Most Founders Never Learn About This: The Credit Play That Leads To Self-Funded Growth with Sue Schuster

Most founders are building their businesses on personal credit. This episode shows you how to flip that and fund growth the smart way.

📌What’s Covered in This Episode:

• The truth about “business credit” your bank won’t tell you, and what actually builds real corporate credit.
• Why pivoting too often can destroy your brand before it ever takes off.
• The surprising link between your EIN number and your business’s borrowing power.
• How to separate your business finances from your personal life (and finally sleep at night).
• When taking on debt is the smartest move you’ll ever make as an entrepreneur.

Sue Schuster is a Corporate Credit and Profit Acceleration Coach who helps small business owners access funding, grow sustainably, and protect their personal credit. With 20+ years as a business owner, Sue built and sold a successful swim school. 

🌐Learn more about Sue https://sschuster.profitturing.ai/

🤝Connect with Sue LinkedIn 

🚀The Founder’s Voice Quiz is the foundation for a client attraction system that works with your strengths, not against them. 

💛Share with a friend who would enjoy this conversation.

Thank you for listening in! See you next week.

Transcript

[00:00:00] People think they have corporate credit. Their bank told them they have it. Their credit card told them they have it. They have a nice old credit card with their logo or their name on it, and they think that is building corporate credit. And the problem is it's not. It's not like personal credit where you just do the right things.

You get your mortgage and you pay it off. Business credit isn't that way. I'm a little bit debt averse, but I know if I look at my company and go, if I had a hundred thousand dollars. How would that accelerate my growth? But as the business owner, you're head down and you're just trying not to drown. They could have more leverage and more time to breathe and more fun in their business.

Priscilla: Welcome to The Entrepreneur's Kitchen. Today I've got a very exciting guest for you. I've got Sue [00:01:00]Schuster, and she's a corporate credit and profit acceleration coach who helps small business owners access funding grow sustainably and protect their personal credit. She empowers the main Street entrepreneur with the financial tools that Wall Street has been using for years.

Very exciting. Sue, I'm so glad to have you here. Please let us know who you are and what's your mission.

Sue P. Schuster: Sure. I am Sue Schuster, and I was a small business owner for 20 years before I got into this field, and that is my mission, is to teach all these small business owners what I didn't know. And now I know and I'm annoyed. I know. Because I didn't know. The mission, is to teach them about what the heck corporate credit is.

How do you really get lending and what other kind of little things are out there to get you tax credits and all kinds of money back in your pocket because you took the leap to be a business owner and you should get the great things that come with it. 'cause you already have the headaches that come with [00:02:00] it.

Priscilla: Oh, for sure. There's so much. Mystery or not knowing around, funding capital. And yet those are the big things and we often think we can solve those issues with other things, but it typically doesn't work that way. I know you were a competitive athlete, tell us your backstory.

Sue P. Schuster: Sure. Athlete, since I was a knee high to a grasshopper, I had two older brothers and anything they could do as the female and the youngest, I could do better. It just, the attitude I had starting at, I don't know, four, three years old, doesn't matter. And I got hell into sports and that taught me a lot about discipline and about going for your goals and goal setting and everything.

I'm a huge advocate of sport. It doesn't matter the sport, it's not even the sport itself. It what teaches you, and especially as a female, you're probably not especially my age group, you were not going pro in anything. Now, the females, they do have a chance to go pro in some things, but still not like the guys do.

So it wasn't even a. [00:03:00] Thought that I was gonna go pro in sport, it's, I'm gonna go pro in something else and I'm going to use the sport background to give me the drive and the knowledge and the discipline to go ahead and go for that. So I did play field hockey half of the US doesn't even know what field hockey is, and that's okay.

It's like soccer with a stick if you don't know. And . It's not ice hockey. It's different and then I went into teaching and I was a PE teacher for a while and I'm like, this is not my calling. And then we started the swim school, which I took all my athletic background and my knowledge that I was learning and went to the school.

A hard knocks for 20 years and learned about finance, learned about lending, but also learned about just dealing with other people, HR marketing. Your books. That is first thing you give away as your bookkeeper and everything else. Taxes, all the things. So we grew from 600 kids a week to almost 2000 kids a week, and I sold that business in 2022.

[00:04:00] Made my way into the financial industry thinking that would be fun. But that wasn't very much fun because they have a ton of rules. And although rules are good, especially when you're dealing with other people's money, that's fantastic. They weren't for me. And then I made my way into coaching and through coaching I learned about corporate credit, which I had no idea about and nobody ever told me about, and I never even heard the words.

And I learned about other ways that lending can help your business. Besides, I'm gonna go to the bank I know and get an SBA loan because that's. Pretty much all small business owners know, and that's what they're told to do, and that's often not the best strategy.

Priscilla: So much there. I'm gonna take you a little bit back to, the swim school for entrepreneurs who are building something, maybe if there are pivotal moments in that business that you could share that really either helped it take off or things that you realize were really big moments in you building that business over the 20 years.

Sue P. Schuster: For sure. The biggest one, and I'm [00:05:00] gonna talk to all the moms out there who are trying to do all the things. Be a mom, great mom, and a great business owner. There was one point where I literally got kicked out of a conference because I had my 2-year-old with me and I got kicked outta the conference, and now back in the hotel room going, what the heck am I doing?

How am I gonna be a ? Business owner, a mom, and do all the things very well. And at that moment right there, and looking at my 2-year-old, who's, by the way now in her twenties and doing fantastic in her little life, but just really reflecting in that moment, going, I can do this, , they might have kicked me outta the conference, but, oh I still can be a fantastic business owner.

The other thing of course, was COVID. Because that's a word that we'd all like to take out of our vocabulary, but COVID taught me more how to pivot more, how to be creative more to trust my instincts and really be the business that I wanted to be and not try to change every time the CDC said something different

And that could be [00:06:00] your competitors or your in-laws or somebody else telling you that you should do your business differently rather than the government, but just sticking to your guns. So those are two definitely pivotal moments that I was like reevaluating the world at that time, whether it's just me being a mom or me being in COVID, , that made me refocus

definitely hard, but good.

Priscilla: I love that you were in that business for 20 years. Sometimes for early entrepreneurs , we're constantly chasing the next thing or the thing that looks exciting

Sue P. Schuster: , yeah, shiny things are fun until they don't really fit in your business plan. So we really, knew our bread and butter were lessons, but we had other stuff. We had lifeguard classes, we had inventory, , the birthday parties stuff, other stuff.

And then when somebody would want to sell Avon at our place we got lots of kids and lots of stuff. Maybe that's a good thing. But I learned the shiny stuff is never where you put your real intentions. So if you're looking at your books, and everybody should know their books, everybody. If you don't know your books, you don't know your [00:07:00]business.

So if you're looking at your books and you're like, 80, 90% of my revenue is coming from this, whatever this is, for us, it was swim lessons, and that's where you put 80, 90% of your energy. You don't wanna put it into other things, the shiny things. And whenever you pivot. And I find this a lot in the coaching community.

Something isn't working or it's not working fast enough and they pivot to something else. So they were doing mindset coaching, but now they're doing breath work or something else. And then the more you pivot and the more you change your offer and what you're doing, the more it gets muddled and people don't know what you do.

A confused mind says no. So if they're confused on what the heck you do, they can't refer you anybody and they can't take advantage of your business. The more you change and the less continuity and consistency you have, the more confusing you are and the harder for people to engage and take advantage of what you have to offer.

Priscilla: that's such a key one. I do see that a lot. One minute someone is doing this and then you get the sense they figure that's not [00:08:00] working now they're doing this. And you never get to be known for something like you said. , The reason people do that is because.

Especially when you're new to something, you don't have an idea of how long you should, persist with something before you get the momentum and the traction that you're after. And so you think, I don't know, everyone's got the random timelines of, oh, surely this must mean this does not work.

And I'm interested to know from your experience.

Sue P. Schuster: That happens all the time, , it's when you run out of a runway, if you are not making any money, but now you're out of money, oh crap, I need to feed my family. What do I do now? I can't continue to do this because it's not working. But you never know when that click that graph or whatever it just takes off.

You don't know where that's gonna be, and it's. Honestly different for everybody. So if you're coming to a new something, for me, coaching was new. I made a ton of mistakes in the first several months. I'm still making mistakes, but that was very new. So [00:09:00] I actually pivoted and changed a lot within that time because I honestly did not know where I was comfortable and my seat was.

So that's understandable. So now I've kinda found out that lending and corporate credit are where I am. I'm not fractional CFO. I'm not a mindset coach. I'm not a. Executive coach. So all those things I kinda started with, I'm like, oh, I can do that. And then I found out that's not a thing. So if you come in with more knowledge and more direction and probably more homework on the front end as this is really where my seat is where I want to be, then you'll get there faster.

But if you flounder in the beginning like I did, like most of us do it's just gonna take you longer to get there. I gave myself a year. I said if this is not working in a year, then I'm gonna make a major pivot and probably go back to some sort of non entrepreneurial something. Although I probably won't stay there very long.

I'd probably go back to entrepreneur 'cause that's where my heart is. But [00:10:00] that's how long I get myself is a year.

Priscilla: thanks for sharing that. I'm wondering, Sue, so you start the swim school and at what point is one? This, getting clients, this becoming profitable, this showing that, okay, this is the business.

Let's dig into this.

Sue P. Schuster: we were profitable in a year and a half, which is super short, and that's because of the background and the area we were in. My mom was part of it. My family was all part of it. My mother had been in the swim school industry. In that part of our area in Pennsylvania for 30 years before that, she already had a clientele before she opened it.

She had a curriculum , she super uber organized. She was ready to start this business. There wasn't the floundering, there wasn't anything else. So we started the business with like 300 kids a week, and that grew quickly to about 600 kids a week. And then we grew slowly but incrementally [00:11:00] except for 2008, which was its own thing.

But we grew a little bit at a time ending at almost 2000 kids a week in 2022. Took us 18 years to get there, so we were profitable really soon. Little bit of a sticky, like. Notepad type business to begin with until we got all the operations and the scheduling software and everything under control.

But it only took us a year and a half to get profitable when you take away the cost to build the building.

That's one of the biggest barriers to swim school is actually putting a hole in the ground.

Priscilla: Oh, that's interesting. 'cause when I saw that, I was like, oh, that's a really neat business. I can see how it's needed, but I can also see how people wouldn't wanna do it because of what you just said. You have to build the swimming pool and you've gotta build the facilities. And I'm sure there's a lot that comes with that.

What I got from what you said, what was really critical the partnering of your mom. A partner who, one had the experience, had the clients, [00:12:00] two was ready to go.

Sue P. Schuster: I hopped on her coattails. I'm like, you are going in the right direction. I'm gonna help you. So between the two of us and a female led business it worked really well. She helped me, I helped her. It was a fantastic arrangement.

Priscilla: that's something that sometimes we don't think about if it's the first time you're getting into business, why not find someone who. Just needs your help and already has something going so that, like you said, you escape that floundering. 'cause I think that floundering part does kill a lot of people early in the process

Sue P. Schuster: careful who you partner with because that's a bad experience I've had is getting another partner and then that fell apart. But for instance, I know my husband is interested in starting his own business in the heavy machine, operating , in the new place we live.

What he's going to do first is to be hired by somebody else. He's gonna work for somebody else, not be a partner, not be an owner, but I'm gonna learn the industry on somebody else's dime. And then once I know what it's like here, 'cause he's has lots of experience back in PA but once he [00:13:00] learns that and he's I'm gonna start my own business.

, It is a good idea to take that year and a half, two years to really learn your craft before you try to do it on your own. Because it'll shorten your time period till you're profitable and take care of a lot of those mistakes that you're probably gonna make anyway, or that owner that you're working for already had made.

But the key is to not only work for them, but learn the business. Listen to them. 'cause , you might think he's a pain in the butt boss, but he got there somehow, or she got there somehow. And listen to him until you can do it yourself and then be the rival, which is fun.

Priscilla: literally they know something that you don't know. That's why they have the success they have. So why not get to learn and escape that floundering period. Make it shorter

Sue P. Schuster: you're still gonna do it, but make it

Priscilla: You're still gonna do it, but make it shorter.

Don't flounder too much. . Now let's get into what you're doing now, which is, first of all, you're probably gonna have to tell us what is corporate credit, because I think for a lot of people that. Isn't something [00:14:00] that's in their world, 

Sue P. Schuster: You don't know . Until you do know. And then you're annoyed. You didn't know.. Corporate credit, corporate doesn't mean corporate. Corporate means EIN number. So you can be a solopreneur. You don't even have to have any revenue. So it is the ability to use your EIN number which is in the us, the EIN number as its own entity, so that EIN that business can get into contracts, it can get sued, it can have a bank account, it can have vendors, it can do a lot of things.

, It can't be a person, but it can get funding in and of itself. So what I teach people to do is to build their corporate credit, which is different than your personal credit. And they use Experian business, Equifax business and Dun and Bradstreet, which is only business. Experian, Equifax have a personal side.

On the other personal side is a TransUnion that's not part of , business credit at all. So what I teach people to do is to get to tier four 'cause there's different tiers in business. And be [00:15:00] able to get funding for their EIN number on its own rather than personally guarantee things anymore.

Now, some stuff you're always gonna have to personally guarantee, whether it's a huge loan or different situations. You might have to personally guarantee it, but there's other situations where you don't, you can buy a vehicle. You can get different trade lines, you can get vendor lines, you can get gas cards, things like that, all on just your EIN number.

So that's a big part of what I do, is just the education on what the heck this is, how do I utilize it, and how do I eventually stop guaranteeing things?

Priscilla: what are the myths that people have around building corporate credit? Because I think that's one of the things that maybe if you've heard about it and you haven't pursued it, is because you have certain ideas about what it is, .

Sue P. Schuster: it's kind of enigma. Only about 5% of what you're using actually gets reported. And for instance, only one American, express card reports. Until recently, [00:16:00] capital One was not reporting. So the biggest myth is that people think they have corporate credit. Their bank told them they have it, their credit card told them they have it.

They have a nice little credit card with their logo or their name on it, and they think that is building corporate credit. And the problem is it's not. It gets reported to an intermediary stage. There's about 30 companies that just hold data on whether you're paying your card off on time and like the good things you're doing.

Just go to these intermediary stages or goes nowhere or goes to your personal, and whenever you do something bad pay, late overdraft stuff, then that goes directly to Experian, Equifax, or Dun and Bradstreet. So the biggest myth that people think they already have it and they don't. And then the second one is that it's easy to grow.

And that's not true. It's not like personal credit where you just do the right things. You get your mortgage and you pay it off. You get a car loan, you pay it off, and you pay your credit cards on time and all those things. That's intuitive. Business credit isn't that way. [00:17:00] It's not on how much you make.

It's on how much you spend wisely and good steward of your money. So you make sure you only spend what you can pay off. Did that make sense? Or in more clarification?

Priscilla: I'm hearing people think they have it. Probably through their bank or maybe your bank has some kind of business division. And then you can put, your company name on the card and so you think you are building your company credit and that is not it.

Those are two separate things. The corporate credit and your business credit card that you get from your bank are two separate things. Am I getting that correct?

Sue P. Schuster: Yeah, you've got it. Business credit is not the words we use because the banks use 'em and everybody else uses them. , That's why we use corporate credit. That is actually the word for it. And with that bank, you're building business credit and you might be able to take your EIN and later on when you've proven after years and years of using this bank that you are good with your money.

Okay. But if you don't like that bank's terms, conditions, everything else, and you wanted to go to a different bank, you would have no business credit with them.

Priscilla: Because , your history [00:18:00] is simply with that institution, with that bank. So for you to have the corporate credit that you can shop anywhere, is that the idea?

Sue P. Schuster: That's the idea. It's exactly the idea. You got it.

Priscilla: Okay. Maybe tell me a story. 'cause , I need to see this work

Sue P. Schuster: I was dealing with this client. They said they had a business credit. I pulled their business and anybody can look at your business credit. All they need is actually your business name and maybe your state. They don't need your EIN number. And businesses are looking at other businesses.

Credit statements so that they know if they wanna do business with them. So that's just a back office thing. So I pulled the business credit and I said, there's nothing here. He goes, yes, there is. I've been doing this, that and the other thing. I said, there's nothing here. So then we went and looked further and his bank doesn't report.

He's using Amex card that doesn't report. If you. Google or , if you chat and look up, how do I, build business credit, it's going to tell [00:19:00] you to use either Uline, Granger, or Quill. And those are great starter cards. Like you can get business credit, it's like 500 bucks, like all you can rack up.

It's not a whole lot of money, but it's a good way to start business credit. So we got him hooked up with that and then he started to build his business credit and about two months later. Then we're like, all right, so now you're at an 80 out of a hundred business credit in tier one. Now let's look a tier two cards.

So then we went and found a gas card and then we went and found , a bank that actually does report, but they were in tier two. . So then we kept those Quill and Granger cards 'cause he was utilizing them for his business or even for his home. 'cause us home businesses don't have a whole lot of expenses, but we need toilet paper.

So then we went and moved and did the gas card and the bank, and then grew the corporate credit there. Got that again at 80 in tier two. And then we looked at a different set of cards. So that's kind of how you grow it. And the first [00:20:00] cards, unless they're Quail Granger, those, you don't need a personally guarantee, but others you do have to personally guarantee in the beginning and you use them until you don't need them anymore.

Like I've grown out of this card. As your 18-year-old cards are not the same thing you're using as a 30-year-old at least. Hopefully you grow out of those cards and you get different ones, and it's just the ability to get what you're doing already, your budget for your business now to report.

It's not an additional expense, it's just using your expenses wisely.

Priscilla: Okay, so , tell me if I'm correct. As you're doing all these things with your bank credit, which. It is through the business part of your bank, and except it's not recording a history that you can leverage at some point if you needed to do something. Is that the idea?

Sue P. Schuster: There are a few banks that do report

and that's the secret sauce. That's why I'm just giving it like a. Okay. There's a few banks that report your credit union is not reporting if you're using that as your business bank account. Some of the big [00:21:00] banks don't report because actually it costs them money to report.

So they don't like to, and that's what the major problem is. They have to pay money to report things that don't actually benefit them, only benefit their customers, which , that sounds terrible, but that might be true.

Priscilla: Thank you for telling us that, 'cause a lot of times you don't know what you don't know. You think that, okay, probably this is what I should be doing. And if you've never done it before, and you said looking back, knowing what you know now, you're thinking, oh gosh, all that we went through. Can you give me like an example

Sue P. Schuster: sure. Things break. And in a pool, some things are expensive, like the heater, like the HVAC system, like new sand and gravel filters, those are all in the thousands, and we always chalk them up to a one-time expense, but sometimes when they're in the lots of thousands, we didn't have the cash flow that year.

So if we had taken a loan. On the EIN number that wasn't personally guaranteed that my kids' college savings account, , my house, [00:22:00] my retirement wasn't up for grabs, which our business was doing well, and I made that business loan, then I could amortize it or deduct it in that year, depending on how much it was, and I could get the equipment I needed, I didn't have to worry or stay up at night or having a ding to my credit again.

Because now I've leveraged it, so I personally guarantee a new HVAC system for my pool. That sort of sucks.

If I can get the business to be on the hook for it, that's much better.

Priscilla: that does make sense I can see how so many. Issues that business owners have where it's okay, where am I gonna get the money for this Now I've got to, put my own personal life at risk to keep the business going or to solve this cash flow problem that's happening.

And this is why you should have this. Tell me, what's one immediate action that a new founder could take this week if they wanted to start building their credit correctly,

Sue P. Schuster: You can't start there. You have to build a viable business [00:23:00] first. So if you are the banker and what's the banker gonna look at in my business to make sure I'm a real business? Now, let's go back to those coaches and consultants and people who just switch.

Every so often, would you wanna lend them money? No. So they're looking at, , are you using a Gmail account or a free account? Hotmail,, I'll date myself, whatever. They don't like that. They want a real account. They want a website, they want an address that's not your home address.

There's ways to use virtual ones that actually work. They don't want you to use your cell phone. They want a dedicated line. They want this business to look credible. So first you have to start with that. If you've moved addresses, your EIN business credit is actually attached to your address, not your number.

So if you've hopped around different places, you might have multiple accounts going on. Next thing to do is once you've got a credible business, which actually takes the most amount of time, then you wanna [00:24:00] register your phone with four one one. You wanna get your DMB number done in Bradstreet number that can be free.

You don't have to pay for this mess. You need an Experian and Equifax number as well. So we have a creditable business. Now the credit agencies know we exist. That's when we start getting vendor lines. Everybody likes to do it the other way

because they think it's quicker. They're just going to go for the Uline account. They're just gonna go for whatever account , but they never set up their business as a real business. So they have these accounts and then they have to go back and start over again. And set up a viable business, especially if they're looking for funding someday.

And it does take about a year.

It takes a while. Difference of a one year business and a two year business is, is big. The difference between an 18-year-old and a 19-year-old, not that big.

Priscilla: Yeah. Thank you for sharing that. The previous episode we had two gentlemen from a company called Corporate Direct, and they were talking about, setting up the LLC and things like that. And I think [00:25:00] this hand in hand with, that sort of flow of like setting up your business correctly from the beginning so that, ' there's a lot of that energy in the entrepreneurship world, especially online of just start, start selling, the energy that is driving people to want to start businesses and it never talks about the kind of things that are useful to building your correct structure from the beginning in a way that you have a good foundation.

Go ahead.

Sue P. Schuster: , I can't tell you how many people I've come across that I'm like, all right, so what is your entity's name? I'll look up your corporate credit. And so what do you mean? Do you have an EIN, right? No. What do you mean you don't have an EIN I know you make money and all this stuff.

They're like no, I don't have an EIN. I'm like, you don't have a business? Yes I do. No, you don't. You are personally liable for everything you're doing because you have no business. So let's look at that first. So yeah, setting up a credible business and don't let the lawyer use his address for your EIN number.

It starts it off on the wrong foot completely. You need an address.

Priscilla: good tip [00:26:00] there. Now I'll come to this because, I think the reason that people shy away from anything that has to do with money is sort of the psychology around money, and. Since that is the space in which you coach,, what do you mean by profit, acceleration, and why somebody would need a coach like you.

Sue P. Schuster: When you're in the weeds, sometimes you don't see you gotta look from the outside in on the company whether you're priced appropriately your market position and your wording and bundling, upsell, cross sell, all those things. And when is a good time actually to get into debt?

Because I'm a little bit debt averse, but I know if I look at my company and go, if I had a hundred thousand dollars, just throw that out, whatever it amount, if I had this much money, how would that accelerate my growth? What could I do with that in my business that would be meaningful, impactful, powerful?

Could I create new systems? Can I hire a key employee so that I can actually do more [00:27:00] stuff? And. Fire myself from some of these roles. If I'm really good at selling or if I'm really good at whatever. As a business owner, if I hire somebody else to do some of the things I'm not so great at how much is that going to make me in revenue?

Do I need more equipment? Maybe I'm a plumber and , I can only get so much done with my own hands. But if I hired somebody, 'cause I had another van and I would go out and then they can work while I'm working on somebody else. So there's times to actually utilize debt so that you can grow and the timing of that is key.

That's why I work with business coaches and fractionals and CFPs and everybody else because they know when their client, the business owner is like, alright, now it's go time. I'm ready, let's go.

Priscilla: Yeah, that's critical. , I'm just interested to know as you look out into the future, personally, what's exciting you and what are you excited about in the marketplace?

Sue P. Schuster: I'm so excited to help all these other. Business owners do what [00:28:00] I didn't know I could do. I just learned about research and development and how I could use tax credits for that. What I know, another tax strategy that you can use, Puerto Rico didn't know about that.

Being in the networking world has been crazy on all these people out there to help. But as the business owner, you're head down and you're just. Trying not to drown. Most of the time you're trying to get a breath of air. There's no time for any of the other stuff. So now that I'm outside of it looking in, I'm so excited to help those people learn about things that I didn't know about so that they could have more leverage and more time to breathe and more fun in their business.

So the business isn't running them, they're running their business. And I'm excited about all the people I'm meeting, helping and all the future people. That I'll do the same.

Priscilla: the key thing is find that leverage and how to create that leverage for your business. Thank you so much for bringing clarity, to this topic. And curiosity. I think if you're listening, you're a little bit curious. Okay.[00:29:00]

There's some things I need to know. There's some things that could help me in terms of, how I build my corporate credit, how I leverage this for my business, and how I make decisions around using debt to make leaps in my business. So this is all really interesting stuff. If you'd like to know more about Sue, please go to sschuster.profiteering.ai.

I'll link it down in the description. Sue, are you active online?

Sue P. Schuster: Yes, LinkedIn.

Priscilla: LinkedIn, Sue, just in LinkedIn, and I'll link that down in the description. Thank you so much, Sue. I appreciate your time.

Sue P. Schuster: Thank you Priscilla.