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Five Steps To Get Your Business Out Of Debt

Five Steps To Get Your Business Out Of Debt

If there is one part of running a small business that is necessary, it’s debt. Most people wouldn’t think it’s a good idea, but all businesses (except those entirely bootstrapped) have a line of debt in some way or another. Some businesses have full bank loans, others credit cards. There are even those that maintain a line of credit to ensure that they can pay their bills. Debt is not always a bad thing and when it is for a business, they may find that debt can help them to hire a new employee or purchase new equipment. Debt can even finance growth in a business, but too much debt? Well, that can stifle cash flow, put a business at risk and leave less than enough to invest elsewhere.

If your business is in debt, you are not alone. Almost half of all new businesses fail in the first twelve months, and while you may not want this to be your business, you should consider that debt is something that you can get out of. With this in mind, we’ve got five steps for moving your business out of debt and back into the black.

Photo by Miguel Á. Padriñán from Pexels
  1. Get some advice. The very first thing that you should do if your business is in debt is to get some advice from companies like Canyon Legal Group. You can ensure that you are taking the correct steps under the watchful eye of a business that knows what they are doing. The advice that you get can help you to get out of a debt hole and it can be very helpful if you are dealing with specifically difficult creditors.
  2. Take an inventory. You need to know how much you owe to people and how many creditors you have so that you can sort out which debts can be paid off quickly and which cannot. If you ensure that you collate all of your debts together, you get a clearer picture of what you owe and to whom. This can offer you the help that you need to repay your debts and credit lines, and you can keep on top of every payment.
  3. Boost your sales where you can. When you have a plan for your debts, you can work on boosting your sales to help to plug the gap. You can reward loyal customers with discounts and the money that flows in from this will allow you to pay down debt faster. You can also get active on social media to drum up business and advertise your business where you can.
  4. Cut down your business costs. While you’re working on boosting your sales to tackle debt, you should also plan to cut down your costs and use those savings to plow money into your debts. Sell off old equipment, downsie the office and save on rent, too.
  5. Refinance the debts you have. The biggest debts could be collected together and consolidated, allowing you to refinance and have just one payment for all debts. This will be hugely helpful when you are trying to pay it down.

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