If your business is in debt, you may fear that it could cost you your home and negatively impact your business’s reputation. Fortunately, your business debt isn’t always the same as personal debt. The Essential Creative guest blogger Laura Pearson shares how you can work hard to get your company out of debt and take steps for a better future.
1. Look Into Grants
Start getting out of debt with grants, which is money you don’t have to repay. There are many grants available for certain industries. Research your options and see what your business qualifies for since you might be able to find money that helps you get out of debt. Don’t forget to look into both private and government grants.
To qualify for grants, you’ll need to have a stellar grant application that includes a copy of your business plan, in most cases. Spend some time updating and perfecting it.
2. Reevaluate Your Budget
You might reevaluate your budget at the beginning of every year. However, that’s not enough if your business is currently struggling with debt. Now is also time to analyze your budget and find any expenses you can eliminate or lessen.
3. Consider Consolidating or Refinancing Your Debt
If you have multiple debts, think about debt consolidation. With this option, all your debt becomes one large debt. For one, this makes your debt easier to address. Additionally, when you consolidate, you can often lower your interest rate.
On the other hand, you could refinance your debt. Refinancing may decrease your interest rate and monthly payments.
4. Restructure as a Corporation or LLC
If your business isn’t currently registered as an LLC or corporation, you could be missing out on the tax benefits. Each state has different rules and requirements for filing, so make sure you check them before moving ahead.
5. Use New Marketing Techniques
As you evaluate your business, look into your marketing. It might be time to enhance your efforts to reach more people and increase your profits. If you’ve exhausted your marketing funds, look into inexpensive ways to get your business more exposure.
For instance, you could use social media to get the word out about your business locally, nationally, or even globally. Improve your visibility by using SEO to optimize your website and any content you produce. Consider hiring a company to assist.
Additionally, you could offer incentives for referrals to generate more business.
6. Revamp Invoicing
If you’re having a tough time getting paid on time, you may need to upgrade your invoicing process. Invoice customers immediately, set clear payment terms, and accept a variety of payment methods. To design a customized invoice, use a trusted brand such as Adobe’s Creative Cloud Express invoice templates online. Using a branded invoice could even help market your business.
If you are bringing in money consistently, consider using software such as Honeybook, Dubsado, or PayPal to do manage your invoicing. This will keep things consistent and take the pain of sending reminders out of your hands by using automation.
7. Prioritize Your Debt
If you have to choose what to pay immediately, focus on debt that accrues high interest. Prioritize business insurance, taxes, and any other debt that could harm your company.
Keep in mind that you may be able to negotiate with your creditors and make alternative payment arrangements.
Get Out of Debt and Thrive
By taking certain steps, you can get your business out of debt. Plus, when you improve your marketing, you’ll not only address your financial problems, but your business may potentially grow in the process.
Laura Pearson is passionate about teaching and loves writing to help teachers, parents, and students. She is passionate in advocating that learning should be fun and should not just be confined in the classroom. Edutude is her brainchild to be able to share free resources for teachers and parents.