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Tips 28-30

Tip #28: Reducing your debt takes discipline

Excessive debt can drain your finances and damage your business's health. Reducing your debt doesn't have to be difficult, but it takes discipline. Here are some tips …

Tally up your numbers

Start with an accurate financial picture. How much do you owe and to whom? Who owes you, and how much? Then create a 12-month financial forecast to determine how long it will take you to earn what you owe, including any late fees. Finally, collect what your customers owe you, including any late fees.

Liquidate what you can

Turn all but the essential items into cash to pay down the debt even further. Consider liquidating your aging or obsolete inventory, or selling off surplus equipment, and use the proceeds to reduce your debt.

Prioritize your payments

Decide who must be paid right away, and which bills can wait. Then, if your credit is not too far behind, get a new card with low interest on balance transfers and move any high-interest debt to the new card. (Be sure to pay off your lowest balance card first.) And keep expenditures to a minimum until everything's paid off.

Get the experts to help you

Call your bank and talk to a business advisor or a counselor who specializes in debt consolidation. They can give you advice on how to minimize your debt. But always remember to keep your critical suppliers out of your debt-restructuring agreement so your vital supply channels will remain open.

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Tip #29: What to do when growth takes you by surprise?

While growth may be something that you're working hard for, it can also occur unexpectedly. The situation can be a springboard to success if you can capitalize on the opportunity, or it can be a real challenge if you are unable to keep up with demand. Here are some steps to help you manage unplanned growth:

Fast-track your growth plan

If you expect the growth to be permanent, you need to have a long-term plan. Move quickly on all fronts to develop a strategy so that your processes and resources can meet higher demands.

Use temporary resources

If the growth is only a temporary spike, you may be able to manage it with temporary resources such as outside services or facilities. These can also be a valuable stopgap to meet demand while you look for permanent solutions to longer-term growth needs.

Slow down

Give yourself more time to gather the permanent resources you'll need going forward by stretching timelines or temporarily slowing other areas of your business where possible.

Stay profitable

Don't let your business become overextended. Consider investigating alternative sources of cash, such as borrowing, tapping into emergency funds, injecting personal capital or speeding up your billing processes.

Learn more

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Tip #30: Risk is everywhere. That's why you need insurance.

You can't always avoid risk, but you can insure against those situations. A business insurance broker can help you identify the risks your business may be exposed to and provide customizable insurance solutions to cover these risks.

To ensure that all your obligations are covered, it's important to consider separate policies for the business and your family. Some important kinds of business insurance coverage to consider include:

General Liability Insurance protects your business from lawsuits due to injuries or damages to others or their property cause by your products or while on your premises.

Trade Credit Insurance to protect your accounts receivable from losses due to a customer's inability to pay or insolvency.

Commercial property insurance protects property owned by the business against situations like fire and theft.

Error and Omissions coverage protects you from lawsuits made due to a mistake or oversight in the performance of professional services.

Commercial auto insurance covers vehicles owned by the business in the event of an auto accident.

Business Interruption Insurance helps cover lost earnings and other expenses if there is a temporary shutdown of your business due to an insured situation.

You could also consider a business owner's package that bundles your most essential insurance coverage into one convenient, cost-effective policy.

Group benefits insurance, financial protection for common health-related expenses for you and your employees.

Business creditor insurance to help cover insured outstanding balances on common business lending products.

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