How Businesses Should Manage Their Debt

how businesses should manage their debt

Businesses need to know how to manage debt if they are going to be successful. In many ways, this is even more important than making an income; businesses that are bringing in money might be unsuccessful overall if they are too far in debt and so all of that capital is lost. People who specialize in this industry have full time jobs trying to keep debt in check. For example, if you look at the Scott Gelbard Apis Ventures profile, you will see that he has been working in this industry for 25 years. If you are a business professional, there are a number of things that you need to keep in mind as you run your company.

Do Not Let The Debt Feel Overwhelming

You need to know how much debt you have, but do not get too caught up thinking about it so that it seems like you will never get out from under it. This makes it seem overwhelming, and it can cripple your efforts by making you afraid to do anything. Instead, set smaller, reachable goals and then put your time and effort into getting to those goals. If you work at the debt piece by piece like this, you can eliminate all of it eventually.

Understand That You May Have To Curb Spending

Some business professionals make the mistake of thinking that the only way to get out of debt is to sell more. They want to increase their income and they do not know what else to do. If sales are lagging, though, this could be impossible. What you may really have to do is to figure out a way to curb your spending. If you cut down on what you spend, you can get more out of the income that you are already getting. You can make it go farther.

Consider Looking For Investors

Sometimes, the best way to get out of debt is to find an investor who believes in your company. You can get the money that you need from him in exchange for a portion of the control of your company. You have to let the investor be part of things going forward, which is how he will get his money back, but he can give you the cash that you need in the short term to get rid of your debt and start fresh.

Make Every Penny Count

A big thing to do is to make every penny that you do spend count for something. Go over your budget and see where you may have been wasting money in the past. If the money is not getting you anything or helping you make sales, you should save it, cutting those areas of spending. Often, businesses spend quite a lot of money on things they do not really need without realizing it.

Have Confidence In Yourself

Your mindset is very important in situations like this. You have to be confident that you can do what it takes to get out of debt and get your company moving in the right direction once again. If you have this outlook, it helps you do what it takes. Otherwise, if you already feel like you have been defeated, you are more likely to end up there when all is said and done.


    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 01/21/2014 10:35 a.m. #

      Do not let debt overwhelm you is a great advice - for both personal and/or business debt. Feeling overwhelmed and paralyzed are certainly common and understandable reactions but they don't help you get out of debt. And the more overwhelmed people feel, the harder it is to take action. As you said, they need to know the extent of their debt and how you got into debt, but don't dwell upon your mistakes. Learn and move forward.

      • Sicorra

        Sicorra 01/22/2014 2:30 p.m. #

        Thanks Shannon!
        Feeling overwhelmed\scared about how much debt you have certainly can paralyze people which only makes things worse. For a few years we actually let our debt control us and that simply prevented us from taking action. Once we stopped crying about it and started taking steps to resolve the situation the fear disappeared.

    • Corina Ramos

      Corina Ramos 01/21/2014 9:39 p.m. #

      This is great advice Sicorra. I try not to be overwhelmed with my debt...but the good thing about having an online business is there isn't much debt accumulated versus a brick and mortar business. So the headaches are minimal :).

      Any money I make I keep it for my blog and I'm very careful about what I spend.

      Hope you're having a great week my friend. Let's catch up soon!

      • Sicorra

        Sicorra 01/22/2014 2:33 p.m. #

        Excellent point Corina! Brick and mortar businesses have to deal with overhead expenses. A person that runs a business online, out of their home, may have a few overhead expenses depending on the type of business but nowhere near as much.

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