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By Jim McKinley
Special to the Financial Independence Hub
You want your business to succeed and generate a profit; however, an unexpected expense or change in the economic climate can lead to a deficit.
In fact, an estimated 70% of small businesses have outstanding debt, and businesses in Toronto, Canada, are no exception. While it may cause you to worry about your business’s future, you can proactively take steps to get your business out of debt.
Small Business Grants
Search for grants for small businesses, which provide money you won’t need to repay. The process of finding the right grant, especially one that you qualify for, may seem tedious, but you can find them.
Before beginning the grant application process, you should have created a business plan. Make sure it includes a detailed description of your business with clear objectives. You can use this plan to show you’re serious about your business. Besides applying for grants, you can use your plan to intrigue prospective investors.
As you’re searching for grants, look for ones specific to your business type. Some examples of grants for Canadians include the Amber Grant and Cartier Women’s Initiative Award.
After finding grants that you qualify for, you’ll need to complete an application that highlights the business’s best attributes and usually include your comprehensive business plan.
Small Business Loans
If you’re merely going through a hard time at the moment, consider a small business loan. In most cases, lenders only extend these loans to companies that have been in business for at least two years.
You’ll also need to have a decent credit score to qualify. Additionally, the lender will want to see your personal and business income taxes as well as income and balance statements. The lender may also ask to see your business plan.
Carefully analyze your Budget
Know your company’s finances. Review where your major spending is and determine if you could reduce or eliminate any of it.
If you don’t already have a budget, create one. Make sure you factor in industry and seasonal trends when determining your estimated revenue.
Try speaking with your suppliers to decrease your spending. You could also contact a professional financial planner. You can find one in Canada by using the Institute of Advanced Financial Planners’ search feature.
Check for any Money Owed to You
Take a look at your outstanding invoices. That money could help you get out of debt. Send a message to those clients as a reminder of their obligation.
If you notice you have several clients who owe you money at the moment, try offering them an incentive for early payment. This may encourage these clients to pay you on time.
Evaluate your Sales
Start evaluating your sales and find the products or services that bring in the most revenue. Focus your efforts on these areas in terms of your marketing.
Getting out of Debt Is Possible
You can get your business out of debt, especially if you make the right financial moves now.
For more financial advice, check out Financial Independence Hub.
Jim McKinley hopes to use his knowledge as a retired banker to help people make sound financial decisions.
