If you are a business owner, money and debt may be a continuous issue. When you encompass significant business debts, you have minimal options of what you can do to eliminate your debt problems. You can cut back, expand, or go out of business.
Featured below are several different ways you save money on your business’ overhead:
- Control labor costs. Evaluate your employee situation and make certain that you are not overstaffing your business. Another consideration is to determine if the cost of labor can reduce by making an employee and independent contractor, thus eliminating insurance, benefits and tax withholding out of the labor equation. Utilize a voicemail system as opposed to a receptionist.
- Reduce overhead. Reduce entertainment and other perks, compare insurance carriers and cut back on travel expenses. Cutting back on travel means staying at less expensive hotels, traveling by car if possible, etc.
- Reward productivity and efficiency. Reward your employees with bonuses when they help the business by pointing out money saving areas that may have been overlooked by you and the other powers that be. Also, let it be known that employees will benefit with pay increases and bonuses for high work output.
Even though it may seem ironic, one method for a business to get out of debt is to fall more into debt. More specifically, by applying for a small business loan, not only will you satisfy your cash needs, you have the option of growing your business.
There are a variety of personal loan options for you and your business. It is important to note that when you utilize business financing, that you make certain your loan is not going to bolster bad business practices, but will instead allow you get through an unexpected money crisis.
Below are some of the more common type of business loans.
- Purchase order financing – A borrower can receive advances on selected purchase orders that can be repaid directly by the borrower’s customer. This type of can be especially convenient for larger projects or when you need to borrow only occasionally.
- Accounts receivable financing – A revolving line of credit that is based upon your accounts receivable. This type of loan helps speed up cash flow and is dependent upon how much is owed to you and the probability that you are going to be repaid.
- Inventory loan Short-term financing that is typically utilized for taking advantage of appealing purchasing opportunities or to sustain seasonal increases in inventory.
- Fixed asset loan As the name says, these loans are based on your assets. Typical use is for acquiring additional equipment and for improving your business’ financial situation by increasing work capital, consolidating debt, and reducing monthly payments.
- SBA loans The federal Small Business Administration guarantees loans made by banks to small businesses. Approval for these types of loans is pretty simple and they also have desirable interest rates and terms. Being that the federal government guarantees these loans, banks like to issue them.
Following the advice above should help you with your business debt problems. However, it is also important that you keep business and personal debts separate