Many of today’s small business owners find themselves reliant on credit cards to stay afloat, a practice which often leads to unmanageable debt. Rising overhead, inaccurate sales projections, and a slowing economy are just a few of the problems these small business owners face, and using credit cards to keep the lights on is increasingly common.

So how does the responsible small business owner recover from their rapidly rising credit card debt?

1. Stop Accumulating Debt: Making a conscious decision not to take on any more credit card debt is the first step to recovery…
2. Communicate With Your Creditors: If you are in a debt settlement program, that’s what we are here to help do on your behalf. If you’re still fighting this alone, try to speak with each of your creditors regularly and obtain accurate numbers regarding your debt. Tell your creditors you are committed to paying off this debt. The bad news is that they may increase your interest rates and hit you with fees; but, if you’re in a pinch and still trying to do this alone, it may help…
3. Pay More Than the Minimum: Making the minimum payments will only ensure that you remain in debt for many years to come. Utilize every possible dollar available to increase payments on the debt’s principal, which will bring you closer to actually eliminating the debt…
4. Talk to a Debt Settlement Professional: Discuss your situation with a debt professional. With many different programs available to suit each company’s unique debt problem, these qualified experts help your company identify a realistic path to fiscal freedom…
5. Evaluate Your Actual Business Needs: Is the business you are running today still in line with the business plan you developed years ago? Small businesses often find that their original business plan was overly optimistic. Having a realistic plan and forecast in place will help keep operating expenses to a minimum and reduce unnecessary spending…
6. Identify Possible Cost Saving Opportunities: Does your small business actually need the 4,000 square foot riverfront office? What about the full color copier/printer that has only been used a handful of times? Eliminating costly monthly expenses such as these can have a significant impact on a company’s bottom line…
7. Make Hard Decisions: Does your small business still need a full-time receptionist? Has the sales staff been holding up their end, or are they more concerned with last night’s ball game than closing the next deal? No one wants to be the bad guy when it comes to reducing staff, but making hard decisions now can eliminate even harder decisions down the road…
8. Budget Everything: From employee compensation and rent to pens, notebooks and copier paper, develop a budget that includes every expenditure for your company. Communicate to your staff the need to reduce costs across the board – electricity, office supplies, lunchroom supplies, etc. By accounting for every penny going out the door you can more easily plan for how much needs to come in.

   

Have more good ideas to combat small business debt? Add your comments and ideas below!

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