How to Run a Debt- Free Business
Is running a debt-free business possible? Absolutely! It may seem impossible, but when you make the decision to get and stay debt free, the level of calm you feel in your business is simply unmatched. Here’s the thing, when you decide to run a debt-free business, you have to make tough decisions. You must say no to the conveniences, and sometimes even to resources. You have to wait before buying a new service vehicle, or pay yourself a salary that you consider lower than you would like to receive. Still, the benefits far outweigh the fear of mounting bills and interest.
If you want to run a debt-free business, here are a few things you will have to do:
Be wise with the company vehicles
If you have a service company, vehicles are going to be a big part of your spending. To stay debt-free, buy older ones and pay cash for them. Save up for as long as necessary, and don’t yield to the temptation of a monthly loan payment vehicle for each vehicle in your company.
Yes, you want to look professional, so if you need a service vehicle try to get one in good condition. Just remember it doesn’t have to be top of the line, or exceptionally flashy to get the job done.
Close up your brick and mortar in favor of a virtual business
We’ve gone over this before, but working from a home office and renting a virtual office is a fraction of the cost of brick and mortar. This move alone can save you a boat load of cash annually! Do you really need your own full time office?
Know your numbers
You may be struggling to pay down your debt, but a good starting point towards getting debt free is to look closer at your current numbers. Know exactly how much you are spending on things like monthly expenses, labor (salaries), materials/ product, marketing, etc…
Once you have written it down, go through everything with a fine tooth comb and see where you can reduce expenses or raise revenue. One of the main reasons many business owners struggle with debt is they don’t know their numbers.
Start a list of all of your debts and pay off the smallest debt first. Cross that one off the list and roll that payment into the next smallest bill. This will begin the snowball effect and before you know it your list of who you owe will become smaller.
Start a Budget
No matter how large or small your business is, it is important to start a budget. A budget makes you accountable and gives you more control of your expenses. Making a budget is difficult, and many people turn away from them because the feel so constricting, but by documenting all expenditures, you’ll see that there are things that you can reduce spending on.
You don’t have to be in debt forever. The road may feel long at first, but once you start on the journey of becoming debt free, what you’ll find along the way is less stress and lots of freedom.
We hope you will find this extensive list of budgeting and planning worksheets helpful. http://simplebizplanning.com/forms-and-worksheets/
The saying goes, ‘one mans trash is another’s treasure’. With sites like local ebay, craigs list and facebook yard sales as well as business auctions you can find everything from furniture to office equipment. If you can buy second hand, do it to save a buck.
Contact us today to discover more about our suite of virtual office services and to explore our beautiful office space in Tampa. Want to know more about how we can help you go virtual? Click here to learn more about On Point Executive Center!
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