Successful businesses manage the equilibrium between debt and cash flow, and most businesses have debt in one form or another. There is no magical cure for eliminating business debt; rather, careful management is the key to not letting the debt spiral out of control. Here are four ways to manage business debt.
Collect on money owed
If you have customers who owe you money, now is the time to collect it. Call in all outstanding invoices and urge your customers to pay. Take any outstanding money and apply it directly to your debt, starting with the debt with the highest interest rate.
Use credit wisely
Credit card companies would love for you to fill card after card to the limit. Instead of getting caught in a high-interest debt cycle, consider using a prepaid credit card. With a card like this, you can only spend as much as you have already deposited onto it.
Step up your marketing
If you’re not already marketing to your customer list, then get started. Your customer base is going to be your easiest way of getting business; they already know your service or product. Also, make sure that you’re using the Internet as wisely as possible for your marketing. Hire somebody to help if you are unsure how to market online.
Raise your prices
Businesses are often afraid that raising prices will scare away customers. Customers are smart; they will know that the price has changed, but they also understand. A small price increase on your product or service will increase your profit and should not affect the amount of business you get.
The key factor to managing business debt is to start managing it quickly, before it becomes overwhelming and the interest rates become debilitating.