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It goes without saying that the content you create and share is the essence of building your personal brand. Producing top-quality content, in high volumes and in new formats, will have you standing out from …
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There are a ton of myths out there related to both personal credit and business credit. Credit myths have been around for as long as the idea of credit itself. Knowing what’s real and what’s not can make all the difference in how you are able to run your business.
These Credit Myths Aren’t What They Appear
We’ve all heard these credit myths. Even if we haven’t, it’s likely we’ve believed them without knowing why. While there are plenty more out there, here are some of the most common, and the truth about what you really need to know.
Credit Myths Debunked: Personal Credit Is All You Need to Run a Business
The smidge of truth behind this is, you actually can run a business on your personal credit alone. Many a business owner has done it. Most, however, would agree it isn’t ideal. In fact, I’d say it’s likely if they had known about business credit earlier, they wouldn’t even have attempted it. If your business goes bankrupt you could lose your house and your car. Since, according to Forbes, at least 70% of small businesses do not make it even 10 years, it’s a terrible idea to fund your business with your personal credit only.
Is There Even Such a Thing as Business Credit?
The answer is, yes. There is absolutely such a thing as business credit. It is credit based solely on the merits of your business’s ability to repay business debt. It is totally separate from personal credit. When set up properly, the accounts that report to your business credit do not affect your personal credit, and vice versa.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
Why Do You Need Business Credit?
First, if your business goes south and you are not able to make good on your business accounts, your personal credit will not suffer. You will still be able to buy a home or car without the fear of your business troubles affecting it.
Consequently, if your personal credit takes a dive, you will still be able to get the funding you need for your business. That’s not all though. Even if you make your payments as you should, running a business on personal credit can cause problems.
Part of what makes up your personal credit score is the debt-to-credit ratio. This is how much of your available credit you are using versus how much total credit you have available to you. The higher this ratio is, the lower your credit score. So, if you have $10,000 in available credit, but you have a balance on your cards totaling $8,000, your debt to credit ratio is .8. However, if your total balance is $2,000, your debt to credit ratio is .2. That looks a lot better to lenders.
Now, considering that business accounts are typically much larger than personal accounts, if you are funding them with personal credit you are much more likely to stay at or near your total credit limit. That means, even if you are regularly paying off your balance, you are likely going to keep a debt to credit ratio near 1, resulting in a lower personal credit score.
How Does Business Credit Help?
Business credit limits are typically much higher than personal credit limits. In addition, the debt to credit ratio does not really affect business credit scores the same way it does personal credit scores. Therefore, if you establish separate business credit for your business, you can protect your personal credit from your business expenses and more efficiently fund your business.
On the flip side, you shouldn’t think that your personal credit cannot affect your ability to get business funding at all. While, in the strictest sense it does not affect your business credit report or score, it can still have an impact on your lender’s overall funding decision.
ome business credit reporting agencies use your personal credit in the calculation of your business credit score. Sometimes, if a business hasn’t been around long enough, a combined personal and business credit report will be issued.
For many lenders, personal credit score is a key piece of overall fundability. This is the total ability of a business to handle all debts. It is a puzzle made of many pieces, and while business credit is the largest piece, personal credit still has its place. So, don’t think if you have business credit that personal credit doesn’t matter. You can’t just ignore it.
Credit Myths Debunked: Business Credit is All that Matters When Funding a Business
Not only does personal credit have an impact on overall fundability, but so do a number of other things. In addition to business credit and personal credit, your business’s overall fundability is affected by the following things.
How Your Business is Set Up
The way your business is set up can affect fundability. Consider the following:
Does your business have its own phone number and address? It should.
Do you have an EIN for your business? This is an identifying number for your business that works in a way similar to how your SSN works for you personally. You can get one for free from the IRS.
Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability. It lends credence to your business as one that is legitimate. It also offers some protection from liability. It also truly separates your business from you and your personal assets.
Business Bank Account
You have to open a separate, dedicated business bank account. There are many reasons for this, but for fundability you need to know two things. First, it helps establish your business as an entity separate from you the owner. Next, time in business matters to lenders. Many lenders consider the date the business bank account was opened to be the start of business.
Another thing to consider is, you cannot get a merchant account without a business bank account. Without a merchant account you cannot accept credit card payments. Since studies show people are much more likely to spend if they can use a credit card, you need to be able to accept them as a form of payment.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
For a business to be legitimate it has to have all of the necessary licenses it needs to run. If it doesn’t, red flags are going to fly up all over the place. Do the research you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels.
These days, you do not exist if you do not have a website. However, having a poorly put together website can be even worse. It is the first impression you make on many. If it appears to be unprofessional, it will not bode well for you with consumers or potential lenders.
On the surface, it seems obvious that all of your business information should be the same across the board everywhere you use it. However, when you start changing things up like adding a business phone number and address or incorporating, you may find that some things slip through the cracks. Non-uniform business information can cause fraud concerns.
Other Business Data Agencies
In addition to the business credit reporting agencies that directly calculate and issue credit reports, there are other business data agencies that affect those reports indirectly. Two examples of this are LexisNexis and The Small Business Finance Exchange. These two agencies gather data from a variety of sources, including public records.
The Application Process
Even the application process can affect overall fundability. First, consider the timing of the application. Is your business currently fundable? If not, do some work first to increase fundability. Next, ensure that your business name, business address, and ownership status are all verifiable. Lenders will check into it. Lastly, make sure you choose the right lending product for your business and your needs. Do you need a traditional loan or a line of credit? Would a working capital loan or expansion loan work best for your needs? Choosing the right product to apply for can make all the difference.
So, while it is true that business credit is a big part of what lenders look at when it comes to approving funding, maybe even the biggest part, there is more to it.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
Credit Myths Debunked: You Must Have Credit to Get Credit
This is true in a sense. We’ve all heard and even seen it. You apply for financing but are turned down because you don’t have any credit. But, how do you ever build credit without getting credit? There’s a trick that few know, and it’s called starter vendors.
These are vendors that will issue net terms on invoices without a credit check. Then, they will report your payments on those invoices to the business credit reporting agencies. As a result, your business credit score starts to grow and you can eventually apply for types of financing.
Credit Myths Debunked: Making Payments on Time is All that Matters
Of course, making payments on time definitely matters. If you do not make payments on-time, there isn’t much you can do other than to start making them on time. However, you can make every payment on time, and if your overall fundability isn’t in order you may still get denied.
For example, if all of your business information isn’t uniform across the board, a lender may deny your application due to fraud concerns. If your business doesn’t have its own contact information or separate bank account, a lender may not take it seriously as a legitimate business. When it comes to fundability and getting approval for financing, everything counts.
Don’t Let These Credit Myths Keep You from Getting Funding for Your Business
There are other credit score myths out there, but these seem to be some of the most common misconceptions about credit. Don’t let them keep you from getting the funding you need to run and grow your business. Do your own research. Understand where you are in terms of fundability. Then, you can give yourself the best chance as approval for whatever type of funding you need.
Color wields enormous sway over our attitudes and emotions.
When our eyes take in color, they communicate with a region of the brain known as the hypothalamus, which sends a cascade of signals to the pituitary gland, on to the endocrine system, and then to the thyroid glands. The thyroid glands signal the release of hormones, which cause fluctuation in mood, emotion, and resulting behavior.
What is even more interesting is that a case study showed that adjusting color, among other elements, can increase conversion by as much as 24%.
The study of all this is called color psychology, and the bottom line is: use the right colors, and you win.
What is Color Psychology?
Color psychology is the science of how color affects human behavior. Color psychology actually is a branch of the broader field of behavioral psychology. Suffice it to say that it’s a pretty complicated field.
Some skeptics are even dismissive of the whole field of color psychology due to the difficulty of testing theories.
My own research on the topic, as this article conveys, lacks scientific evidence to back up every claim. But that alone is no reason to dismiss the profound and unarguable effect that color has on people.
There are key facts of color theory that are indisputable. In a classic study on color in a peer-reviewed journal article, Satyendra Singh determined that it takes a mere 90 seconds for a customer to form an opinion about a product. And, 62-90 percent of that interaction is determined by the color of the product alone.
Color psychology is a must-study field for leaders, office managers, architects, gardeners, chefs, product designers, packaging designers, store owners, and even expectant parents painting the nursery for the new arrival! Color is critical. Our success depends upon how we use color.
However, the psychology of color is often a subject of disagreement in marketing and website design because color preference varies widely between individuals. For example, many people prefer red to blue, while even conjoined twins might prefer different t-shirt colors.
Where Should You Use Color Psychology?
Colors impact everyone. It doesn’t matter whether you’re developing software, designing a book, developing a web design cover, or simply branding your business: colors define mood and influence responses.
Since color is ubiquitous, we need to understand where you should use these color tips. This article discusses the use of color in website design. Specifically, we’re talking about the color scheme of a website, which includes the tint of hero graphics, headline type, borders, backgrounds, buttons, and popups.
In the example below, NinjaJump uses a green-yellow-red color scheme in its logo, phone number, video C2A, menu bar, graphics, category menu, subheadings, and sidebar.
The tips that we discuss below can be applied in similar ways across a wide range of areas, including:
- Landing pages
- Menu bars
- Email marketing
- Social media posts and cover photos
- Product design
As you can see, color psychology can be used just about anywhere. So, how do you get it, right?
Using the Right Color Psychology the Right Way
Color is a tricky thing. You have to use it in the right way, at the right time, with the right audience, and for the right purpose.
For example, if you are selling bouncy jump houses — those things kids play in — you don’t want to use a black website. Props, NinjaJump.com.
For the jump house site, you want lots of bright and vibrant colors, probably some reds, greens, and maybe a splash of yellow for good measure.
If, on the other hand, you’re selling a product to women, you don’t want to use brown or orange. Maybe that’s why L’Oreal uses black and white, with purple overlay, in their e-commerce homepage.
I’ll explain all the tricks below. To succeed at using the right color psychology, you need to follow these core principles:
- The right way
- The right time
- The right audience
- The right purpose
Here are some tips the pros use to leverage color psychology to improve conversion.
Proven Color Psychology Tips to Drive Conversions
CRO is an integral part of building a successful website. The goal is to get the best ROI possible and to thrive, no matter how strong your competition might be.
Since less than 5% of the population suffers from color blindness, color theory is an option that should be explored — and tested.
Here are a few color psychology tips to keep in mind.
1. Women Prefer Blue, Purple, and Green
The sociological differences between color preferences is a whole branch of study unto itself.
In a survey on color and gender, 35% of women said blue was their favorite color, followed by purple (23%) and green (14%). 33% of women confessed that orange was their least favorite color, followed by brown (33%) and gray (17%).
Other studies have corroborated these findings, revealing a female aversion to earthy tones and a preference for primary colors with tints.
Look at how this is played out. Visit nearly any e-commerce site whose target audience is female, and you’ll find these female color preferences affirmed.
Milani Cosmetics has a primarily female customer base. Thus, there’s not a shred of orange, gray, or brown on the homepage:
Woman’s Day uses all three of the favorite colors of women (blue, purple, and green) on their homepage, thus inviting in their target audience:
Most people think that the universally-loved female color is pink. It’s not. Just a small percentage of women choose pink as their favorite color.
Thus, while pink may suggest femininity in color psychology, this doesn’t mean that pink is appealing to all women, or even most women. Use colors other than pink — like blue, purple, and green — and you may improve your e-commerce website’s appeal to female visitors. That may, in turn, improve conversions.
2. Men Prefer Blue, Green, and Black
If you’re marketing to men, these are the colors to stay away from purple, orange, and brown. Instead, use blue, green, and black. These colors — blue, green, and black — are traditionally associated with maleness. However, it comes as a slight surprise to some that brown isn’t a favorite pick.
Keep in mind that gender preferences are not cut and dry. Gender is a complex topic, and not all men or women will prefer the colors above. However, this information can serve as a starting point for A/B testing.
3. Use Blue to Cultivate Trust
Blue is one of the most-used colors, with good reason. A lot of people like blue.
Read the literature on blue, and you’ll come across messages like
- The color blue is a color of trust, peace, order, and loyalty.
- Blue is the color of corporate America, and it says, “Chill . . . believe and trust me . . . have confidence in what I am saying!”
- Blue calls to mind feelings of calmness and serenity. It often is described as peaceful, tranquil, secure, and orderly.
There is wide agreement in the research community on the psychological effects of the color blue. Its subtle message of trustworthiness and serenity is true. You can use this to your advantage on your website and landing pages.
The world’s biggest social network is blue. For a company whose core values are transparency and trust, this probably is not an accident.
A company that serves as a conduit for billions of dollars, PayPal, also prefers the color blue. Chances are, this helps to improve their trustworthiness. If they were to try, say, red or orange as the theme color and branding, they probably wouldn’t have the same conversion level.
Blue is, in fact, a color heavily used by many banks. Here’s CapitalOne.com, a major Internet bank:
Although blue is pretty much an all-around great color, it should never be used for anything related to food. Dieters have used blue plates to successfully prevent them from eating more.
Evolutionary theory suggests that blue is a color associated with poison. There aren’t very many blue foods — blueberries and plums just about cover it. Thus, never use blue if you’re selling foodie stuff. (Use red instead.)
4. Yellow is for Warnings
Yellow is a color of warning. Hence, the color yellow is used for warning signs, traffic signals, and wet floor signs.
It seems odd, then, that some color psychologists declare yellow to be the color of happiness. Business Insider reports that “brands use yellow to show that they’re fun and friendly.” There is a chance that yellow can suggest playfulness. However, since yellow stimulates the brain’s excitement center, the playfulness feeling may be simply a state of heightened emotion and response, not exactly sheer joy.
Color psychology is closely tied to memories and experiences. If someone had an enjoyable experience with someone wearing a yellow shirt, eating at a fast-food establishment with yellow arches, or living in a home with yellow walls, then the yellow color may cause joy by memory association.
One of the most-cited “facts” about the color yellow is that it makes babies cry and people angry. To date, I have not found any study that backs up this claim, even though everyone is fairly comfortable repeating it.
I’ve even read that “the color yellow can cause nausea,” though I’m doubtful about this.
If you find the study about cranky babies and angry people living in yellow-walled houses, please let me know. I’m pretty sure that babies are going to cry, and people are going to get ticked, regardless of the paint color.
Whatever the case, it seems true that “yellow activates the brain’s anxiety center,” as reported by one color expert.
A heightened anxiety level during any website experience is never a good thing unless it comes in small doses. Thus, a yellow call to action may create just a touch of anxiety needed to make them click the desired call to action.
Use yellow in small doses unless you want to cause unnecessary anxiety.
5. Green is Ideal for Environmental and Outdoor Products and Brands
Perhaps the most intuitive color connection is green — the color of outdoors, eco-friendly, nature, and the environment. Green essentially is a chromatic symbol for nature itself.
Apart from its fairly obvious outdoorsy suggestiveness, green also is a color that can improve creativity. Labeled “the green effect,” one peer-reviewed study indicated that participants had more bursts of creativity when presented with a flash of green color as opposed to any other color.
If your website’s focus has anything to do with nature, the environment, organic, or outdoors, green should be your color of choice.
Green isn’t just about nature, though. Green also is a good call to action color, especially when used in combination with the “isolation effect,” also known as the von Restorff effect, which states that you remember things better if they stand out.
You remember the Statue of Liberty because it’s big, tall, green, and there isn’t a whole lot of them in the New York Harbor. In color psychology, the isolation effect occurs when a focus item, such as a conversion step, is the only item of a particular color. The technique works wonders for calls to action, and green is an ideal choice.
Here’s how Conrad Feagin uses it:
All of Dell’s conversion elements are green.
The word “green” itself is a buzzword for environmental awareness and appreciation. Using the word and the color itself can lend an environmental aura to your website, improving your reputation among those passionate about environmental concerns.
5. Orange Can Create a Sense of Haste or Impulse
The positive side of orange is that it can be used as the “fun” color. According to some, orange helps to “stimulate physical activity, competition, and confidence.” This may be why orange is used heavily by sports teams and children’s products.
A great example is the Denver Broncos logo.
In fact, there are a ton of sports teams that use orange: Florida Gators, Clemson Tigers, Boise State Broncos, Syracuse, New York Knicks, New York Mets, Cleveland Browns, etc.
Amazon.com uses orange in their “limited time offer” banner. The color suggests urgency, which makes the message more noticeable and actionable:
It makes sense. Orange means active. Orange means fun. Orange means togetherness because it’s a loud and warm color.
However, orange can be slightly overwhelming. A research paper advises,
Orange will be used sparingly to bring your attention to something, but not so much as to overwhelm the actual message of the advert.
Sometimes, orange is interpreted as “cheap.” If your product offering is cheap, or if you want it to be seen as such, orange may be a good choice. Vive la Big Lots.
6. Black Adds a Sense of Luxury and Value
The darker the tone, the more lux it is, says our internal color psychology. Black can also be associated with elegance, sophistication, and power, which is exactly what luxury designers and high-end e-commerce sites want you to feel.
In a Business Insider piece on color and branding, the author relates the significance of black:
“Black can also be seen as a luxurious color. ‘Black, when used correctly can communicate glamour, sophistication, exclusivity.’”
Louis Vuitton handbags are not cheap. Absent from the site are colors and designs of whimsy and fun. This is serious value:
Citizen Watch, better than the average Timex, also uses the dark-tone website design:
Lamborghini does the same thing. Black is the name of the game:
If you sell high-value luxury consumer items on your website, black probably would be a good choice.
7. Use Bright Primary Colors for Your CTA
In strict testing environments, the highest-converting colors for calls to action are bright primary and secondary colors – red, green, orange, yellow.
Darker colors like black, dark gray, brown, or purple have very low conversion rates. Brighter ones have higher conversion rates.
Women’s Health uses a bright mauve-tinted shade for their popup call to action. They’ve got the female-associated purple/pink tint going for them, along with a bright tone.
GreenGeeks uses a yellow button:
The biggest retailer in the world uses that famous “add to cart” button. It’s yellow:
Some of the best conversion colors are the “ugly” ones — orange and yellow. An article on ColorMatters.com states,
Psychologically, the ‘anti-aesthetic’ colors may well capture more attention than those on the aesthetically-correct list.
Since a conversion element’s goal is to capture attention, you may do just fine with that big orange button (BOB). Or yellow.
8. Don’t Neglect White
In most of the color psychology material I read, there is a forgotten feature. Maybe that’s because color theorists can’t agree on whether white is a color or not. I don’t really care whether it is or not.
What I do know is that copious use of white space is a powerful design feature. Take, for example, the most popular website in the world. It’s basically all white:
White is often forgotten because its primary use is as a background color. Today, most well-designed websites use plenty of white space to create a sense of freedom, spaciousness, and breathability.
Color Psychology Best Practices to Drive Conversions
You may not be in a position to rewrite your style guide and pick your own website color palette or font colors on the email template. So, how can you use color psychology in these situations? There are a few options:
- If the colors really suck, campaign for change. In some situations, you may need to make a difference. If you’re a high-heel designer selling to upscale women but have a crappy orange logo, share your concerns with the decision-makers. People sometimes make terrible color decisions. Kindly show them how a killer color scheme can make a conversion difference.
- Use psychology-appropriate colors that match the existing color scheme. Sure, you need to adapt to the color scheme, but you can still use a splash of strategic color here and there. Let’s say, for the sake of example, that you have a blue-themed website. Fine. You can create a popup to harvest email addresses and use a bright yellow button. The button is psychology-appropriate, and it doesn’t do damage to the company’s color branding.
The more freedom you have in your color scheme, the better. Here are some solid takeaways as you implement color psychology into your website:
- Test several colors: Despite what some may say, there is no right color for a conversion text or button. Try a green, purple, or yellow button. Explore the advantages of a black background scheme vs. a white background. Find out which works best for your audience and with your product.
- Don’t just leave the color choice up to your designer: I have enormous respect for most web designers. I’ve worked with many of them. However, don’t let your designer dictate what colors you should use on your website. Color is a conversion issue, not just an “Oh, it looks good” issue. Color aesthetics is not everything. Color conversion effects are important! You should be heavily involved in the color selection of your landing pages to improve your conversions.
- Avoid color overload: I’ve just spent over 3,000 words telling you how important an awesome color is. Now, you’re going to go out and color something. But don’t go overboard. Remember my final point. I put it last for a reason. White is a color, and it should be your BFF color, too. Reign in your color enthusiasm with a whole lot of white. Too many colors can create a sense of confusion.
The Internet is a colorful place, and there is a lot that can be accomplished by using color correctly, at the right time, with the right audience, and for the right purpose.
Naturally, this article leads to questions about making changes in your company’s context. What about if your company has a specific color in your style guide? What if the logo color dictates a certain tint? What if the lead designer dictates color requirements? How do you deal with that?
How have your color changes affected your conversions?
The post How to Use the Psychology of Color to Increase Website Conversions appeared first on Neil Patel.
Jimmie Johnson is just as confused as everyone else about his plight with the coronavirus. A positive test caused the seven-time NASCAR champion to miss the first race of his career, and it was followed three days later by a negative test.