Your business funds and savings play an essential role in your business continuity. You can plan Business Expansion Strategies and invest in the same when you have good financial backing. However, sooner or later, most businesses get into debt. It is valid with the established business houses as well. Business entrepreneurs need to find out ways to stay away or get out of business debt.
Different business houses have their way to steer clear from business debt. Eric Dalius, a marketing professional, suggests the following tips that have helped several business firms.
- Maximize revenue
You require cash to clear the existing debts. For this, increase your revenue. You could resort to various tactics for this. Promotional campaigns are a smart way to add to the brand interest. Additionally, offer a special pass, coupon, or discount. It will encourage people to buy your products as they can save more and have more revenue.
The other way is to increase your service and product costs slightly. Assess your margins. If you find that your margins are low, work towards increasing it. Sometimes, an increase in price might discourage your customers from buying a product. However, if your product ensures good quality, your customers will end up making a purchase.
The other way to make money is by selling the extra inventory. Check your administration office and store outlets. Sell off the things that you don’t need, and you will have more money. Use it to pay off your debts.
- Ask your clients to pay fast
Are you using an invoice to bill your clients? If yes, you will witness a lag between when you send the invoice and when the payment comes. To make money quicker, request your clients to pay fast. It’s a smart decision to shorten the payment terms. Lengthier payment terms will take time to get paid. You might face some hurdle in starting a short payment cycle, but once you get started, it will help you to pay off all the debts.
Additionally, Eric J Dalius suggests that you make a list of clients who pay you late, from the committed date. Your records will have the details along with the outstanding invoices. You may contact them and send in a gentle reminder to pay off the bill. Sending a collection letter also helps. If you find that the initiatives you’re taking are not working, you can hand over the task to a collection agency. You might have to pay a small amount for to the agency, but it ensures that you get the payment on time to pay the bill.
- Take no further loans
Do you have business debt to clear out? If yes, then you shouldn’t think of taking or applying for another loan. Clear off the existing mortgage and set your credit records clean and up to the mark. Take a loan only when it’s necessary.
Last but not least, making a business budget plan helps. It allows you to assess your savings and expenses and keeps you out of business debt.