Read This if You’re Facing Small Business Debt
We hope you enjoy this guest article from Brittany Fisher, an accounting expert with FinanciallyWell.info.
Debt is no stranger to most business owners in general, but for small business owners, high-interest debt can mean having to close up shop. Today, the average small business owner is carrying roughly $195,000 in debt, and it’s only increasing thanks to the spike in interest rates since 2017. So what can you do to start paying down those debts and create a healthier financial future for your business? Here are a few top tips from Gage Advisory Services:
Generate More Sales
The main thing you want to focus on is increasing your bottom line. The more money you make, the faster you’ll be able to pay off those debts. If you’re not sure how to up your sales, a few things you can focus on include (but are not limited to):
● Creating a rewards program for loyal customers
● Offering special discounts for high-volume purchases
● Reaching out on social media platforms to increase customer engagement
● Browse through your accounts receivable to start collecting on what you’re owed
There are tons of things you can do to generate more business revenue — sometimes you just need to get a little creative.
Use Financial Tools to Manage Your Budget
One of the most important things a business owner is tasked with is creating and maintaining a budget. However, not every business owner understands how to do this efficiently for themselves or can afford to hire an accountant to take care of these things. So if you’re not already using a financial tool to manage your budget, it’s time to start.
You need a tool that allows you to track and monitor your expenses and income, as well as generate budget reports in real-time. This will give you valuable financial insight to help you make better spending decisions in the future and reach your financial goals sooner.
Better yet, if you need to revamp your accounting systems, working with a dedicated professional through Gage Advisory Services is a wise move. You’ll have full support in implementing and design of in-house or external software as well as help migrating from one system to another. With their help, you can position your business for better financial health.
Reduce Your Expenses
After viewing your current budget, you’ll likely see plenty of places where you can cut your losses. Start by focusing on the things you can live without, including vendors. Depending on how much debt you’re in, you may have to get aggressive with cutting your expenses. This could mean letting a few employees go as well.
Refinance Your Loans
High-interest loans are the plague of the 21st century. Luckily, there are plenty of programs that allow you to refinance your loans through consolidation. Consolidation means taking out a new, lower-interest loan to cover your existing debt, turning several loans into one. This also means one monthly payment rather than multiple payments which often helps alleviate stress. Keep in mind that refinancing doesn’t apply to everyone as it depends on your credit score and history.
Speak With Your Creditors
If you have business credit card debt that’s holding you back, the first thing you’ll want to do is speak with your creditor. They’ll likely be able to assist you in terms of lowering your interest rate, putting you on a hardship program, or even settling some of your debt. Keep in mind that while debt settlement is convenient, it can keep you from ever having a perfect credit score and may look bad to potential future creditors.
The bottom line is that there are plenty of options out there to help you manage and eliminate your business debt. If you are unable to manage your debt or find a solution, you may need to resort to selling your business.