Article Content: Courtney Rosenfeld
Is your small business swimming in seemingly bottomless debt? If so, you’re not alone.
According to data from the Small Businesses Voices survey conducted by Goldman Sachs, 40% of small businesses in the United States “have less than three months of cash reserves.” Also, about 31% of business owners felt they could find funding to shore up their businesses, but only 20% of Black business owners felt like they could find financing.
However, you don’t have to remain in debt. You can take further action via the following steps, presented below by Rock Capital & Associates.
Rock Capital & Associates has hundreds of programs available for their clients. By having access to a Business Finance Consultant, you have access to hundreds of funding sources across the United States and Canada. Visit our website or call us at 1-877-670-1590.
Start With Your Budget
You probably already know the importance of keeping a budget for your business. However, it’s also probably been a while before you gave it a second look. The first thing you want to do is take an audit of your entire budget by going through all of your financial transactions, bank statements, expenses, and sources of income from the past year. These things will tell you where you’re possibly wasting money and where you need to make improvements.
You’ll also want to get your bookkeeping up to date by using intuitive financial tools. There are apps and software that can help you generate budget reports in real-time based on your current balance statements and tailor-fit them to your needs. This, in turn, allows for more efficient forecasting so you make better spending decisions while monitoring your overall expenses.
Maximize Your Sales
Making more money is a critical step in getting out of debt. The more money your business can make, the better chance you have at paying off your loans and credit lines quicker. There are tons of ways to boost your sales and garner new customers. Figure out which methods will work best for your business and get to work.
Consider the journey your customer goes on to reach that final sale, often called a conversion funnel. How can you help your clients solve a problem they are having, and how can you easily lead them to the solution (your product or service) that they are willing to pay for?
Cut Unnecessary Expenses
Your budget should give you a general idea of which recurring expenses are a waste of your time. For example, maybe some certain products or services aren’t popular, or maybe you’re not getting the most out of current subscriptions. You may also want to consider relocating to a more affordable space or even a shared workspace — your expense-cutting options are virtually limitless. You just have to zero in on what your business can absolutely live without.
There are apps and tools, some even free, that exist to help you save money at little to no cost on things you might otherwise be spending tons of money on. For example, Time Doctor will keep track of hours used in work for business productivity and tax purposes. Google Workspace provides a way for all your team to work using similar tools like Docs and Sheets with storage space up to 30 gb. Survey Monkey allows you to create surveys to monitor what your clients need and build services and/or products around customers. Marketing-wise, you can start out with a free logo design. It’s ideal for a new product launch or to rebrand, and can carry across multiple platforms. That way, you won’t necessarily have to spend money on a designer.
Renegotiate Your Vendor Contracts
In addition to reducing and restructuring your expenses, it’s a great idea to reach out to any vendors you’re working with to see if you can negotiate the terms and pricing of your contracts. It’s very common to get comfortable with your vendors, allowing them to take advantage of you by raising their prices and neglecting to improve their offerings. Here is where you can figure out who is worth continuing a relationship with and where you can minimize supplier expenses.
By using the following suggestions, you and your small business can start to make the journey out of debt instead of drowning in debt. Instead of making this voyage from financial uncertainty toward financial stability alone, why not reach out to Rock Capital & Associates to see how we can help you!
