Ease your business debt

Running a SME can be a challenging process, but running a small business in financial woes can be a truly frustrating experience. No business owner wants to become a victim of debt, but what can you do to overcome your financial hardships?

Debt can be caused by a range of issues from bad spending habits to irresponsible bookkeeping, so we've sourced eight tips that can help you dig your business out of debt and improve your business efficiency in the process.

Review your budget

Your budget won't always be 100 per cent accurate, but it will give you an indication of where the business is heading.

It's important to consistently review your budget regardless of how your business is positioned, but it's a necessity if you are struggling to meet your obligations to creditors. Make sure that your business's cash flow is healthy enough to meet fixed monthly repayments and then allocate any left over budget to your priority debts.

Price over luxury

Finances can be hard to come by when starting a small business and in some cases it can be your spending habits that will be a strong contributor to your debt. Therefore it's important you save money wherever you can, especially when starting up. Even small changes can make a difference, such as bringing your lunch from home or commuting to work and meetings via public transport.

Switch to cash payments

Bad spending habits and a credit card generally don't mix well together. Although credit cards can be a good and convenient option when your cash flow is going through a slow period, the convenience of the card can also be damaging as many owners find themselves making continuous purchases on the card without ever tracking the debt that accumulates.

However, if you do feel that your credit card is a necessity, here is an article that can help ensure you use your card responsibly.

Look for more work

Starting up your small business can be hard; building your small business brand can be even more difficult. In some cases the best option to avoid debt may be to work a second job to confirm the financial security of your company. Juggling another job with your current business responsibilities is a less than ideal solution, but sometimes it can be the difference between overcoming debt and submitting to it.

 

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