Even Warren Buffett, one of the richest people in the world today and definitely one of the most famous investors believes that being in debt is something that you should avoid. However, if you are already running behind on your account and you have some money you owe to the banks, there is not much to do but to try to recuperate from it.
Truth be told, it’s really hard to stay out of debt in the business world today. But knowing how much money you can loan and knowing the best way to spend it will definitely help. Trouble is, most of business owners fail to avoid falling into a debt spiral and end up giving all the profit they make on interest rates. And that’s not a very representative way to run your business, isn’t it?
So, what to do in order to get out of debt and quick?
Consider Other Ways of Dealing With the Debt
Paying off debt only out of regular income sometimes just won’t do it. Plus, taking this route may take much more of your time to ultimately put back what you initially raise from the bank.
Luckily enough, there are alternatives to this. In addition to the fact that they could pretty much prove workable for your company, it’s important that they don’t mean raising more money, ie., refinancing existing debt.
That being said, one route you can consider is consolidating debt. By doing this, you will ultimately end up paying one interest rate and one consolidated debt instead of paying for a number of smaller debt payments and differing interest rates. There are many companies that offer this kind of services. You can read and inform yourself a bit more about this option here.
Cutting Company Expenses
Less popular measure you can take is cutting operating costs of your business. This may imply even for cutting down wages of your employees, reducing bonuses or entirely removing bonus scheme structure in the company or paying less for overtime for example.
Alternatively, you can opt for cutting down expenses by resorting to less expensive ways of transportation (if you’re having field workers on your team and you’re paying for gasoline and car rentals) or by booking less expensive hotels (perhaps you should opt for motels or apartments).
It is understandable that this may negatively impact the morale of your workers but the necessity of these actions should be explained to them. At the end of it all, it’s their workplace at stake also here.
To compensate a bit for current shortcomings, you can opt for smaller prizes and things that will console them a bit. For instance, you can treat them with occasional ball game tickets as a reward for outstanding performances during the last month or you can present them with their own custom challenge coin. Embleholics is where you should go to if you opt for the latter.
One way or another, getting out of debt is not an easy task. It takes a big deal of solid money management and skill to make the most out of company’s financial hardship. But sometimes the hard way is the only way there is.