Start your own business is a unique and extraordinary experience. But when the going gets rough and suddenly you realize you’re trapped in a storm of debts which seems impossible to get out, that’s when you need to take drastic actions and decisions urgent sense.
Today I share 10 tips that you can start practicing today to get out of debt and restore your business. Says an old saying that, half the solution is just to recognize the problem, and on the issue of debts, this is fundamental.
What has led you and your business to the situation where you are?
The reasons why many businesses come to be in financial difficulties to the point of being at risk of bankruptcy can be varied:
- Changes in market conditions
- Global crisis situations that directly affect your business.
- Political decision variables such as fiscal conditions or policies of import and export.
- Delinquency
- Loss of important customers
- Mismanagement of funds
- Negligence
However, it is regrettable to recognize that the main reasons why companies experience serious debt problems are usually the last two: negligence and mismanagement by your managers and administrators.
Whatever the reasons, it must be clear that getting rid of debts may take time, and the longer miss to start acting the effects may be worse. So I recommend you, after you finish reading this article, take pen and paper and start taking some important decisions to get out of debt:
- Debts identify what actually causes that is affecting your business.
- Analyze immediately and thoroughly your monthly budget. Identifies the monthly fixed expenses that are absolutely essential and eliminates others.
- Elaborate a snapshot of your debts (liabilities). This is a complete summary of all the debts you currently have. This will be your real passive state and is better being very clear from this moment, to project a realistic plan.
- Negotiate with your creditors. One of the most important steps in either get out of debt is negotiation, the pressure from creditors usually very strong especially when they do not receive a penny from you. However, you will be surprised how willing are many of them (especially the larger ones) to recondition your debt if you approach openly negotiate and seek support payments.
- No try to settle a debt with another. Another common mistake we make when we have so much pressure is pretend pay debts by borrowing or using credit cards. This is too frequent temptation to be avoided at all costs.
- Record immediately ant expenses. This point is directly related to the No.2 spot, but I mention it separately in order to highlight the importance of cutting strongly all those little expenses that are barely noticeable but which together consume a very large amount of valuable cash payments.
- Evaluate and adjust your payroll. Unfortunately, in difficult times, it is desirable and urgent to review the payroll. Of course, without valuable staff it is not what we all want, but one of the required measures when the survival of the company asks him loudly. It analyzes the positions and seeks an intelligent redistribution of work so you can keep doing the same with fewer people.
- No promise something you cannot deliver. The problem when we want desperately to get out of debt is to commit (wrongly) with our creditors to meet at a certain date or certain amounts, knowing many times we cannot afford in these conditions. That’s a bad habit that must stop to avoid losing even more credibility.
- Vender more, spends less. The optimization of resources should be a constant habit. But to get out of debt, is a compulsive habit. If you do not have enough sellers left the desk and go outside to get more sales, more customers, more business remember that comfort is the enemy of successful businesses.
- Learn necessary changes course. Finally you should be prepared even to change the direction of your company. If your current business conditions have changed, if your exchange market if the possibilities to continue operating are far healthier, then you must be willing to consider a change of direction. Whether you consider another line of products, another kind of business or a new venture, this is entirely valid and acceptable. Just make sure you meet your commitments and then tomato Planer time to take the plunge and make the changes you deem appropriate in your business.
While these tips are very practical and I’m sure they’ll help you rescue your business, you must be very clear that will not be easy. In fact, a lot of strength to get ahead and support the grievance is required, often the shame and to the weight of the conviction of those close, but ultimately is a price to pay. Regarding the failure, do not worry. Failure is only part of the curriculum in career success.