There’s no getting around it – debt is a pretty necessary part of setting up and running a small business. Taking out a business loan or opening up a line of credit will help you take care of the basics, like buying essential equipment and hiring employees, but if you take it too far, having too much debt can suffocate your company’s financial growth and even put it at the very real risk of completely folding. Luckily, if your debts get really bad you can get it touch with companies like HJS Recovery who will help you with your debts and get you back on track.
So, it’s fair to say that keeping your debt levels in check is an essential part of running a successful small business, but how exactly do you do that?
Take Stock Of Your Debt
Before you can work on reducing your debt, you really do need to determine how many debts you have and how much you are paying out to cover them each month. This includes everything from business credit cards to bank loans.
Once you know what you’re dealing with, rank each debt in order of interest rate, starting with the highest rates first. Then, concentrate on paying down your debt, starting at the top of the list and working your way down.
Refinance Expensive Debts
If you’ve taken out one or more high-interest loans, or you have so much debt that you’re really struggling to make much progress, one thing you could do is take out a lower interest loan from Swift Financial to consolidate your debts and make them much easier to pay off more quickly at a lower interest rate, or if you use credit cards, switching to a car that offers 0% interest on balance transfers could be a good option for you.
Increase Your Sales
If you want to get your debt under control quickly, one thing you might also want to consider is looking at ways to boost your sales, so that you have more cash available to deal with them. I know this isn’t always easy, if you can find ways of enticing more customers, perhaps by offering a loyalty scheme or a by making a real push to market your goods and services on social media, it will help. Even a small increase in sales could make your position stronger and your debts fewer!
Decrease Your Costs
Conversely, decreasing your costs could be a good option for you. If you’ve had the same suppliers since you started your business, you could try negotiating a better price with them or even looking elsewhere for cheaper options. You could also consider renting space in your office (if you have one) to cut the cost of running your office, start outsourcing certain business functions outside of your core competencies, or you could even think about downsizing.
There are lots of ways to decrease your outgoings and filter the savings into paying down your debt; you just need to take some time to determine the right ones for you and your business.
Revise Payment Terms
If you’re having trouble keeping your debts under control because many of your clients don’t pay on time, leaving you short of cash when it comes time to make a payment, you might want to consider revising your payment terms, so that they are shorter, and offering an incentive to pay early, such as a small discount. This will help to ensure you always have funds available, so you don’t get hit with bank charges when you fail to make a repayment on time.
I hope you enjoyed this article about how to get your small business debt under control with frugal finances and simple tricks.
Interested in more articles about frugal finance?
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Published by Michael J Schiemer
Owner of Bootstrap Business
Money - Marketing - Motivation
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