or the interest rates or whatever it is that you’re trying to get when it comes from a lender perspective is going to be, so that way you can have more leverage, so to speak or financial leverage for your business. So essentially the Paydex score is huge, so important. So unlike your FICO score, like I said before, for your personal credit score, this score is purely a measure of your company’s payment history and whether it pays his bills on time. So there are other components like utilization, credit length, length of history, the number of inquiries, credit mix, and the amount of new credit. i.e They’re not necessarily calculated into the Dun & Bradstreet Paydex score because the Dun and Bradstreet report shows these things so that lenders can see them, but they’re not calculated a part of the actual Paydex score.

So what am I saying? I’m saying that you can have all these other things and it necessarily not affect your Paydex score one way or the other. So you can have high utilization, but you can still have a high Paydex score. So it’s still important i.e that even if you have a high Paydex score, you’re keeping a handle on utilization because although your utilization doesn’t report, when you’re going the business credit card on your personal credit, it will report on your business credit report. And that, that will show high utilization. So when you look at the scoring formula, like I was saying before, it’s dollar weighted average, so more weight is given to larger payments and smart payments. So, when we look at this, just even from an actual scoring, 100 means I’m paying my payment comes 30 days before the term.

So that’s what we want to be. And then zero to 19 says, I’m over four months late. So we don’t want to be over four months late. And like I said before, it’s so important to have a high-income skill set or a scalable business and be producing cashflow. So that way we can make sure we’re paying our bills on time, because our credit means is credibility even on the corporate credit side. So when we look at our Dun and Bradstreet reports, the following information is going to be found on here about your business. So, number one, your Paydex score, a full payment history on each account that you’ve established, any amount that you owe on that particular account, if any, or if it’s a zero balance payments made towards that account, the credit limit on that account, and then the amounts past due, which we’re not going to have any past due accounts because cashflow cashflow, cashflow is important than any type of credit terms for that particular lender or vendor that was agreed upon.

So these are the main things that’s going to cover on your Dun and Bradstreet report. Now also, we’re going to have the date of the last reporting, any type of company information to include number of employees, office square footage, you also going to have any type of current assets, should the business have any, any current liability, should the business have any, working capital associated with this particular business, company net worth and also sales and profit and loss statement. So all of this stuff is going to be included on the Dun and Bradstreet profile. So, and then any other company details. So unlike personal credit or very similar to personal credit, but unlike it, it’s going to really get into the nitty gritty because you’re, when you start creating a company, it really becomes public information. Okay? So this information will be included on the Dun and Bradstreet profile.

So a little bit more on the payment terms. So there’s something called a SER. So it is supplier evaluation risk rating, and really what this is going to do is predict the likelihood that your company will file for bankruptcy within the next 12 months. And essentially your SER rating is going to score between one and nine one being the lowest risk and basically the best and nine being the highest risk, which is the worst we want to stay away from nine. And then also it’s going to have a supplier stability indicator or SSI specifically in the business side. And this is going to predict the likelihood that your supplier will encounter a large and or significant or operational stress over the next 90 days. So SSI score is going to range between zero to 10, with zero being lowest and 10 being the worst.

So this is again, another specific piece of information. That’s going to be important for you to understand with your Dun & Bradstreet. So the first thing you want to do when it comes to getting the Dun and Bradstreet number is you want to search for your company on the D&B website. Okay. So if you’re establishing, if you do not have a Dun and Bradstreet number, and you’re establishing one right now for an existing company, you, you first want to research or search your name on the Dun and Bradstreet database to see if you already have one. So you can do this by going to the Dun and Bradstreet homepage. And then, if your company appears there, then you already have a DUNS number. You can skip this step and following with the company, update links on your profile. So really quickly, right below this video, I’ll show you how to do this.

So right here, you see where you can say, Hey, look, get a Dun and Bradstreet’s number. This is free for the first 30 days, you would essentially click this link and then you would select, you know, I am a US business, and then you can type in the information to get an actual DUNS number. But essentially if you’re trying to search, if your business already has a Dun and Bradstreet number, you can search right here and then you can type your company’s name. So I’m going to type in one of my companies right here and just hit search. And then, you can see that this actually does have a, a Dun and Bradstreet number, and this is one of my holding companies and notice I have consulting services. So that’s what you would do right there. Just go right here, search for your Dun and Bradstreet number.

Okay. So let me get back over to this. We covered that now, to attain a DUNS number, like I was just showing you, what you’ll do is you, there’s two ways you can do this. So number one, you can attain a DUNS number using the DUNS number tab on the website. Like I just share, or you can go to that link that I just clicked on below the video, and then you can apply for a DUNS number. So there is a waiting period while D&B is going to verify the information before they issue the number. So typically it’s between 15 and 30 days, and we’ve seen it take longer, but often it’s less, especially if you call in. Now, if you, if you’re able to register, or if you decide to register your business as a US government contract, or you’re saying at some point in the future, you may potentially get a government contract, then you may be able to receive a business number in one or two days. Now, this is what I did initially by default. And then I figured that out, and then I’m providing this information with you. So it’s very important that when you are applying for a DUNS number that you include, these additional tips, I’m getting ready to cover. So right now, what I’m showing you is how to get a DUNS number for free. Alright. So right below this video, you get again. So if you want to apply the normal way, you would click on this link and, let me go over here. And I’m just going to click on it really quickly. So you click on this link and you essentially will be applying for a DUNS number. And you’re just going to select that, you know, you’re probably a US business, and then you’re going to put your business name, address, and what this is doing is applying for a free DUNS number.

So follow all the prompts and include some specific information. Now, before you do this, finish the rest of this video module that I’m going to cover, but this will be applying for a DUNS number on the free side. Number one, it’s going to take 15 to 30 days. Now, if you click on the fed.gov.dnb this again, is going to give you a free DUNS number, but it’s assuming you’re going to do a government contract in the United States of America. And it can take anywhere between 48 hours to get the DUNS number. And you can, you would just go through this process to get a DUNS number right there. Okay. So those are the links I’m covering right here in the slide of both of those options. Number one is going to be both of these options are free, is just one takes 15 to 30 days.

And the other takes 48 hours assuming you do government contracts. Now, it’s very, very important that whichever option you choose, whether it’s the 15 and 30 day option, the normal option, or you do the government contracting when you’re applying for a second and third tier and even fourth tier credit, most lenders are going to look to see the size of your company. Okay? So remember appearing to be a large organization is the key to developing a strong corporate credit file. So you want to make sure you look like a major corporation, not just a one or two man show, and the way you want to do this is you need to, you know, you essentially want to massage or put the numbers on your credit profile for Dun and Bradstreet for appearance’s sake. And again, you want to understand what lenders are looking for, and I’m going to cover that right now.

So number one, employee account, this is really important. So, for second-tier credit lenders, they want to see, you know, and I’ll just explain this way. Lenders often set a dividing line. They use to see if your company is running a mom and pops organization, or a company that has five employees or more so essentially if your company has five or fewer employees, they often require a personal guarantee or a social security number. If your company has six employees or more generally speaking, generally speaking, it’s not going to require an SSN or personal guarantee is going to be required. So this is a huge one. I wish I knew this when I first started this process. So number one, the way we get around that. So when we look at this is we want to have employee count. So, for your third tier credit cards and fourth tier, and if you don’t understand what I’m breaking down, when it comes to Tier accounts, not to worry after we’ve set up our business credit reports, I’m going to get into creating the tier accounts.

So the best way to be honest, and even though you’re a one man show or one woman show is to hire 20 different freelancers on Fiverr or different websites where you can have them complete specific tasks for your business. So you can just have them do if you hire five, if you hire 20 contractors on Fiverr for 20 bucks that are cost you about a hundred bucks, and you’re going to need to, you probably have already hired these contractors to build your website, build your logo and do other specific tasks like the online business listings. Those are three contractors right there, and then you can just have them do other jobs. So whether you have full-time employees or you need to hire a part-time employees from, from time to time, they’re all going to be conceivably in that count. So this is one way to show that you’re a larger corporation because you’ve done business with, or you’ve had people do specific jobs for your business.

So we want to think creatively in, and look at how we can get, for appearance’s sake, the many amount, the most amount of employees to show. So, Fiverr is a, is a really simple way to do it and outsource those tasks. But you know, how many different, if you have maids, janitors, any type of employees that are part-time in any calendar year, you have maintenance staff, you have gardeners. Do you have temporary assistance? Do you have people who wash your car? Does your accounting, answers your phones, built your website, maintains it, who stuffs your envelope? So essentially what I’m trying to help you understand is just think about all those things that you’re happening, or you have going on and just consider them to be a contractor for your business. If you’re using them to do some type of service for you in the business’s name, it can be viewed as a contractor.

So essentially the reason why employee counts, a lot is because, I really want you to be able to figure out if you can justify it, you know, more people who have done some type of work for you or your business. So nobody’s going to come knocking on your door at any point to figure out, do you have all these people? And there’s no way a lender is going to be able to verify the head count other than what they’re going to match on the credit application with the Dun and Bradstreet profile. So that’s why we’re setting this profile up on the front end. So we want to make sure we have this. Now, if you’re able to justify a listing between 11, 12, or 20 or more employees, that’s the right answer for every new company. We’ve been able to set up to get a credit optimize company.

So we’ve noticed that 12 employees from the start and that number provided to Dun and Bradstreet is a solid number to have on your employee, count with your company, and you can easily get those employees there, or view to work for your company using those, those resources or that creative thinking I was just covering. So here’s another tip. That’s really, really important about revenue. So similarly to the, you know, to the level of employees, there’s two levels of company revenue that make a difference and answers on your Dun and Bradstreet profile, a one and 2 million. If your company does over a million dollars in annual revenue, it’s a credit optimized. It gets past the need for personal guarantees on credit application. If it does over 2 million, it’s eligible for even better offers without a guarantor. Okay? So this is huge. Now what I’ve found is that $2 million for many startup companies may be a stretch, but we’ve also managed to justify something like 1.2 million in annual revenue.

And also basically saying, you know, basically making it appear to be anticipated revenue, because then sometimes you can say, look, we’re projecting to do $1.2 million, and you can still be a startup as long as you’re projecting to do that with your marketing plan or, or your particular scenario. I am a full I’m a, 1000% testimonial that marketing does help grow your business. When done correctly, marketing is literally how I have grown MyMoneyEDU. So essentially what I’m trying to communicate to you is you can put down that 1.2 million as projected revenue along with those employee cases. And you should be good to go when it comes to that. So that’s another little tidbit. Now, here’s another one, another one that’s really, really important. And, and again, I wish I knew this when we’re filling out the Dun and Bradstreet application is square footage for your company.

Okay? So, an automatic red flag to the Dun and Bradstreet is going to be, Hey, look, is your size of your office. So it’s important to answer these questions for it to make sense. So if you give it, which is going to be my recommendation of 12 employees, but you only have a 400 square foot office, that’s going to be a huge red flag. So a company with 12 employees is generally going to have, you know, so a company with 12 employees and 10,000 square foot office, makes a little bit more sense with your business profile. So this small little thing is gonna make a difference. So when we’re looking at our Dun and Bradstreet profile, my recommendation is, you know, with the number of what the right number of employees, the right number of revenue, and having all of this stuff in place with the right footage, you need to think about their square footage per employee, and your answers should fall in line with the standards that lenders are well aware of without creating to avoid creating or without creating a red flag.

So this is take into account that the average employee, let’s say you have 12 of them, but the average employee has 125 to 225 square feet and I found this on officefinder.com. So if we’re taking this to account your entryway, your corner office, or storage room, the cubicles, a company of 12 employees would typically need about 1500 to 2,700 square feet of office space on the low end. So, here’s a more specific list from a different source about, you know, I got this from about.com and it’s basically saying, Hey, look, this is a typical ideal requirement for these different employees. So you have the president, which would be, you would just assume your square footage of your office would be 400 square feet, vice-president 200 square feet, managers 150 square feet, secretaries 125, customer service reps 125, accountants 150, programmers 125.

So you’re looking at it from this perspective, this gives you like a high level overview of the square footage. So engineers 175, data industry 125, clerks 125, temporary employees a hundred square foot, reception area a hundred square feet, conference room 50 square feet, mailing room 125 square feet, and then work room 125. So these are just estimates from about.com from specific websites, in the file room 200 square feet, and then storage room 200 square feet. So this gives you like a rough estimate in terms of what to consider, what your square feet, lunch break room 75 square feet, and then any other special specialty areas are going to vary in size. But this has given you that square footage to consider. So, you know, again, you, you want it to be at least 1500 square feet to 2,700 square feet, put that on your application.

And then just assume based off these square footage, how many employees you would have. And again, don’t over complicate this, just use a general rule of thumb in terms of 12 employees, 12 times 125 average square footage would be, let me do a calculator real quick, Google, let me see. I’m on my other screen doing this Google calculator, 12 times 125, 12 times 125 equals 1500 square feet. So that’s going to be on the low end. So number four years in business. Now this is a biggie as well. So there’s no magic number for your Dun and Bradstreet number. I mean, your Dun and Bradstreet profile, but the minimum of two years is just the right number. But if your business isn’t two years old, not to worry. So some, some lenders are looking for this, but it’s a major milestone if your business has been, been around for at least two years in the name, in the eyes of creditors.

So most companies, two years, most companies fail within two years. So any company that makes it beyond two years appears to be a better credit mix. So two years is basically the number widely used to qualify for companies, but it doesn’t mean you can’t qualify if you’re not two years, you know, two years older or not. So, when we’re looking at revolving credit lines, loans, it’s also used to determine that the company is gonna provide a personal guarantee or not. So again, if you’re gonna, this is why personal credit is so important. So even it’s not two years, not to worry. You may have to personal guarantee, but once you’ve been over that two year mark, you’re good to go. Now, initially, Dun and Bradstreet is going to use your incorporation date unless you provide different data, which they may sometimes accommodate, or sometimes ignore in your favor with the corporation days.

So it’s worth trying to show two years of company operations, but just stating that your company has been in business in two years, won’t work. So essentially if your company hasn’t been incorporated for two years, which most of your companies won’t, do not lie. Okay. So they’re going to provide and look at this information, to determine if your incorporation date and the date, your business bank account has been open. So again, this is another one. So if you let’s just say you have a business banking account and your business banking account was formed when you were just a sole proprietorship and that business banking relationship, is older and you have a new business entity. Well, you could, in some scenario say I was, I transitioned this business sole proprietorship, two years ago, and then they can use that potentially as your business start date, assuming you had a sole proprietorship bank account and you transitioned from sole proprietorship to a new entity, and then we’ll use that as in this example, you can use that, that account history, but if it’s not just start as a brand new business and you’ve been operating as that new business moving forward, and then you’ll be good to go, okay.

So if you don’t have an existing corporation or a DBA with an established bank account, you will still need to be able to develop a strong credit profile. I’m just giving you another little hack that you can do. So your company won’t be eligible for cash credit for a couple of years, but you can still have ever become qualified even in that time with a newly established business. And don’t worry, I’ll cover what cash credit is. So this is just another, a last little thing, a last little tidbit to kind of give you when you’re considering your Dun and Bradstreet. You also want to answer all calls from Dun and Bradstreet. So D&B salespeople will start calling you about important information that’s going to affect your credit profile. Take these calls. All right, they are going to be sales calls and their sales team is going to try to get you on their creditbuilder and or other programs.

And remember, creditbuilder is something I’m getting ready to cover. It’s totally optional. Okay. So if you weren’t going through a course like mine’s, I would say take the calls, but you know, but I don’t want you to dodge the calls because some Dun and Bradstreet information salespeople can be helped very helpful in verifying the information and making your notes on your credit file to give you greater weight to lenders. So again, take the calls from the Dun and Bradstreet salespeople. It’s totally fine. So also when you input information, when they, when you input information, the file notes will show the information came from an action of adding it when Dun and Bradstreet employee updates your credit file for you is a third-party verification will look, it looks better to lenders. So the more information you can get them to verify about you is also, it’s optional, its totally optional, free to register for their Dun and Bradstreet creditbuilder program.

So this is going to be the service that they’re going to try to get you to enroll in. And it’s only a it’s a it’s a monthly fee of $149, and there’s no minimum subscription term presently, but I would recommend you keep it for three months. And if you do the first option, I was breaking down with a Dun and Bradstreet that takes 15 to 30 days. You can get the credit builder program and you’ll get it probably in about a week. And again, this is totally optional and I’ve included the link right below this video to explain how that credit builder profile works.

Now, one thing to be clear is that that creditbuilder profile is not going to make sure the link is working, but that credit builder profile is not going to build up a tradeline. Okay. So you just need to understand, it’s just going to give you an enhanced version of their website, enhanced version of the credit reporting files that they have, but it’s not going to build up a tradeline, which is really what we want. Alright. So, again, this is totally optional. You don’t have to sign up for it, but you would the next steps for you to take immediate action, get your DUNS number and do all these things. And I will see you in the next module.