Are you a business owner? If yes, then you more than likely know how stressful business debt can be. Even healthy companies are sometimes forced to take business debt on in order to launch new products and grow the business. Debt isn’t a bad thing, as it’s often part of growing a business, but staying in debt can be very dangerous.
It’s important to attempt to pay down debt as quickly as possible. Here are some tips to help you do just that.
Eliminate unnecessary spending
In our personal lives, we usually save money by cutting out unnecessary spending — you can apply the same method in your business. By slashing unnecessary spending, you will be able to pay off business debt faster. You need to identify areas where spending money can be eliminated. Are you paying for any software or services that you aren’t using enough to justify the cost? “Cutting unnecessary spending is the best way to save money and pay your debt right away,” says Darryl Howard of Medical Spa in Boca Raton. “Look through your expenses over the past few months and look for ones you can cut while still operating smoothly.”
Call your creditors
If you need to lower your business debt faster then ask your creditors if they are willing to work with you. For example, ask the credit card company if they can help you by lowering the credit card interest rate. This, in turn, will help you to pay off the debt faster and save that money which is otherwise get eaten away due to high interest. “Most card companies would rather lower the rate and get something back than have the business default and not pay anything back,” advises Jake Braun of ChopperExchange, a website that provides tips to sell your Harley.
Create a budget for your business
Another way to pay off the business debt faster is by creating a budget for the business and sticking to it. If don’t have a strict business budget this could be the reason for facing financial issues. Gather all the bills and start selecting which bills are necessary to stay in business. Eliminate the others and then create the budget to ensure all expenses are covered while also allowing you to build a reserve.
There are several ways to drive extra revenue, which will help pay off business debt. While you work on a plan, remain cautious about sharing any kind of financial information with others. Word travel fast and if anyone gets the hint about a financial issue it can hurt your business.
“Increase revenue sounds so basic, but it’s very simple. Sometimes you can do so without tapping into extra funds. Most businesses have a database of customers, so why not reach out to them with a specific offer. If it’s appealing enough you can see an influx of revenue almost overnight,” says Christopher VanDeCar, CEO of Optimally Organic.
Have a sale
You can quickly put together a sale for both new and existing customers and tap into your CMS and send out an offer like mentioned above. “Ask for referrals to get more clients or offer discounts for a successful referral if you sell a service or send out a discount code to your email list if you are an e-commerce store,” says Luqman Khan of Wireloo, a website that just names the best grill pan 2018.
Cut back on charitable giving
When your business is facing hard times, you should slow down on charitable giving. Helping others is nice and admirable, but you have to think about your business first. If you free up additional dollars then it will help to get your debts paid off faster. Once you are free from debt you can start giving again to the charities you support.
Consider debt consolidation
The next choice available is debt consolidation. This should be your last resort, as it will often require you to miss scheduled payments in order to build your case for assistant stronger. This will ruin your business credit and personal credit, so be cautious.