Reducing Your Debt While Reinvesting In Long-Term Growth

Insurance News Net:

The single most effective way for a business to balance debt is by reducing its overhead costs and maximizing profits.

Like most businesses, franchisors and franchisees have found it very difficult to raise capital in recent years. The recession has caused declining revenues, reduced asset values, and has instilled a psychology of fear and anxiety that cause even the most brazen of entrepreneurs to hunker down and put their aggressive growth plans on the shelf. Bankers are requiring all businesses to take more risk for less capital. At the same time, franchises have found it difficult to pay down their existing loan obligations – often due to decreasing sales, but ultimately due to decreasing profits.

As a result, how does a franchise owner or executive free up capital to grow their business? Raising prices to increase revenues in a down economy could put your franchise at a competitive disadvantage. Reducing marketing expenses is a fatal strategy for growth. Delaying or canceling capital equipment purchases creates or accelerates inefficiencies and allows competitive disadvantage to take root. Read full post.

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