Whether you’ve relied on installment loans, business credit cards, or even personal debt to get your business off the ground, it’s stressful when the bills start rolling in without enough revenue to cover them. However, you have options. There are many ways you can manage your business debt and try to get your business on track financially.
One option you may consider if you’re in over your head is bankruptcy. If there’s simply no feasible way for your business to be profitable, this may be the way to go. Learn more about what this means by connecting with Padgett & Robertson. Call us at 251-336-3695 to get started.
Trim Down Your Operating Expenses
You can start by trimming the fat off of your operating expenses. It’s easy to invest in tools, services, or products that your business doesn’t need, simply because you think they will make daily operations more convenient. Look into monthly subscriptions you have and try to figure out if they really provide value to your business.
If some options are on the cusp of both, find out if you can downgrade to a lower-level plan. For example, you might look into business phone plans, cleaning services, social media automated posting services, and entertainment expenses. By lowering your budget for your company expenses, you can put more money toward debt.
Boost Profit Margins
There are two ways to get out of debt: spend less money or make more money. This tip focuses on the latter. If you can bring up your revenue to the point that your debts are more manageable, you’ll be one step closer to getting the debt paid off. If you’ve been sticking to one or two marketing strategies and they haven’t been quite as successful as you’d hoped, maybe it’s time to try something else and branch out.
If what you’re doing isn’t working, spending more money on it is simply throwing money down the drain. If you have employees who are involved in the day-to-day work of your business, talk to them about what they see in their daily work. A lot of employees who run daily operations have great ideas about retaining customers, bringing in new clients, or encouraging each customer to spend more.
Streamline Your Debt
For many business owners who have more debt than they’d like, it isn’t all in one tidy loan with one monthly payment. Many have a mix of installment loans, working capital loans, credit cards, and more. It is very difficult to juggle this many payments, especially if any of your debts have variable APRs or high fees.
If some of your debt has high-interest rates, this could be the time to look into loan consolidation. Not only can this save you a considerable amount of money over time, but it also allows you to take multiple due dates and turn them into one easy monthly payment. You’ll be less likely to pay late and incur additional unnecessary fees.
Plan for Your Financial Future
As you look at your current financial state and think about where you want to be, this is the time to make sure you are setting yourself up for the future. Do you have extravagant spending habits in general? Do you have a tendency to commit to large purchases before running the numbers, expecting your profits to cover the expense? Are you regularly making financial messes that you expect “future you” to take care of?
If your overall financial habits are unsustainable, it isn’t enough just to pay off your existing debt. Unless you grapple with the underlying issues, you’ll end up right back in debt before long. Take some time to attend a financial literacy course, learn more about triggers that can lead to unnecessary spending, and create a reasonable budget that you can actually stick to moving forward.
Explore Bankruptcy Options with Padgett & Robertson
Perhaps you’ve tried multiple times to get out from under your debt, and you are out of time, money, or both. If so, bankruptcy could give you the fresh start you’re looking for. Ready to find out if it is a good fit for you? Call Padgett & Robertson at 251-336-3695 or .