One funding approach to building your business is to use debt. If that debt is planned and controlled, this can be a viable method. However, in many cases debt becomes the go to method for funding business costs, and, as a small business owner, the added debt and added interest sends you into an unstoppable spiral of owing people to operate your business.
Luckily, funding your business growth using debt is not the only solution. Choose one (or more) of the following solutions to cut back on (or eliminate) how much debt you use in your business:
- Spending Plans
- Savings Plans
Each of these solutions focuses on having a better understanding of your money numbers, and using those numbers to save more money, because, the more money you save the less debt you will need to run your business.
Each of these solutions also builds upon the previous, so if one solution seems too scary, or too much work, take a step back and try a solution requiring less commitment, and build your saving muscle over time.
Let’s take a look at each solution and how it can help you save money in your business and be less dependent on debt.
Spending Plans (Lowest Commitment)
Spending Plans require the least amount of commitment to save money in your business, and also require the least amount of time to create and put into action.
If you need to save money fast – a Spending Plan can help.
If you struggle to save money – A Spending Plan is the place to start.
A Spending Plan consists of two main parts: researching the costs of the expense then cutting back on those costs.
When you don’t research costs first, you will often jump into a decision for your business without a real understanding of what it will cost you. By researching the costs of the expense you get clear on what you need, why you need it, and the true total cost of the expense.
Once you are clear on the different costs, you can start finding places to cut back on those costs. Cutting the costs in an expense instantly saves you money while still achieving your goal.