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Owners of businesses of all sizes struggle with debt. Start-up costs, staffing, maintenance, and the minutiae of providing for a successful business can lead to overwhelming debt burdens. This can significantly affect the quality of life for business owners. So if you’ve got debt hanging over you, these are five steps of debt busting to get back on track financially.
Debt Busting Step 1: Figure Out What You Owe
When you’re in debt, it can be tempting to ignore bills. However, it’s important to have a clear idea of what you actually need to pay. Sticking your head in the sand will only make your problems worse.
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To get started with debt busting, write down a list of your debts, the interest rates, and when you’re meant to repay. Include all debt sources, including credit cards, loans, phone plans, and loans. This will give you a realistic idea of your finances. You may find out that you owe more or less than expected.
Step 2: Make A Budget
Business 101 for managing your business accounts is budgeting. Therefore, make a budget so you know how much money you have coming in and going out each month. Detail your income as well as how you’re spending. Many business owners get caught up in purchasing that isn’t necessary. However, debt busting requires discipline in the area of spending.
There are lots of online tools that can help you with this process. Having a budget will let you find areas where you can cut and save money. Some bills, like a mortgage or rent, can’t be ignored. However, other expenses may be an area to cut. Review your budget and determine where you can cut your expenses to start paying your debt off faster.
Debt Busting Step 3: Switch Providers
If you’re paying high interest on current business loans, you may not be getting the best interest rate. Use a loan comparison site like NowLoan.co.uk to see what deals are available to you. The cheapest deals are usually found online and it’s easy to compare terms. You can see if there’s a better option for you and your business. If you don’t find something right away, keep checking. This is something that may change over time.
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Step 4: Slash Business Debt Bills
Your budget is a great way to reveal luxuries that you can cut back on. It will also reveal if you’re paying too much for certain goods and services. Shop around for services like broadband, insurance, and phone providers. It will benefit your business to find out if you’re getting a good deal. Switching suppliers is fairly easy and won’t take up too much time. It’s also a good idea to use discount shopping to save on your business supplies and stock.
Step 5: Check Tax Benefit Entitlements
As a business owner, it’s worth taking the time to determine if you’re eligible for any benefits or tax credits. The benefits system in most countries is complex, but there are organizations that will help you discern what is available to you. There are some useful calculators to work out your qualifications. It helps you navigate what you should get, how to claim, and even if your benefits change with changes in income.
When you feel like you’re drowning in business debt, asking for help seems impossible. The good news is that thousands of business owners have been there before you. These five steps will tighten up your financial health and get you on the right track to busting debt. Use these five steps to get started improving your finances in business and at home.