So, you’ve started a new business. Congratulations! There’s so much to be excited about, especially the fact that within a few short years you could be rolling in it by doing something that you love.
However, a lot of new business owners make the terrible mistake of getting into too much debt and end up going broke. Now, that’s something that you want to avoid, right? So, let’s unpack seven ways you can dodge the dreadful debt.
Clear Away Your Existing Debt
Let’s assume you have multiple debts already – business establishment costs, car or van loans, and all the rest. All those different repayments and interest rates can really end up breaking the bank.
One way you can clear them all away and focus on your business is with debt consolidation loans from Latitude. This gives you one loan amount, which you then use to pay off all your debts, and bring your energy to focusing on your business while paying off one loan on one rate. How great is that.
Avoid the Bells and Whistles
When setting up a new business it can be tempting to go all out and buy all the shiny things. But before you go and blow thousands of dollars on the credit cards on brand new MacBook Pros for everyone in the office, stop and think: Would a basic Windows laptop do the job until you can afford to upgrade? Curb your spending enthusiasm and get by on the bare bones until you see some decent turnover.
Cut Costs Where You Can
You want to avoid as much expense as possible. Instead of renting out a whole office, consider co-working spaces for a while. Can you hire casual staff to start with? While they may earn more by the hour, think of all the savings on annual and personal leave and rostered days off.
Be Loan Savvy
Is it time for that large business loan? While it may be a necessity to get you all up and running, imagine making the wrong choice and being stuck with an exorbitant rate and unaffordable repayments. Ouch. Do yourself a favour and do your homework before you take the plunge. Compare and contrast a range of lenders and even consider a broker, who may be able to get you the best deal going.
Budgeting is Key
We can’t stress this enough. Sit down and work out an annual, or six-monthly, budget. Figure out all your expenses and try to project your income. When it comes time to spend, refer back to your budget. Have you budgeted for your expense? No? Then don’t buy it! There are some handy, free tools available online that can help you plot out your budget.
Don’t Quit Your Day Job
If you’re a brand new business owner, you may still be employed by someone else. Do yourself a favour before resigning and see if you can go part-time or casual. That day or two of extra income and really make a difference in the beginning, and see you avoid the debt trap.
Haggle and Bargain
Talk to your suppliers. See if you can get a discount for wholesale goods. Reach out to other companies who may have better deals. Every dollar you save is a dollar you don’t have to borrow.
Ta-da!
Wow, how’s that for seven debt dodging tips? Try to get a bargain from your suppliers, and try to keep a side hustle going, even if it’s your old job. Be strict with your budget, cut costs where you can, and consider a debt consolidation or business loan – but do your homework. Finally, avoid the shiny stuff until you’re in the black.
