6 tips for reducing serious business debt

According to the article “6 Tips for Digging Your Small Business Out of Serious Debt” by contributor Serenity Gibbons on www.business2community.com, pulling your business out of debt is very similar to pulling yourself out of personal debt, but it requires hard work, perseverance and some patience. Gibbons offers six tips to help you reduce serious business debt:

  • Review your credit report. Before you can tackle your debts, you need to understand where those debts are and how they affect your scores. Remember, a credit score is just a quick analysis of where you stand on a standardized scale, while a full credit report lists all your debts. Once you know this information, you can make a plan to tackle your debts.
  • Snowball your debts. If you begin aggressively paying debts but see few results, you’re likely to get discouraged and slow your momentum. Thus, many experts suggest snowballing your debts, which means ranking them from the smallest to the largest. Focus on paying off the smallest debts first so that you can see some progress, which will keep you motivated. While you’ll still have your larger debts, you know you will eventually get to those.
  • Negotiate with lenders. If you’ve ever had someone borrow money from you for a lengthy period of time, you can understand a lender’s perspective. If enough time passes without a client paying back the loan, lenders assume it’s a loss and that they’ll never see the money. On the other hand, if a client were to come back months later saying they would settle for paying back just part of the loan, they would take the opportunity to get what they can from what they assumed was a full loss, and it’s a win-win situation for all involved. Therefore, check with your lenders about a possible renegotiation. “Most will negotiate and accept a lesser amount, just to get you off their books,” Gibbons states.
  • Hire your spouse. Admittedly, this is an option that will not always be available, but when it is, it can certainly help. Part of paying off debt means cutting costs to increase revenue. One way to do this would be to find a position in the company that your spouse can fill. Instead of hiring someone at the going rate, you pay your spouse a percentage of that (perhaps 50 percent or less). While this does affect your personal household income, it will free up a couple thousand dollars each month to go towards paying off debt. Granted, this is only a short-term fix and you need a spouse who will agree to sacrificing the time and money for the good of the company, but it is an effective route.

Related: Wash Wisdom: 5 tips for working with your spouse

  • Settle accounts with late-paying customers. If you have customers of your own with late-paying debts, now is the time to find them and settle accounts. You may even need to settle for a lower payment if you know you’ll never see the money otherwise. You can then turn around and use these payments to pay off your own debts.
  • Sell assets. Analyze your business and see if there are ways you can work differently without impacting the quality of your product. For instance, can you sell a piece of equipment and buy a cheaper, used version without overly impacting quality? If you get creative, you might discover additional ways to sell assets and use that money to pay off debts.

Read the full article here.

5 proactive, post-natural disaster insurance claim tips

According to the article “Here’s what to do if you are a small business owner struggling after Irma” by contributor Rene Rodriguez on www.brandeton.com, in the event your business suffers damage from a natural disaster, it is recommended you call your insurance agents as quickly as possible to start a claim process. As such, Rodriguez provides five quick tips for getting ahead in the process:

  • Photograph or take video of the damaged property as well as any records that can prove the value of damaged or lost equipment and inventory.
  • Pull together proof of the revenue your business was generating before and after the disaster’s interruption began, including sales documents, expense reports, profit and loss statements, inventory reports and revenue forecasts.
  • Depending on the type of business coverage you have, you should be prepared to show the damaged property to one or more insurance agents.
  • Get multiple (not just one) bids from contractors for physical property repairs.
  • Keep handy a list of all the names and numbers of everyone you talk to about your claim(s).

Related: Business insurance for natural disasters

To read the full article or learn more about current Florida-specific measures you can take, click here.