Many companies find themselves in debt. Getting out of the red can be difficult but is essential – if you’re running on a loss the quality of your company’s service could start to decline due to cutbacks, which could lead to a downward spiral. You may have to sacrifice your own wage just to keep your employees paid. Here are just a few ways that you can stay afloat when the going gets tough.
Increase your company’s income
Most employers think that making cuts is the way forward, but why tear down what you’ve built up? Instead focus on trying to earn more. If you think charging more might deter you client base, you could always try upselling extra services or products or simply finding a way to attract a greater volume of clients. Increased revenue could allow you to pay off your debts, whilst not having to make any sacrifices.
Stop borrowing, start leasing
Taking things out on loan could be contributed your debt, whilst adding on interest. There may be options of leasing certain items rather than borrowing money to fund them. This could include leasing machinery, company vehicles and office space.
Get money back from late payers
If you have any clients that owe you money, now could be the time to demand payment. You may find that the only reason you’re in debt is because others in debt to you. It’s worth looking into your rights as a creditor – if certain clients haven’t paid their money back for months despite various warnings, you could be in your right to seek legal action and potentially hire a debt collection agency.
Consider debt relief measures
As a debtor, you also have certain rights. It could be worth seeking the help of debt relief companies who may be able to negotiate with creditors and reduce your debts. You may also be able to pay off multiple debts with a debt consolidation loan, resulting in one monthly payment instead of multiple payments each month.
Consider a change of premises
If you are going to make a cutback, a change of premises is likely to be the biggest and most effective cut that you can make. You may be able to find space that’s cheaper to rent, due to either being smaller or in a less popular location. Many office-based businesses are now opting for shared office space – this involves sharing an office with another company for a cheaper rate. There’s even the option to go fully virtual. If your work is entirely phone and computer based, you may not need an office to operate from – it’s possible that you and your employees may be able to work from home using a cloud server to share files. There are similarly drastic options such as trading a café for a food truck or swapping out a retail store for a market stall.