Do you direct a small company that is constantly indebted?
It is not alone, even the most skilled entrepreneurs, due to natural disasters and pandemics, have been found in a situation similar to a point of thought to avoid all forms of debt completely.
However, the debt itself is not a bad thing and is necessary when it executes a small business, but the way in which it is eventually administered can classify it as a bad or good debt.
Therefore, as an entrepreneur, you must obtain some skills on how to administer your debts and save your small collapse company due to uncollectible debts.
In case you are experiencing an accumulation of debts in your small business that can suffocate your cash flow, it is time to think about a management plan there are already some strategies that you can apply to control your debts or get rid of them:
First remember that your situation is unique and, therefore, not all debt management approaches will work for you.
Cost
If there is a safe way, you can find some cash to solve the debts of your business is to reduce your expense and here, any unnecessary cost must go.
This can be done, first, to divide costs with other companies sharing by transport, operation or office space, share resources such as the Internet.
Second, you can consider the reduction of personnel by reducing the number of employees, or moving to an office or a smaller operations base or a residential area if possible (home office).
Third, reduce commercial supplies and sell any other equipment that is not using instead of leaving them to collect dust.
Increase sales
This is another better way to manage debts in your business and here, you can consider some things, such as increasing the prices of your goods or services, which may sound strange, since you can lose some of your customers to a competitor.
However, if it season it with offers and discounts, especially for bulk buyers, your business can still be competitive.
You can also involve your customers on social networks when you make product consultations or ask any questions related to the services provided.
Remember, when customers offer good online views about their products or services, they can increase the confidence that can be translated into sales.
Then, you can try to reward your loyal customers, which can increase customer satisfaction and encourage them to recommend your products or services to your family and friends.
Refinance all your high -cost debts
Here, you must pay attention to any increase in interest rates of your loans, as this will have an impact on your finances.
For example, if you have a loan with M-Shawari whose interest rates were reviewed in the recent past, you must verify and compare with other loan partners, since this will help you know where to look for your loans below.
Rate increases occur at any time, therefore, it should consider refinancing any high -cost debt form.
In this, the commercial credit card debt can be consolidated or refinancing making a balance transfer to a new credit card.
Access and rework your budget
It is time to return to the drawing table and verify its budget plan whether or not it adheres.
Or, there could be something wrong with your budget that needs to be corrected. Here you can consult with experts to avoid making the same mistakes again.
Shorten the customer or client’s payment terms
There are those customers who request goods or services to pay on a subsequent date based on a specific agreement that can be after a month, two or three.
You can reduce the duration of the payment by explaining why and even try to offer discounts for early payments.
Know how to deal with creditors
In general, learn how to deal with creditors and lenders knowing that they are not against your business. Therefore, be open and honest about your current situation and you can also request the consolidation of loans.
Make a debt inventory
It is good to list your debts and who owes and what you owe and should be thorough and sincere.
Be sure to include all the interests that charge you and what you have paid so far and what you could have accumulated over time.
Write each credit line you have taken, including your credit card debt.
You can do all this, on a spreadsheet that aligns each debt for charged rates and monthly payments, then you can move to prioritize what debt you should pay first.
#Ways #administer #debts #small #businesses
