How to Operate a Business Debt-Free

When you're just starting out with your new business venture, you are very vulnerable. Financially speaking, you've got a lot to prove to yourself and your market. One of the things that you need to do is start establishing your operating expenses and try to aim for being profitable in as reasonable an amount of time as possible. One of the things that complicate this goal is mounting debt.
Debt, of course, is something that most people are familiar with, whether it is applying for something personal, such as a mortgage for a residence, or paying off the student loans that made a college education possible. But debt in business, while it may sometimes be necessary, must be managed carefully. Debt that gets out of control can sink a company. But is it actually possible for entrepreneurship to operate debt-free?
With some discipline, consistency, and proper risk management, it might be!

Transcript

1. HOW TO OPERATE A BUSINESS DEBT-FREE
2. All Rights Reserved A N D Y ® | Copyright 2018 HOW TO OPERATE A BUSINESS DEBT-FREE ◉ When you're just starting out with your new business venture, you are very vulnerable. Financially speaking, you've got a lot to prove to yourself and your market. One of the things that you need to do is start establishing your operating expenses and try to aim for being profitable in as reasonable an amount of time as possible. One of the things that complicate this goal is mounting debt.
3. All Rights Reserved A N D Y ® | Copyright 2018 HOW TO OPERATE A BUSINESS DEBT-FREE ◉ Debt, of course, is something that most people are familiar with, whether it is applying for something personal, such as a mortgage for a residence, or paying off the student loans that made a college education possible. But debt in business, while it may sometimes be necessary, must be managed carefully. Debt that gets out of control can sink a company. But is it actually possible for entrepreneurship to operate debt-free? ◉ With some discipline, consistency, and proper risk management, it might be!
4. HAVE A BUSINESS PLAN 1
5. All Rights Reserved A N D Y ® | Copyright 2018 HAVE A BUSINESS PLAN ◉ One key to managing, reducing, or even eliminating debt is knowing how to run your business. Think about where you are going to be spending money, and how you are going to achieve profitability. A business plan is an essential part of this strategy, and it provides you with the roadmap you need to follow so you can minimize impulse moves and needless spending.
6. DON’T USE YOUR HOME 2
7. All Rights Reserved A N D Y ® | Copyright 2018 DON’T USE YOUR HOME ◉ You may be tempted to increase your capital by using your home as equity for some of your financing. Not only does this create debt, but it also puts you at risk, should your endeavor fail. Now you'll also have to give up your home when the time comes to collect on debts that you may not be in a position to pay.
8. MINIMIZE LOANS & CREDIT 3
9. All Rights Reserved A N D Y ® | Copyright 2018 MINIMIZE LOANS & CREDIT ◉ Depending on the type of business you're running, avoid excessive use of credit cards, a line of credit, and business loans. All of these are straightforward methods of accruing of debt. Try to operate on a cash-only basis as much as you can, since loans and debts form slippery slopes that get more and more difficult to navigate.
10. DON’T LEASE & DON’T BUY NEW 4
11. All Rights Reserved A N D Y ® | Copyright 2018 DON’T LEASE & DON’T BUY NEW ◉ Instead of renting or buying brand new equipment, try to purchase older equipment, and negotiate, if possible, for even lower prices. You should strive for savings on everything from office appliances to company vehicles.
12. TAKE IT SLOW 5
13. All Rights Reserved A N D Y ® | Copyright 2018 TAKE IT SLOW ◉ Don't do—and spend—everything at once! Be meticulous about tracking your spending and monitor it over time. Hire staff slowly, rather than filling out every role at once. Focus on long-term, organic growth, and only resort to outsourcing when it's critical to do so.
14. JUST SAY NO 6
15. All Rights Reserved A N D Y ® | Copyright 2018 JUST SAY NO ◉ As a business, you will have to start learning to say "no" to potentially harmful or loss-heavy requests. For example, people may call you up when you start your business and ask for you to do things and "help out," but agreeing to take on too many of these requests can hurt your business's productivity and profitability. ◉ The key here is to be diligent about monitoring your finances. You can’t know how much you’re spending or earning if you don’t pay close attention to the movement of money in your business!
16. THANK YOU! Andy S. McConnell Email: advisor@andysmcconnell.international Office Tel: (239) 351-5971 Mailing Address: 1521 Ritchie Hwy #100, Arnold, MD 21012 PO Box 71 Website: andysmcconnell.international Facebook: https://www.facebook.com/andysmcconnell A N D Y ™ Copyright Andy S. McConnell, 2018 Maximizing Profits in the Service Industry