Managing your business can take most of your time, however, if you have a ton of debt, it can divert your focus. Instead of finding and implementing solutions to grow your business, you are constantly worrying about where you are financially. To achieve a healthy balance of paying down your debt while focusing on the needs of your business, here are some steps to take:
Accept where you are financially
You need to make peace with where you are financially. This means not feeling guilty about how you got into this position. Instead, understand and accept where you are, as this can save you time and energy from anguishing over past decisions.
Develop a budget
Make a budget, and look for expenditures you can reduce or eliminate. This will free up cash to pay down debt or give you more cash flow for business expenses. Its also important to re-assess your finances regularly to see if you are sticking to this budget.
Settle your debts
Next, you want to make a list of all the creditors you owe, and then devise a plan to pay them off as quickly as you can. The best plan of attack is the debt snowball plan. You start with the smallest debt you have and make every effort to pay that off quickly, while you make minimum payments to your other creditors. Once you pay off the lowest debt, continue to move up the ladder until you pay all of your bills. This approach helps you build the confidence and behaviors needed to become debt-free quicker.
Seek assistance when necessary
Sometimes it helps to receive a fresh perspective on your finances. You can schedule an appointment with a reputable consumer credit counselor, as they can assess your budget and make recommendations on where to cut your spending. They can also enroll you in a debt management plan where you make one monthly payment to pay down your bills. This is a great approach because it can help you have peace in knowing that you are paying down your debt, which can help focus more on your business.
Use credit wisely
Credit can be a blessing for business owners if you use it in the right circumstances. For example, if you receive a chance to invest in a great opportunity or expand your business, credit can make this possible. While each prospect may be enticing, be sure to invest in opportunities where you will receive a return on your contribution.
Find ways to raise capital for your business
The U.S. Small Business Administration (SBA) offers a wealth of information that can benefit business owners, from advice on running your business to financing. One of their best tools is the Loans and Grants Search tool, which can help you find financing programs. They also offer grants to start-ups.
Meanwhile, crowdfunding is where you can raise funds for certain projects through an online campaign. To accomplish this, you would want to start a campaign on a website like Kickstarter, where you would state your project, why its important and how much money you need to raise. From there, visitors to your page can make donations to your project until you receive all the funding you need.
Growing your business while tackling your debt can be a juggling act. However, by devising a solid plan and sticking to it, it can help you pay off your bills while allowing you to focus all of your attention on growing your business.
Peter Martinez blogs about small business and personal finance for Americas Debt Help Organization Debt.org, which helps Americans, get out of debt.