Small Business Credit Profile: Keep Yourself Smelling Sweet (KYSS)
Founder Marshall-McKinley strategically uses two cards for business expenses
Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Small Business Credit Profiles,” a weekly column featuring small business owners' journey with credit and credit cards for CreditCards.com.
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The idea for Keep Yourself Smelling Sweet (KYSS), a line of affordable natural bath and body products, began in the shower. It was 2012, and Renee Marshall-McKinley was an information technology professional for a health insurance company. Handmade soaps, though, called to her.
“I began to research it like it was my job,” says Marshall-McKinley. “I wanted to know the science behind it, like, ‘how do you get all those bubbles?’ and ‘how do you make it smell sweet?’” She transformed her kitchen into a laboratory where she mixed soaps and potions the artisanal way – handcrafted in small batches to maintain integrity and quality.
She began to sell her creations online that same year, and soon KYSS products landed in the hands (and showers) of such celebrities as Chaka Khan, Faith Evans and the hosts of The Chew cooking show. In October 2017, Essence Magazine named Marshall-McKinley one of the Top 50 Founders to Watch, and sales took off.
KYSS is not just financially successful, but also a positive force in the community. Marshall-McKinley facilitates workshops throughout the U.S. to help others start their own beauty care business and donates money and products to the Newark YMCA and the Lupus Foundation.
So how have credit cards benefited the business? Marshall-McKinley explains.
See related: Small Business Credit Profile: Erin Pelicano Jewelry
How good credit helped finance start-up costs
When I started KYSS, I financed the company with a small amount of saved cash. That was OK at first, but as I began to grow, I needed more capital. I had good credit so began to use my credit cards to make ends meet. I needed more raw materials for the business and grew comfortable with using my credit cards to finance my growth and pay for gas to get me around.
I learned very early on to make payments on time. I could not afford to (nor did I want to) pay late payment fees. I also learned that late payments could cause the lender to cancel a card, not to mention that activity being negatively reported to the three credit reporting bureaus. I didn’t want to adversely impact my ability to get another card or a balance increase if I needed it in the near future.
I also learned the hard way to not be a co-signer of a loan. I thought that I was helping to bail someone out and that person defaulted on the loan. I, as the co-signer, was just as responsible for the loan as if it were my own. My only grace was that the balance was almost paid off. I was angry at that person and myself but it was a teachable moment.
How did you choose which credit cards to use?
I have two go-to credit cards. The first is an American Express® Gold Card because it offers many benefits and it helps me stay on budget. It’s a charge card, so I am expected to pay it all in full [by the due date]. That’s my favorite aspect, believe it or not. My purchases are made strategically, on sale whenever possible. This card also allows you to pay only part of the full bill at a low interest rate. [The Pay Over Time balance charges interest as of the date transactions are added to the balance. Interest isn't charged if the new total account balance is paid by the due date each month.] I enjoy that feature when I’m waiting on money to hit the bank.
Another aspect I enjoy is paying for purchases with my points. I use them when I travel for flights, hotel stays, meals and car rentals. I want to buy everything with it because of the rewards points and the shopping security that comes with American Express. I have a few business expenses on autopay, like my website, because I don’t ever want to forget to renew it on time, and E-ZPASS [toll payment service] because I do a ton of highway driving.
Then there is my HSBC Cash Rewards Mastercard credit card. This is the account I use for cash back rewards, and there is no fee. How awesome is that? I can use this card for free and earn 1.5 percent cash back on every purchase. That’s big win for a small business.
How are your cards helping your business grow?
The credit cards are useful as a budgeting resource. With them I spend wisely and frugally, making sure not to overspend on items that are not needed immediately. They give me an unlimited spending power which, for a small business, is awesome, until the 30 days are up and the full bill is due.
I have to be mindful of how much supplies or travel I can afford to pay off at the end of the billing cycle. I know that if I don’t have the income or invoices coming in from my customers to cover what I need to purchase via my credit card, I will need to put that on the budget for the next credit card cycle.
Credit cards are also great as a savings tool.
I use the rewards points to book hotel rooms to host KYSS Girls Night Out shopping events so I don’t need to use cash. I buy gift cards with the points and use them as thank you presents and incentives for my assistant and brand ambassadors. Using my credit card on daily needs like gas, supplies and printing builds up my cash back points, and I really enjoy that.
What money lessons have you gleaned along the way?
First, I will never be a co-signer on a loan again! That person’s debt turned into my debt. I’ve always been taught as a young adult to be a lender, not a borrower. Relationships can be broken over borrowed money.
Starting a business can be extremely rewarding. Remember to start your business with a financial plan just like you plan for anything else in life. Budgeting is essential and oftentimes credit cards are part of that plan.
Shop around for credit cards that will give you and your business the best benefits or rewards. I knew that American Express membership has its privileges, and I wanted to be a part of it. I have not regretted it yet. As for HSBC, no fee, cash back rewards and a low APR were what attracted me.
Use the points you earn to your advantage on things like travel or lodging, as well as for everyday business needs. Always shop strategically and purchase what you need – not what you want. Pay your cards on time and monitor your credit report. You may need to borrow from a lender in the future, so be prepared for growth by keeping your credit clean.