No small business owner wants to deal with debts. But unfortunately, debts are a fact of life for many entrepreneurs, particularly if you run multiple businesses. However, with the right strategy, it’s entirely possible to pay down your business debts so that you can boost your cash flow and enable your company to thrive. We have compiled 5 step guidance through which you can begin paying off your debts on an accelerated timeline. In addition, these tips will show you how to eliminate your debts and improve your business’s overall financial health!
1. More Efficient Productivity and Time Tracking
In order to pay off your debts, you’ll need to identify areas in your business where you might be wasting time, and, therefore, wasting money. Intuit Field Service Management can help you accomplish this. This platform not only incorporates better time tracking for your staff but also allows real-time updates from employees on the ground with GPS mapping and even equipment performance. This, in turn, lets you schedule field jobs more efficiently and even invoice customers in real-time. This can be especially effective for targeting inefficiencies as you get visibility of the work performed as they are performed. And as a bonus, mobile app functionality eliminates the inefficiencies and delays of paperwork.
2. Communicate With Creditors and Lenders
Getting in touch with your creditors can help you pay down your debts faster. Your creditors might be open to coming up with favorable repayment plans – but you don’t know if you never ask! Money Management recommends making the creditor a generous offer to pay down a settlement account and being willing to negotiate with them. You could hire a debt settlement firm for this process, but negotiating on your own is cheaper and simpler.
3. Come Up With a Debt Target Plan
Once you’ve determined how much you’ll need to pay on each account, it’s time to decide which debts to focus on first. Debt recommends prioritizing secured debts and debts that you have guaranteed personally, as failing to repay these debts could end up affecting your personal assets. Next, you can focus on paying down other business debts, especially loans with high-interest rates. This will allow you to save more money in the long run.
4. Reduce Your Expenses
How can you come up with more money to pay off your debts? Reducing your expenses should be your first step. Go over your business budget carefully and note any areas where you could afford to spend less without sacrificing the quality of what you offer your customers or clients.
Could you reduce your inventory? Do you really need subscriptions to certain software programs? Could you work with freelancers for upcoming projects rather than hiring more full-time employees? Do you genuinely need a large brick-and-mortar space, or could your team work remotely? These are all important questions to ask as you minimize your budget.
5. Increase Your Income
Increasing your company’s gross income can be challenging, but it is also the most effective way to pay down your debts in a timely fashion. It’s time to look into strategies that will enable you to bring more money into your business. For instance, do your competitors generally charge more for their products or services than you do? If so, it might be time to raise your own prices accordingly. You could also invest in low-cost marketing strategies like social media marketing or email marketing to reach new clients and generate leads. Finally, think about how you could prompt more sales from long-time clients or customers – it’s easier to sell to loyal customers than new customers!
Dealing with business debt can feel discouraging. But your business’s debt does not have to be a permanent problem. With these tips, you’ll be able to get rid of your debts and fund amazing new projects with your additional cash flow!
Are you ready to tackle your business’s debts? Our experts at DBi can help you with bookkeeping and tax law. Reach out to get started.