As a business owner, the last thing you want to be worrying about is trouble with money, or even debt problems. You want to see your business thrive, impress your customers and in time, grow to a larger business. However, if you’re not careful with the money that you’re spending, you can easily fall into a lot of debt. The problem with business is that you need to spend money to make money. Whether that’s on materials for the products you’re making, or even buying the products you sell in from suppliers. Either way, money management can turn out to be problematic if you don’t keep your head screwed on. Take a look at these tips on how to ensure your business stays afloat and avoids debt problems.
Clear. Debt. Now.
Like seriously. As mentioned above, you have to spend money to make money in business, and if you’re in debt, you’re going to continue spiralling into further debt if you don’t take action now. As a business, you have the option to consolidate your debt with companies like National Debt Advice. They look at how much and who you owe it to, and take over the management of clearing your debt. The great part about it is that your repayment amounts will be much lower than before, and you will no longer receive calls and letters from companies that you owe. Also, if after five years you’re still in debt, it can often be legally written off, leaving you in the clear. Seek professional help to get yourself out of debt with your business sooner rather than later.
Rethink Your Outgoings
Sometimes money issues come from what you’re spending on your business. Take a look at how you can rethink and possibly reduce your outgoings with your business:
- Shop around for suppliers of products that you use. For example, if you use a particular stationary company for your office needs, see if you can find a cheaper deal with another company.
- Look at simple outgoings like your electric bill each month. Could that be reduced? Whether it’s making sure that everything is turned off rather than on standby each night, or even calling your providers and getting yourself a cheaper deal, there’s always a way to make a difference with your outgoings. More often than not, you will be able to get a business deal on utilities, so make sure you mention that your premises is a business.
- Cut back on over time for your staff. While the work may need to be done, forking out unnecessarily for wages will soon mount up.
- Are you paying for staff lunches or renting out rooms for business meetings? Consider cutting back on these things so that you’re able to get your business back on track and afloat rather than sinking. Even if it’s temporary, it will make all of the difference.
- If you’ve got any quarterly bills, try and change them to monthly so that the payments are more affordable than one large chunk every three months. Most providers are happy to change you to monthly billing if you ask. You’re also more likely to get a better tariff if you choose to pay monthly.
Rethinking outgoings such as above will help you keep on top of your money and prevent yourself from going into any (further) debt.
Make Crucial Decisions
One thing that all business owners have to do on a regular basis, is make decisions that you might not want to face. You may be lucky enough to have a group of tight-knit staff that work hard and well together, but you’ve always got to put your business first. Here’s some of the decisions you may be facing right now, and why you need to make them:
- Letting go of a member of staff due to over paying wages for no reason. As mentioned, it can be a very difficult decision to make especially if all of your staff are hard workers. However, not letting a member of staff go will damage your business outgoings.
- Bringing your business to a standstill for the time being. You might have plans to extend or introduce a new product, but if you’re in debt now isn’t the time to be doing this. Keeping your business running as it is now until your financial issues are cleared is the best thing for you and your business at the moment.
- Mentioned earlier, changing suppliers for your products or services can sometimes make the world of difference. Make sure you know what your target customers will and won’t pay for what you’re offering, and make the crucial changes for your business.
Following these tips will ensure that you can make sure your business is afloat and ready to tackle it’s next challenge! Remember that clearing debt before any other action is taken is essential for getting your business on the right path.