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How Businesses Recover From Debt

How Businesses Recover From Debt

When business debt is mounting up, business owners can start to feel hopeless and helpless to stop it. Once the debt reaches a certain point, it can feel insurmountable, but the situation may not be as dire as it appears. Obvious, as a debt management company, we are going to say that we can help (and we can) but there are ways companies can drag themselves out of these situations and we generally just help them do it. Here are some of the tactic’s companies employ to get themselves out of serious debt situations without having to wind up the business.

Getting the Money In

It sounds obvious but people can get so focused on what they owe to other businesses that they can neglect the money they are owed. Having a good system in place to recover debts, especially long-standing ones, is essential and it is worth talking to other businesses about the people or processes they use which are effective in getting debts paid. Similarly, it is worth throwing a lot of effort into getting more business quickly whether that is through short term offers or aggressive marketing.

Keeping Creditors at Bay

As simply not paying people isn’t going to get you very far, communicating with creditors and negotiating ways of paying your outstanding bills in a more affordable way is a better option. This is a service we offer to clients because dealing with baying creditors can be time consuming as well as stressful.

Managing Credit

Prioritise paying off the debts with the biggest interest rates and move debts around if necessary. This is something else it is a good idea to either ask advice on or get help with as the research involved and the time to sit there and look at everything you have can take up time better spent on drumming up business.

Reducing Spending

Another thing that sounds obvious is to reduce your costs. Less obvious is to ask your bookkeeper or accountant to help with this as they will have the time to analyse exactly what you are spending and work out where you can save money. It is also worth talking to your accountant or a business advisor on making bigger changes like restructuring or refocusing the business to reduce costs.

Reducing Spending

Another thing that sounds obvious is to reduce your costs. Less obvious is to ask your bookkeeper or accountant to help with this as they will have the time to analyse exactly what you are spending and work out where you can save money. It is also worth talking to your accountant or a business advisor on making bigger changes like restructuring or refocusing the business to reduce costs.

Freeing Up Capital

Business owners know that they can sell anything they can live without to raise capital, but it is also worth thinking about selling and then leasing back essential equipment to increase ready cash and spread out the cost of paying for the items. If your business owns the property it operates out of, it could potentially be sold and rented back too. Are there other ways your business could generate money from its premises or assets? Some businesses generate income from renting space or the use of their equipment to other businesses.
These are just some of the way’s businesses can begin to address their debt problems and different solutions are going to work for different businesses. That’s why we take the time to get to know our clients and their businesses thoroughly. It allows us to make the right decisions about the best strategies to resolve their debt issues while helping them along so they can focus on moving their business forward. If you would like to talk to us about how we help businesses recover from debt, give us a call on 01323 446644 or email office@r2bbs.co.uk.

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