Throw your business a lifeline: Options for managing business debt
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- Clarke Bell
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Realising that your business is in debt can be a worrying find. A business that is in debt needs to act as soon as possible, because the more that they bury their heads in the sand, the worse it will be. Realising that your business is in a lot of debts does not always mean that you must declare bankruptcy. Bankruptcy is only a last resort and it isn't the only way that you can stop the mess that you are in.
One of the things you should do is think about slashing your budgets. You might want to downgrade to a small office space, or go virtual and work from home. Make sure that you analyse all of your overheads and figure out what you could save money on. There are lots of things that you could cut out on. Perhaps you also want to look at the transport in your company, which usually eats up a lot of the budget. Try to think about where you could save money, perhaps you might want to be rid of a few company cars or ask people to pay for their own travel in the company when going to meetings.
You might also want to negotiate with creditors. If you have a lot of debt, then you could try to strike a deal with your banks and lenders to see if you can have extra time for repaying the funds. Many banks say that if you are honest and upfront, they can help you with negotiating a better deal.
Another thing that you might want to do if your business is in debt is secure new revenue streams. You might need to get another job or even figure out how else you can sell your business to other areas around the globe. Developing a better website might be the top of your list, so that you can appeal to a wider range of people and tap into an unused target market.
One last tip if you are in a lot of financial misery is to break any bad financial habits you already have. Try to stop things like buying things for your business with a credit card, and also put a stop to things like extra travel expenses and dinners out with business partners. You might not think that this will make a difference, but it really can help you if you are in a difficult financial situation.
If you’ve tried to solve your problems yourself and you find that you are still no better off, then it may be a prudent idea to seek debt advice from insolvency practitioners or a debt advice charity. Most offer a free consultation that can provide some valuable insight into the steps you need to take to resolve your situation, so you have nothing to lose.