Many businesses find themselves in debt at some point. Whether you’re struggling to get customers or have simply been borrowing a lot of money to improve the company, debt can easily be escaped so long as you take action promptly. Here are just a few steps you should take when getting your business out the red.
The most obvious step is to stop borrowing money – this will only add to your debts. If you’ve got a business credit card, you might be best off getting rid of it as this can make borrowing too easy and convenient to resist. The only loans you may want to consider are debt consolidation loans that can help to make your debts more manageable or invoice factoring in which you’re getting money in advance which you are already owed.
Make the right cutbacks
Cutbacks may be needed to help your business recover – but be careful of what you cut back. You don’t want to be dismissing employees if you prevent it, as this can result in all kinds of issues that could affect your reputation. Instead, consider downsizing your premises or moving to a cheaper location. If your work is computer/phone based you may be able to start hiring employees remotely, ridding the need of a big office. Also look for unnecessary expenses such as software subscriptions you don’t really use and travel costs that could be replaced by video-communication.
Find ways to up your revenue
Upping your income could help you to pay off your debts and reduce the need for as many cutbacks. Taking on more work could be one way of raising revenue. That said, you don’t want to be overworking yourself. Consider upping your prices instead or upselling new premium services.
Negotiate with your creditors
You may be able to better manage your debts by talking to your creditors and negotiating a new payment plan. Creditors such as energy providers might allow you to pay off your debts in small instalments rather than all at once. It always helps to talk – never ignore payments as they won’t go away.
Look into debt relief plans
You may be able to get assistance with your debt with the help of trained negotiators and solicitors. They may be able to save you from bankruptcy by talking to creditors and settling on a more manageable payment. They may also be able to help with any unreasonable creditors that are harassing you.
Dealing with debt can be stressful, especially as a company in which you may be having to protect the welfare of employees and clients. Don’t be afraid to seek counsel and talk to someone about your issues. Staying positive will help you to stay motivated when it comes to paying off all your debts.