Lenders are tightening the reins on borrowing cash these days and many small business owners are straining themselves under the weight of being in debt. Some businesses know what they need to make that next move which could turn things around for them but it is completely out of their reach because they don’t have enough funds to get there.
The last thing you want is to file for bankruptcy so to avoid that fate here are a bunch of ways your business can dig itself out of a bad spell:
- Cut unnecessary costs and free up cash
There will be parts of your business that got the company into its debt. Your best approach to this problem is to attack those things head on. Look if they didn’t make you the returns you need to address why and are they still costing you? Other than that is there any tools or software you pay for that you don’t need? get rid of them.
- Revisit the budget
If the debt keeps piling up, then clearly the current budget just isn’t working. Reassess your financial situation to give you a better insight in whats happening with the company.
- Prioritize debt payments
Tackle the business’s highest-interest rate debt first. Get rid of them as quickly as you can. This means you repay less and once this is over you can focus on growing the company again.
- Speak with creditors
- Tell them about your financial situation and how the company is going through a bad spell. If you eventually need to file bankruptcy its not good for anyone. If they’re bleeding you dry with repayments then you might be able to sort out a deal. The worst thing you can do is setup a payment plan and then default.
- Consolidate your loans
If you can do this then great, I highly recommend it. It reduces your monthly costs without harming your credit.
- Seek Counsel
Negotiating with creditors can be a scary experience. If your creditors don’t want to work with you try get help from a company with experience. Credit Counseling organizations are great for this.
- Look into Venture Capital
Perhaps your company isn’t in major debt right now but you’re looking to grow it before you head in that direction. You can struggle at any stage in a business but if you’re really having some troubles look into Venture Capital. You should note you will have to sacrifice the majority of your shares but you will have fewer shares in what could be a much more successful company. The Venture Capital firms don’t take on companies to let them fail. You will be given full support and guidance. This can be amazing for your company but you should look into legal guidance and get support with this deal. Places like Goodwin Venture Capital Firm are great for this.
Sometimes all you need is a complete rebranding of the organization. Out with the old in with the new and the difference that can take is massive. Look at this example of reeves art rebrand by Pearl Fisher.