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How to Dig Your Business Out of Debt and Get a Fresh Start.

October 3, 2017 by  
Filed under Money/Business, Weekly Columns

(Akiit.comIs the pile of debt starting to weigh your business down? You’re certainly not alone. Businesses nationwide are filing for bankruptcy protection, and the numbers only seem to increase as the lenders tighten the reins on their borrowers. While bankruptcy certainly is one way to get yourself out of the debt hole, there are simpler and more reasonable ways to get your business back on track.

Here is a handful of the best options for small business owners who are tired of chasing those green figures, making your future look a bit brighter.

Cut costs and increase revenue

The first and most obvious step is also the toughest one. When you owe more money than you seem to be able to bring in lately, it’s clear to most business owners that costs need to be cut somewhere. They’re just not always willing to cut the kind of costs that would have given their finances a great boost. This includes office space, costly phone systems, employee benefits, and travel compensation.

It’s the hard truth that many managers don’t really want to face because it means that they, besides from having to downgrade to a smaller office or go completely virtual, needs to give up on their own benefits.

While your employees may be alright with not receiving bonuses and travel compensation when the alternative is losing their jobs, business owners struggle with giving up on their perks.

It’s a terrible habit and one that might bring your business to its knees so cut down on costs and learn to live without all that equipment you really never use in any way.

Have an earnest talk with creditors

Even when you’re in over your head in debt, you still have the upper hand over the creditors – as long as you’re planning on paying them, that is. By communicating with them and being honest about your business’ situation, you may be able to negotiate a better deal, and your credit score will soon be climbing upwards again.

It’s a good idea to pay off as much as you can at once to get them off your back for good. Consider small business loans for minorities with bad credit as this gives you something to negotiate with, and might even enable you in climbing out of the hole for good. Make it clear that the more they are willing to reduce your debt with, the quicker you’ll be able to pay them back.

Just make sure you follow through with the agreement and make the down-payments as you said you would. Anything else will put your business in a terrible light.

Make a new budget

When you have a plan on how to pay down on your debt, and you’ve cut down on your expenses, it’s time to make the future so much better. Revise your budget immediately and make sure you don’t wind up in the same situation within a couple of years.

You’d be amazed at the number of business owners who spin back around as soon as they’ve made a bit of progress, only to dig their business deeper into debt.

Planning and budgeting is alfa omega when it comes to running a successful startup. Most of them fail due to bad financial planning, so you’ll be in a good position to do better than them in the future.

Staff Writer; Latasha Shaw

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