No one ever begins a business with the hope of failing, nor does anyone reach for the stars in his business half hoping to be kept redundant by the weighing anchor of debts.
We even tell ourselves that the richest men in the world have debts so “Who am I not to be in debt?” You say.
But carefully analyzing your business you can see that you aren’t living in a financial bed of roses as much as you would love that to be your experience.
The obvious reality is that your expectation varies widely from your experience. It beggars the question, “How does one avoid debt in business”
How does one live free from the ever-seeking hands of debts and live above the suffocating power of unavoidable recurrent expenditure when the income to meet the expenditure isn’t there…
This article is an attempt to find proper solutions to this dilemma.
These are 5 sure ways to avoid debts in your business.
1. Be a Judicious Budgeter:-
Budgeting many times looks like what only government parastatals and big firms engage in, maybe that’s the reason why they enjoy more stability. However, having a budget enables you to identify the expenses that are needful and of greater necessity for you. Your Scale of Preference. Ensuring your resources are only targeted to areas that are essential for the smooth running of the business. A man who lives without a budget would always live above his ability.
2. Build an Emergency Fund:-
Emergency funds as backup plans that reduce the effect of unexpected occurrences in the future. They ensure that no matter how big the expenses in the future are, there’s a purse to ease the pressure and mitigate the pain. No wonder countries have reserves.
3. Keep Track of your bills:-
As a business owner, some expenses are regular. We call them recurrent expenses. In your planning for every month, these should be given a premium and we define recurrent expenses as those expenses without which the business cannot function at its optimal level. Keep an eye on them and ensure they are regularly paid.
4. Develop a regular savings habit:-
The benefits of savings are not largely in the amount saved but in the consistency of the savings. It’s said, “A drop of water makes a mighty ocean.
” In the same vein, the little amount of savings you have can hold you back and become a soft cushion for safety in the future.
5. Cut the wants, focus on the needs:-
Most times we are always tempted to be emotional about our spending culture. But anyone who spends emotionally spends irrationally andthat individual would soon be swallowed in the mug of debt. This doesn’t mean youshouldn’t spend on yourself for relaxation. Definitely, you need a treat sometimes, but “it can be avoided, then it should be avoided” This should be the mantra that govern spending on yourself.
6. Gain financial Intelligence:-
Not many business owners focus on building their financial intelligence. You can only manage money to the best of your knowledge and money forms answers to the hungry but men who satisfy the hungry. Which of the cadres you fall into is dependent on your depth of knowledge.
So these are 6 sure ways by which you and your business can live comfortably above theoceans of depth.
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