Women-owned businesses have contracting advantages

Dear Karen: I’m a female sole practitioner in the service sector. Do I qualify as a minority small-business owner?

Answer: As a sole practitioner, you qualify as a small-business owner under the guidelines of the Small Business Administration. Women-owned businesses are not considered minority-owned, but there are significant financing assistance programs and contracting advantages for certified women-owned businesses.

Many resources exist to aid women business owners, such as the SBA’s Women’s Business Centers, www.sba.gov; the National Assn. of Women Business Owners, www.nawbo.org; and the Assn. of Women’s Business Centers, www.awbc.biz.

Getting credit for a new firm

Dear Karen: I’m starting a small business. How can I establish credit for my company?

Answer: Start by cleaning up your financial records, registering your business with commercial bureaus such as Dun and Bradstreet, www.dnb.com, and getting a business license.

“Make it easy for credit card issuers to confirm that your business is an established enterprise,” said Esra Alev, vice president of credit cards for American Express’ small-business initiative Open.

Once your business gets off the ground, don’t apply for too much credit all at once.

“In any credit environment, too many credit requests can lower a credit score and negatively impact the ability to access credit,” Alev said.

Steps to take to cut overhead

Dear Karen: My business overhead is killing profits. Do you have any suggestions?

Answer: Look through all your existing contracts to see if you can renegotiate or update them for better terms and lower prices.

Have you signed leases that are up for renewal this year? With the real estate market down, you may be able to get longer terms at lower rates, said Ruben Ferziger, a small-business attorney in New York.

“Some of your contracts may have built-in price escalations that can be slowed or stopped,” Ferziger said.

If your suppliers and service providers will not consider renegotiating their terms with you, get competitive bids from new vendors. You may be able to significantly reduce your costs for services such as accounting and consulting, he said.

Got a questions about running or starting a small enterprise? E-mail Karen at inbox.business@latimes .com. Or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.