Often business debt is a solution to a lack of capital or to cover operational costs so that it is hoped that the business will run more smoothly. Even though trade debt plays an important role in the survival of a company, debt will often have a bad impact if it is not managed properly. As a business/company owner, of course you are obliged to manage business/company debt. So how do you manage debt for business?
How do you manage debt for business?
- Thread starter Suba
- Start date
When I first started my business, I was lucky, it was financed by my brother who works abroad. nd in my second business now which is a milky business, I saved money to pay the franchise fee and was able to start my business with my own capital.
One way to manage your business and prevent it form going into debts is by purchasing only the things you need and hiring the needed hands. If all you need to get the job done smoothly is just 5 hands, then hire the five.
That's a very strategic way to avoid accumulated debts. They should be paid first. It's good to retrench workers to set aside money for debt paying.
The best to manage debts is to cut expenditure. I usually cut down those expenses that are unnecessary like keeping my light on during the night when I don't need, buy only goods or products customers always buy, stop eating afternoon lunch, I carry my food to my shop, etc.
That's a very good way to recover losses to minimize the use of electricity, water and even the expenditures must be systematically changed.
- Thread starter
- #7
In my opinion, not all debt is bad, so we don't need to be afraid of avoiding debt, so the key is how we can manage debt well. Debt can be leveraged on working capital so that debt can be a driving force, business can run effectively and efficiently, lack of capital can disrupt your business. Besides that, debt will also reduce your business income tax.
It is always better to have certain amount of money set aside for your business to strive and you should always try not to take too much of the loans in the running of a business because it could be detrimental.
Loan is not really good and it can put the business into serious debt and that is why it is very necessary to assure you consider not taking loan for a business most especially if it is a new one.
To manage debts, you need to reduce business costs. Be wise about where you cut costs. Increase sales revenue; Keep a close watch on your cashflow. If you cannot repay your debts, re-negotiate the terms with your bank.
I once had a business and I was able to manage debt by reducing the way people owe me money so that i will not go bankrupt
Post automatically merged:
I once had a business and I was able to manage debt by reducing the way people owe me money so that i will not go bankrupt
I am happy that you started to have these businesses. I have not tried to have a business physically. The online business is just an accident venture during the pandemic and hopefully, it will boom.
It surely booms just plan well the best marketing strategy to employ to gain more customers online. Sell the best so people will keep on retuning to your online business.
One way to manage debt is not to delay payments when the money is already there. Sometimes when people have more money they are tempted to buy things that are not so important and forget about debts.
