How to Avoid Accumulating Debt as a Small Business Owner

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Debt is something that everyone fears, regardless of whether or not you are an entrepreneur. Due to rising costs and the expenses involved with a small business, however, it can often seem as though it is inevitable. Fortunately, while it may not be easy, you can stay out of debt with some proper planning an a little bit of assistance. It will be a continuous effort but one that will certainly pay off when you do not have to worry about insolvency later on. Here are some of the tips you should follow to be financially stable as an entrepreneur:

Create a Realistic Budget

It is an unavoidable fact that you are going to need to spend a great deal of money in the beginning. While you can limit some of these costs, it is important to know where you will be unable to cut corners. Many an entrepreneur have been a little too presumptive about just how much they will be able to keep their expenses down. This is sometimes done in an effort to impress investors. However, what this means is that you will typically end up with a capital that is far less than what you really need. Therefore, it is better to be realistic about what you are going to need to get started. This way, you will not have to resort to loans when you discover that you are lacking the necessary funds. You should get some advice from consultants such as Global Resources LLC about coming up with a plan. For further information regarding their services visit

Always Maintain Positive Cash Flow


Many people mistakenly assume that positive cash flow means that you are incurring a profit. This, however, is somewhat of a falsehood. It can also be used to define a situation where you are breaking even. You may not necessarily be making a profit but you are certainly making enough money to cover your expenses. If you are finding it difficult to make a surplus of money, try first to make just enough to avoid debt. This can sometimes mean taking a few drastic measures, at least in the beginning. For instance, you could take a lower salary, for a short period of time. This money can be used to cover the costs of running the business. To discover other ways to maintain positive cash flow in your company, read the Global Resources Reviews frequently for ideas.

Avoid Credit Cards, Minimize Interest Rates

The easiest solution is not always the right one. The easiest way to bury yourself under mountains of debt is to charge everything to your credit card.

If you are going to have a company credit card, or if you’re thinking of signing up for merchant-issued credit cards like Walmart’s to accumulate points whenever you buy your business supplies, it is vital that you avoid using it as much as possible. If you will be charging expenses to it, make sure that you will be able to pay it back at the end of the month. If you do not feel as though you can, you should find another way to pay that expense. Similarly, if you are taking on a loan, you should pay careful attention to the interest rates. If not, you might quickly find yourself in a situation where you are unable to make the necessary payments due to accumulating debt.

These are just a few of the methods you can utilize to make sure that you do not find yourself in business debt.

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Jeremy Kaplan

A 50-something year old lifestyle, career, and education blogger based in Atlanta, Georgia. Years of experience in the office setting working with others and still loving it year-after-year.

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