American Express has long been the option to choose for small businesses that need support and one on one attention from their credit card company. Features like their rewards program as well as the new PlumCard, give back to members instead of taking their money and increasing interest. Rosa Alfonso, Director of Public Affairs, American Express OPEN, sat down with us to talk about credit, debit and business growth.
Nolcha: What programs does Amex have to help the small business owner?
Rosa Alfaro: An entire division is dedicated to entrepreneurs and small businesses. They have different needs than consumers do (OPEN (the small business division) has about twenty four cards and services). Consumer Vs. Small Business owners is something American Express understands and studies. We recommend that they separate their financials from personal and business. Reason being, it makes things more clear for tax implications for their business!
N: What things do you advise business owners think about financially when running a business?
RA: Cash flow. The thing to live by, is to know how to measure your cash flow and know the causes of cash flow problems. A business owner needs to implement building strategies to maximize your cash flow. For instance, if “x” vendor pays me early, is it possible to give them a discount off of the total bill?” Prepare for the worst. Line up several sources of financing first. Grow smart. Know how to smooth out the bumps in your cash flow. Spend in a wise way. Really understand the difference between good debt and bad debt. How is the purchase going to add revenue to the bottom line of our company? If the answer is by a percentage greater than about ten percent then that is something you would want to add to your business.
N: What advice can you give new credit applicants to keep their credit in tact?
RA: You need to know what your weaknesses are as an entrepreneur. Then get someone to help with that weakness.
N: What makes American Express different than the average credit card or Bank Issued Credit/Debit?
RA: We have a whole division dedicated to really looking at an understanding small business and we are here to partner with them. We have the ability to actually look at your individual business and work with you to help figure out what is right for you. Think of us as a partner so we can help you through any situation whether it is growth or maintenance.
N: Realistically can a single designer, starting out in business start his/her first line with credit instead of investors and/or business partners and be able to keep his head above water in the first year?
RA: We are responsible lenders. We do not promote the idea that anyone should start their business on credit cards alone. We think it would be an arsenal of things lined up. It goes back to the “hope for the best and prepare for the worst” idea. For long-term investments, it is not the most prudent use for to put it on your credit card. A company would be better to take out a bank loan for something like that. It is just as dangerous get a lot of business and not be ready for it, as much as it is not to have any business coming in at all. Be prepared for all scenarios.
N: You said you work one on one with small business owners. How is that achieved?
RA: We have a partnership with Score. SCORE offers individual counsel with professional experts in the industry. To evolve that program we introduced a “Small Business Speed Coaching Test Drive” which allows a business to have a thirty minute one-on-one evaluation session with experienced business coaches. SCORE’s counselors are a bunch of retired entrepreneurs that can help give advice of growing the business. Not everyone can afford a lawyer and accountant in the beginning and this is a great resource.
Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u.
Entrepreneur Interview