Unless you’re extremely well financed or extraordinarily lucky or sharp with managing your business, you will have to deal with debt in the first few months of being an entrepreneur. Most business owners, indeed almost every business owner, will need to borrow significantly to get the company off the ground and will spend a lot more than they earn in their first year of business.
Therefore, debt management becomes a crucial skill that entrepreneurs need to fine-tune if they are to avoid serious repercussions further down the line. If a business owner is in heavy debt but has a good rapport with creditor, he/she can try to draw upon that goodwill to renegotiate repayment terms favourably. Another possible option is to rent out office space to other businesses, so long as it is workable.
In addition to cutting costs, effective debt management is also about the ability to raise extra cash quickly. Your lender could be able to advise on ways to generate cash rapidly, while you could consider offering discounts to customers or seeking their feedback on your business. An improved level of customer engagement can often trigger increased sales as they feel more valued and therefore repay that faith by shopping with you.
Find out more about how to manage business debt effectively in this infographic from Eazy Cash.