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This month we have another guest post, this time from Ted! I’ve been loving having guest posts on this blog, because it not only gives me some time to think up better content for when I do post, but also gives you guys a bit of a break from just my point of view. If you think you have something valuable to share, feel free to send me a message and we can connect. But now with further ado, Ted’s post on operating a debt-free business! 🙂
To find the business you built inundated with unpaid bills and fees can feel overwhelming. Not knowing where to begin, it’s normal to consider giving up entirely. Luckily, there are numerous strategies and services available to help your business clear out outstanding arrears and get itself back on track, as a business administration study found that small businesses in the U.S. alone hold a combined deficit of $17.7 trillion.
Reevaluating Your Finances
The first step to getting out of the red is refining your budget, or establishing one in the first place if you haven’t already. Having a sense of how much money you have going in and coming out is key to knowing what methods are viable for your debt elimination mission. Reducing how much your business is spending obviously leaves more room in the budget to pay off outstanding invoices, so assess all outgoing funds and whether they’re providing something vital to the business.
Conversely, greater income will let you wipe out your deficit more quickly, so make sure you’re not leaving any money on the table. Consider whether there are any demographics your advertising or even services aren’t appealing to and strategize how to bring them into the fold. Cost-cutting measures such as the use of inexpensive or reusable materials, lean staffing practices, and extended hours can also widen your profit margins.
If cutting costs means reducing your own personal pay, whether temporarily or indefinitely, you may want to organize your income and expenses with a personal finance app. Keeping these programs updated will give you insight into your company’s financial health at a glance. This will not only help you manage your debt but will keep you organized moving forward so this sort of crisis is less likely in the future.
Finding the Right Assistance
When a simple restructure of your finances fails, it can all be overwhelming to someone going through it for the first time. Fortunately, there’s relief in seeking professional advice. Accountants, lawyers, and even certain bank staff are available to help you reduce your business’ debt in a legal and effective manner.
If you’re indebted to various sources, you may wish to look into debt consolidation. By combining all various debts into one comprehensive loan, you can avoid the multiple interest rates and hits to your credit score. There’s no magic wand to eliminate debt, but consolidating it allows you to focus on a single payment while repairing your standing with the individuals and organizations to which you were indebted.
If these methods don’t seem viable or you still don’t know where to begin, there’s no shame in admitting you have more to learn. You may consider taking business courses online. Developing your skills further will lessen the load of managing your company’s debt. Basic courses are available for first-time entrepreneurs, as well as more specific classes on management, finances, advertising, and more. It’s never too late to go back to school, and your expanded education will serve you and your business long after your debt has been managed. The best part: the flexibility of online courses means you won’t have to give up your job while you go back to school.
When your organization is swimming in debt it’s important to remember that you’re not alone. Building on the help and experience of others can make an insurmountable challenge feel like a minor inconvenience.
As a one-on-one financial coach, Ted James has seen and helped it all. He created his site, Ted Knows Money, to share money tips and help people get complete control of their finances.