For a new business owner, debt is something that just seems to come with
the territory. You have to take out a loan to get the capital to get
your business off of the ground. You are starting in debt and hoping to
work your way out of it as quickly as possible so that you can start to
make nothing but profits. If you have investors, you are not in debt to
them, per se, but you do have an obligation to try to do what you can to
show them that their investment in your company was a wise move.
Image: flickr.com/photos/meddygarnet
Do you feel like your debt is holding you back? Is it all that you can think about? If so, there are a few things that you should know. These things can help you understand debt and reduce the stress you feel, both on a personal and a professional level.
If you look at the Scott Gelbard Businessweek profile, you will see that he has a lot of experience managing debt, even on an international scale. This should help put things in perspective for you. You can see that even the biggest corporations have debt, to the point that they have special consultants just to keep track of it. They have to put money into making products, expanding business ventures, finding new markets, and many other things. This is the only way to earn, and, as the old adage goes, you really do need to spend money if you are going to make money.
There are a few key things that you need to focus on to get out of debt. First off, you have to make your company efficient so that you are making the maximum amount of money for the time and effort that you put in. It does not matter if you are running a tech startup in the Silicon Valley region or if you are running a diner in Michigan. The same basic principle holds true.
A lot of this comes back to finding ways in which you are now wasting money, which could be keeping you in debt longer since you are paying the minimums and no more. You want to pay double or triple your premiums to try to get through the loans faster, but that wasted money is make it impossible. A financial consultant can often help you see what you need to do. There may be some things that you could change that are very obvious to him, but you could be too close to the whole thing to see them. You may also feel bad to cut jobs or combine them, but the reality may be that you have too many employees who are getting too little done. The consultant can help you see what has to happen.
Another tactic for getting out of debt is simply to look for more investors. Use the money that they give you to pay off the loans and reduce the financial strain on your company. This makes it easier for the company to survive and grow, which will pay the investors back in the end. You do give up some ownership of your own company, but this is a small price to pay if it helps the company double in size or sales numbers.
