In the world today it is hard to find someone that is fully satisfied with the amount they make from their day job alone. As such, most people have side businesses that they run parallel to their normal day job to help them have enough for their needs and have enough to be able to save for future purposes. Other times people end up leaving their day jobs and venture into the business alone. With the business starting up most of the times it is a small business and most entrepreneurs end up getting into debts.
While most people have a belief that debt is healthy for any business, that doesn’t go without saying that any entrepreneur should try and do without debt in their business. Debt can be good but, only if the debt is a small one. But, when they debt is a big one then the entrepreneur is in serious trouble as that can hinder the entrepreneur from reaching the goal they had set out for when they started up their business. When the entrepreneur is in serious debt then they should consider ways of getting themselves out as quickly as possible so as to not have the debt tied down to the business and hinder the business from growing.
Check Your Credit Report
The first part of trying to figure out a problem is knowing the whole lay out of the problem before you can get into tackling it. Get a full report and all the information of what the situation actually looks like. The have a full idea of what the credit score looks like not just the business credit score but also your personal credit score. This will make the entrepreneur know from where they will start tackling the problem from because it can be hard to tackle two credits at once, if one is still strong enough to maintain then the one that is in the red zone should be given immediate attention. More so if the one that is in serious debt is the business account then that should be sorted out early enough.
List The Debts From The Smallest To The Largest
Most people think that listing their debts is one of the stupidest ideas in the world but, it actually works well for those that have tried. There is nothing more challenging and emotionally torturing then when one is paying off their debts and they don’t see as if the debt is reducing. Hence the listing comes in handy. When one starts paying the small debts that will mean they will be able to clear the debt and move on to the next one and next after. This will give the entrepreneur a psychological edge and they will be highly motivated to pay up than trying to pay all their debts at once and end up paying none because after a month the interest would have increased again.
Negotiate With The Creditor
Though most people tend to avoid this cause of action when in debt, it can work a treat and help relieve the entrepreneur off some stress. The idea here is to negotiate a payment plan than will be much favorable to the entrepreneur as well as the creditor. When the entrepreneur enters into negotiation with the entrepreneur then they should look to pay to the debt in installments so as to let the creditor know that they should give up on the debt. And the entrepreneur should show some good will during those negotiation and start of the payment on the first day of negotiation.
Hire Your Spouse
If the business is already in serious debt then what can make one think that things can change overnight? The entrepreneur will need to find a way to cut cost in the business. The finances that will be freed up will be used to settle the debt to certain percentage as well. The entrepreneur should look to hire their spouse in that case and save enough money for the debt as the spouse will not be paid as opposed to another employee that one may choose to employ in the business. The money that spouse makes in the business will also make sure that they have something to bring to the household as well by the end of the day.
Chase Down Late Paying Customers
Chances are the entrepreneur got into the debt because some customer they had did not pay them in time. If that is the case then the entrepreneur should make sure that they chase down the late paying customers and make sure they pay. Even if the customer is one that the entrepreneur doesn’t see the prospect of them paying, then the entrepreneur can enter into an agreement with them so as to have them pay a percentage of what they owe so as to help the entrepreneur off set their own debt. When the customer is chased down and they eventually end up paying there is no harm in that as this will be a huge win for all those that are involved.
Sell Off Assets
Most entrepreneurs are usually afraid to sell of their assets to help them pay off debts. But, this can be one of the ways that will make sure that the business will not enter into more debt. The entrepreneur should look at their business ineptly and see what they can sell off and not impact the value of the products and the services that they offer to their customers. Most of the time most entrepreneurs go for selling some equipment that is expensive and getting a much cheaper one or even get a used version. This is the part where the entrepreneur will need to be on their creative best and discover all the options that are available.
Conclusion
A little debt is good for any business, in fact all the business in the world come across debt at one point or the other. It is healthy and competitive to have some little debt in the business but, that should be well managed as serious debts will surely run the business to the ground. Any entrepreneur should always look to pay up every debt that they incur in the right amount of time so as to avoid being in serious debt in the long run, but if they do find themselves in such a scenario then they should try and implement some of the listed methods to ditch the debt.
While most people have a belief that debt is healthy for any business, that doesn’t go without saying that any entrepreneur should try and do without debt in their business. Debt can be good but, only if the debt is a small one. But, when they debt is a big one then the entrepreneur is in serious trouble as that can hinder the entrepreneur from reaching the goal they had set out for when they started up their business. When the entrepreneur is in serious debt then they should consider ways of getting themselves out as quickly as possible so as to not have the debt tied down to the business and hinder the business from growing.
Check Your Credit Report
The first part of trying to figure out a problem is knowing the whole lay out of the problem before you can get into tackling it. Get a full report and all the information of what the situation actually looks like. The have a full idea of what the credit score looks like not just the business credit score but also your personal credit score. This will make the entrepreneur know from where they will start tackling the problem from because it can be hard to tackle two credits at once, if one is still strong enough to maintain then the one that is in the red zone should be given immediate attention. More so if the one that is in serious debt is the business account then that should be sorted out early enough.
List The Debts From The Smallest To The Largest
Most people think that listing their debts is one of the stupidest ideas in the world but, it actually works well for those that have tried. There is nothing more challenging and emotionally torturing then when one is paying off their debts and they don’t see as if the debt is reducing. Hence the listing comes in handy. When one starts paying the small debts that will mean they will be able to clear the debt and move on to the next one and next after. This will give the entrepreneur a psychological edge and they will be highly motivated to pay up than trying to pay all their debts at once and end up paying none because after a month the interest would have increased again.
Negotiate With The Creditor
Though most people tend to avoid this cause of action when in debt, it can work a treat and help relieve the entrepreneur off some stress. The idea here is to negotiate a payment plan than will be much favorable to the entrepreneur as well as the creditor. When the entrepreneur enters into negotiation with the entrepreneur then they should look to pay to the debt in installments so as to let the creditor know that they should give up on the debt. And the entrepreneur should show some good will during those negotiation and start of the payment on the first day of negotiation.
Hire Your Spouse
If the business is already in serious debt then what can make one think that things can change overnight? The entrepreneur will need to find a way to cut cost in the business. The finances that will be freed up will be used to settle the debt to certain percentage as well. The entrepreneur should look to hire their spouse in that case and save enough money for the debt as the spouse will not be paid as opposed to another employee that one may choose to employ in the business. The money that spouse makes in the business will also make sure that they have something to bring to the household as well by the end of the day.
Chase Down Late Paying Customers
Chances are the entrepreneur got into the debt because some customer they had did not pay them in time. If that is the case then the entrepreneur should make sure that they chase down the late paying customers and make sure they pay. Even if the customer is one that the entrepreneur doesn’t see the prospect of them paying, then the entrepreneur can enter into an agreement with them so as to have them pay a percentage of what they owe so as to help the entrepreneur off set their own debt. When the customer is chased down and they eventually end up paying there is no harm in that as this will be a huge win for all those that are involved.
Sell Off Assets
Most entrepreneurs are usually afraid to sell of their assets to help them pay off debts. But, this can be one of the ways that will make sure that the business will not enter into more debt. The entrepreneur should look at their business ineptly and see what they can sell off and not impact the value of the products and the services that they offer to their customers. Most of the time most entrepreneurs go for selling some equipment that is expensive and getting a much cheaper one or even get a used version. This is the part where the entrepreneur will need to be on their creative best and discover all the options that are available.
Conclusion
A little debt is good for any business, in fact all the business in the world come across debt at one point or the other. It is healthy and competitive to have some little debt in the business but, that should be well managed as serious debts will surely run the business to the ground. Any entrepreneur should always look to pay up every debt that they incur in the right amount of time so as to avoid being in serious debt in the long run, but if they do find themselves in such a scenario then they should try and implement some of the listed methods to ditch the debt.
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