Small Business Debt Relief: How To Save On Overhead Expenses

Debt is usually a part of any business. When you start your company, you usually get a start up financial aid to help you setup the whole thing. As you start to purchase the furniture and office suppliers, you use your business credit card to pay for these small transactions. Even business processes that you outsource are sometimes done on credit. Some companies allow business clients to pay based on a predetermined payment term of either 30, 60 or 90 days. These are all payables in your business that technically, puts your company in debt.

A business debt is actually one of the smart loans that you can make. Any debt that can contribute to the growth of your personal wealth has the potential to be good for you – but only if you know how to pay it off properly. Sometimes, business owners concentrate too much on growing the business that they fail to pay attention to their credit. They end up racking too much debt – up to the point when it overruns their profits. That can be very damaging because any interest rate that you are paying on your loan is wasted profit for your business.

Tips to lower your overhead expenses to help pay off debt

Some people quickly jump to small business debt relief options without really thinking about the cause of their credit problems. Sometimes, the cure for debt is not really how you pay it off, but how you manage your overhead expenses to keep it within what your profit can afford. It is a lot similar to how consumers must live within their means. Your business must be able to operate way below what you profit each month. If you are just breaking even, then going in business is not really a great idea. You want you business to earn you money and that means all your payables must be below what you are getting as revenues.

Here are some tips that you can do to help save on your overhead expenses.

• Choose your office. Unless you plan on inviting clients over to your office, you may want to keep your space as small as needed. Sometimes, small businesses function just as well at home compared to an office suite. If you only have one or two employees, you can probably convert your garage into an office.

• Buy used office furniture and equipment. While having brand new furniture and equipment can be very exciting for a new company, it may not always be practical. See which items you can buy through yard sales, auctions and other stuff in the market. Also, if you employ one or more employees, you may want to think about having them share equipment like printers, scanners, etc.

• Go paperless. Going digital in everything is the new trend. Not only will it save you from the paper clutter, it also does not require filing cabinets and too much space in your office. You can actually send billing statements, make payments and other transactions online. You can send contract through email and have them authenticated through digital signatures.

• Outsource business processes. In most cases, we have business operations that are too costly to do in-house. Some small businesses benefit really well from this because they only pay for the service when they need it. For instance, instead of paying an accountant one month wages plus benefits, you can only hire them when you need to compute your taxes and put your financial records in order. Independent contractors can be found online and they can actually give you quality output without all the additional expenses. They can even work remotely so you can keep your office space requirements low. Check out outsourcing websites like Upwork.com or Freelancer.com. You can post your jobs, hire and pay contractors as your business requires it.

• Download free software programs. There are so many programs online that you can download and use for free. You don’t have to spend a lot on certain programs – especially if you will not use it all the time.

These are only a few of the things that you can get savings from.

Small business debt relief options

If your debt is already mounting and you want to get debt relief, there are various options for you. The programs for small business debt relief is quite similar to what consumers use.

• Debt consolidation loan. Most owners use business loans to get themselves out of credit card debt. They use a the loan amount to pay off high interest debts so you are left with only one debt to think of every month. This will allow you to focus more of your efforts to growing your income.

• Debt settlement. This option involves asking your creditor to believe that your business is in a financial crisis. Tell them that you wish to propose paying only a portion of your debt and having the rest forgiven after the payment. Let them know that if they insist on asking you to pay the whole debt amount, you may be forced to declare bankruptcy.

Apart from these small business debt relief options, you also need to wise up when you are buying things for your office needs. Here are a couple of additional tips to keep your spending low.

• Always have a budget plan and stick to it.

• If you want to retain a business credit card for purchases, make sure to get the one with the lowest interest rate.

• Inquire if you can get a discount for paying purchases in cash.

• Get at least two or three bids for any project that you want to outsource.