Debt is the enemy of every profitable business.
Whether we are talking about Fortune 500 companies or simple mom and pop retail operations, the weight of outstanding debt can pull even the most promising business ideas down into the depths of bankruptcy.
However, debt is not a static situation. In fact, the basics of getting out of debt and staying out of debt are the same in pretty much every situation. So, whether you are struggling with newly acquired debts or have been building those obligations over many years, there is a path that can get you to the other side of the rainbow.
If you are looking for help getting rid of your business debt, these six simple tips offer a perfect starting point to get your business profitable again.
Increase Income
The most obvious way to pay off a debt in any situation is to start bringing in more money so that you can make larger payments towards your outstanding obligations.
In many cases, advice like “just make more money” is going to be much easier said than done. But if you have the ability to increase the revenue coming into your business, that is always the best place to start your journey towards a debt-free operation.
Clean Up the Easy Stuff
There are typically two schools of thought when it comes to getting out of debt, and one of the most popular is to focus all of your effort on the debts that will be easiest to pay off first.
Taking this approach will quickly lower the number of outstanding obligations you have hit the desk each month, and it will allow you to build up some momentum before you start getting after the larger accounts on your list.
Focus on the Difficult Debts
An alternative approach that appeals to some business owners is to tackle the biggest, most intimidating debt on your books first. The idea here is that getting the biggest monkey off of your back first will make cleaning up all of the other ones a whole lot easier.
Make More Frequent Payments
No matter which approach you decide to take, one easy way to start hacking away at the principal owed on the debt you choose is to make as many payments as possible on that debt as often as possible.
Waiting till the monthly payment is due will limit you to only one chance each month to mark your progress. However, by making multiple payments each month, you will be able to record more small victories to keep your motivation up as you work your way towards financial freedom.
Negotiate Your Interest Rates
Another way that you can help your business get itself out of debt quicker is to stop letting those outstanding balances grow on account of the interest expenses.
In many cases, simply asking for a reduction in the interest rate will get you a huge discount on the total amount you will have to pay back. In other situations, you might even be able to transfer the debt to a lower interest rate somewhere else.
Stop Taking on New Debt
One critical thing to remember in any journey towards a debt-free business operation is that everything will be lost if you continue to operate the business in a way that permits you to take on new debts.
Debt is the sworn enemy of a good business, and you must believe that down to your core if you are ever going to find your way out of the rat race.
We live in a work where debt is very common, but we also live in a world where those common debts are choking the life out of what would be very successful businesses. You have another option, and the first step towards getting there is following these simple tips.
