As an owner, the last thing you want to do is close your retail business down. But, if you keep going further into debt, you might not have a choice. See if you can follow these simple tips and turn your financial situation around.
The first thing you should do is make changes to boost more sales. The more sales you make, the more income you will have to tackle that pile of debt weighing down your business.
Think of low-cost adjustments — you don’t want to spend more money trying to draw in customers, only to have the plan backfire. For instance, paying for online ads can be a money sink that doesn’t bring more customers through your doors. Instead, create social media accounts and advertise without having to spend money. Apps like Instagram and Facebook are free, easy-to-use and give you direct access to your target demographics.
Here are some other great ways that you can boost sales:
- Set up sales programs/incentives for loyal customers
- Advertise special deals and discounts
- Raise the prices of retail items
While you’re boosting sales, you will want to see if you can trim the costs in your monthly budget in order to enhance your savings. One of the things you could do is sell store equipment and get gently-used replacements. Sometimes you can even lease equipment instead of paying full-price.
Here are some other great ways that you can cut costs:
- Lower utility costs with energy-saving methods (get LED light bulbs, lower the thermostat, install faucet aerators)
- Ask long-time suppliers for discount rates
- Pool resources with similar businesses to get supplies and services
What Happens If You’re Too Deep in Debt?
Sometimes, boosting sales and trimming costs isn’t enough. If your adjustments haven’t made a dent into your debt and you’re not sure about what to do, you should see a well-established corporate bankruptcy trustee to find out what’s the best way to get out of this situation. You could file for corporate bankruptcy. Or, if you want to avoid bankruptcy, another option is to apply for a debt proposal — this is a legal agreement between you and creditors that guarantees you’ll pay a lowered amount of debt within 5 years.
Business Insolvency Rates
You aren’t the only owner to get into financial trouble. Plenty of business owners declare insolvency after they’ve realized that they’re running out of credit and can’t pay back any of their loans. Running your own store is expensive, so it’s easy to slip up when there’s not enough cash flow.
Statistics show that approximately 7000 businesses go bankrupt across the country every single year — and this doesn’t even cover debt proposal filings. Smaller businesses with only a handful of employees will have a harder time making these ends meet and getting extra help from banks. While this problem isn’t ideal, you should know that you’re not alone in this.
If you think your store is drowning in debt, you need to make some changes and make them fast. Follow these tips to boost your customer sales and cut down monthly costs so that you can tackle the problem faster. You just might be able to pull your business out of the deep-end.