From the July 1997 issue of Entrepreneur

Credit services firm Dun & Bradstreet Corp. and Columbia, Maryland-based computer software company Credit Management Solutions Inc. (CMSI) have joined forces to create an online credit- scoring program designed to assess the creditworthiness of firms with 10 or fewer employees. The new service, called OneScore, may help you get a quicker reply to your loan application or help you find out whether potential customers are likely to pay their bills on time.

In business, credit assessments are typically made by looking at a company's financial data. However, with smaller firms, the decisions are often based solely on an analysis of the company principal, says Scott Freiman of CMSI. OneScore combines both business and personal credit data in one report, making it less time-consuming to obtain information. "OneScore gives a much more accurate picture of a small business,' says Freiman. For more information, call (800) 234-3867.

Make No Mistake

The three biggest tax mistakes small-business owners make have one thing in common: They can cost you money and, ultimately, maybe even your company.

According to San Francisco tax attorney Fred Daily, the worst mistakes small firms make are failing to keep good tax records, not making payroll tax payments, and not taking advantage of retirement plans. Daily addresses these issues in his new book, Tax Savvy for Small Business (Nolo Press), which is geared toward businesses with 10 or fewer employees.

"Not keeping good tax records can hurt in a couple of ways," explains Daily. "First, you may miss valuable deductions, and second, you may not be able to prove business deductions." What constitutes good records depends on the business, he adds, but could include keeping a detailed log of the business usage of your car or making sure you do a year-end inventory.

And don't forget to submit payroll taxes, warns Daily. The IRS views not doing so as illegally borrowing from Uncle Sam. "Not only are there criminal implications, but you can also be heavily fined, and the IRS will not be lenient,' says Daily. The best way to solve this problem, if you have more than a few employees, is to use a payroll service.

As for retirement plans, says Daily, "The small-business owner who doesn't have a retirement or tax-deferred plan or doesn't contribute fully to one is making a big mistake. You get an immediate tax benefit for contributing to such a plan. Where else can you get an immediate 28 percent return on your money by contributing just $1?'

Stocking Up

That's faster than calling your local banker for a loan and cheaper than hiring a full-service stockbroker to market shares in your company? Thanks to a Securities and Exchange Commission (SEC) rule change, no-load stocks are the correct answer.

No-load stocks are shares sold directly to the public by the issuing company. "Prior to 1994, it took eight to 24 months for a company to get approval from the SEC to offer no-load stocks," says Charles Carlson, author of the recently published book No-Load Stocks (McGraw-Hill) and editor of the DRIP Investor Newsletter, which covers dividend reinvestment plans. "Now an SEC-created model or blueprint helps implement no-load stock programs that a firm can have up and running in two months."

A growing number of companies are using this option as a competitive tool for raising money and marketing their goods and services. "If I can turn you into a shareholder, you are more likely to buy from me than from my competitors," explains Carlson. "It's much cheaper than hiring an investment banker, and it's a good way to cement relationships with customers and suppliers.'

According to Carlson, the advantage of buying stocks directly from a company is that they can be purchased for little or no fee. In addition, a number of corporations sell their no-load stocks at a 3 percent to 5 percent discount off market prices.

Entrepreneurs who own publicly traded companies and want to explore the option of selling stock directly should call the SEC's office of chief counsel for market regulation at (202) 942-0073 and ask about the Direct Registration System.