Drag Your Business Out of Debt and Into Financial Peace of Mind - Written by: Ed Carter of ablefutures.org

Photo by Mikhail Nilov via Pexels

Just like personal debt, business debt can pile up faster than you realize, leaving you confused and in desperate need of a way out. Beyond figuring out how to emerge from debt, why not learn how to improve your company's financial health at the same time? Here are some tips to help you do just that. 

Create a Budget
Prioritize creating a budget so you better understand your current financial situation. Focus on where your company's money comes in and goes out. You should also account for daily, monthly and annual spending. If you already have a budget, you may need to rework it. Your business needs change over time, and your budget should change with them.

Reduce Expenses
While drafting or tweaking your budget, look for ways to reduce unnecessary spending. Which expenses, operations and services do you need most right now to keep your business operational and take care of your customers and employees? Look for services you don't use, professional memberships you can temporarily suspend and supplier prices to negotiate. Besides your budget, use financial statements to identify areas where you can cut spending.

Boost Revenue
Accelerate your way out of debt by looking for opportunities to boost profits. Well-chosen services or products that complement your current offerings make it easier to convince your customers to spend a bit more. You may be able to slightly increase or decrease your current prices to increase revenue. Make sure you communicate your plans with your customers before setting changes in motion so they have a chance to offer helpful input. 

Consolidate Debt
Depending on how many outstanding debts you have, you could be juggling several interest rates or different payment dates. Wherever you can, consolidate your debts so you only have a single interest rate to worry about and few monthly payments to deal with.  Has your business or personal credit improved? If so, now could be an ideal time to consider refinancing high-cost debt. No matter if you consolidate or refinance, read over your new agreement's terms carefully so you know what you're getting into and what to expect for loan terms, interest payments, penalties and fees.

Think Long-Term
Forming an LLC could boost your financial standing. The business structure offers tax benefits that could help you when tax season rolls around. Because LLC regulations differ from state to state, research your area's latest rules before moving forward with this suggestion. If you don’t know how to form an LLC, prefer not to handle all the heavy lifting yourself, and pay substantial legal fees, consider enlisting the help of a trusted formation service.  Also, given the vast amount of know-how that goes into running a successful business, you should do everything you can to give yourself the inside track. Pursuing an online degree in business is a great way to boost your career by learning the tips and tricks used by other business professionals to maximize profit and reduce debt.

Work With Financial Professionals
Experts recommend that working with financial professionals such as the SCORE Association lets you take advantage of no-cost business counseling, online workshops and mentoring. Accountants, bookkeepers, financial advisors and other professionals also help you understand how to improve your financial health, stay on top of tax and other financial obligations, and get (and stay) out of debt.

Streamline Wherever Possible
One easy way to help build cash flow and ultimately help boost your long-term cash health is to use an appointment reminder system to make sure nobody wastes business time and resources by missing meetings. There are other ways you can streamline business operations, as well. For instance, if and when you find yourself emailing complex, lengthy documents, use online tools to compress a document into a PDF, which will lower storage space and improve readability
.
Switch to Paying With Cash
If you have a business line of credit you use often, consider setting it aside and paying with cash. No matter if used for business or personal use, credit cards can drag you down into the depths of debt with only a few swipes or online purchases.  With hard work, determination, and the right tips, you can pull your business into the clear. Learn to take control of your debt before it takes control of you and your company.
​
This article was brought to you by Take it to the Edge Marketing, where it is our desire to provide excellent sales, marketing and consulting services and products to small, medium sized and start-up businesses while maintaining the highest levels of customer service, integrity and professionalism at the most affordable cost possible. For more information, contact us today!