How to stay away from debt in business

[Mandy96]

Debt is usually something that any business finds hard to stay away from, well I am not saying that it does not have its good days where it actually helps one to go back on their normal track but in usual cases they usually turn out to be something that destroys business which happens to be a bad news.

One can choose to stay away from debts but at the same time, some situations do showcase in which you have to give it a try because there will be no other choices than to consider it.

As an entrepreneur there are some risks you should not take because they might lead you to cases where you will have no other alternatives than to go for loans and once you start involving that to your business, it could end you to a bad situation. Not all loans are easy to pay back and once you can’t pay them back, it turns to debt. Imagine a business firm owning up to five billion naira, which must be paid back in little time, this will bring in nothing but more problems because you have to go for another loan to solve the present one. It is just like a case of going from frying pan to fire.

 

[Jasz]

The world of business is full of debt traps for startups to fall into. One of the most common traps is taking out a loan to cover expenses, especially when times are tough. Taking out a loan can seem like a good idea at the time, but it can quickly turn into a nasty mess if you don’t make your payments on time.



Many businesses fail because they go into debt to finance their operation. Financial debt is very risky. It’s risky for the business and it’s risky for the entrepreneur who takes on this debt. Debt can make a business more likely to fail, but that doesn’t mean that you should avoid debt all together. Debt can be a tool, but it’s a tool that you need to use carefully.



Personal savings might be enough but it's more secure. You just have to plan yourself well for a long time before venturing into business depending solely on loan, even if you are to take loan it should not be a 65% of your startup.


You can also solicit help from your trusted friends and relatives. It's not easy to do this but the main thing is to achieve your goal, you can be of help to any of them tomorrow.

 

[Kingsley]

Many people are of the opinion that there is no way a business can survive with accessing loan, which may later result to becoming a debt when they are not been paid back as at when due, as this may sound true in some situation, I still believe it is possible to live without accessing loans, there are somany organization I know very well that do not depend on loans and they are doing very fine. One of the ways we can do away with debts and loans is by living within your means and trying as much as possible to different between needs and wants, so it always better to go for what you need rather than going do what you want.

Then in a case where it seem impossible and you feel tempted to make some borrowings then it will be wise to get a very good plan on ground to pay back.I back in good time.

Although I know the situation of things here is terrible and to be realistic, it will be difficult for business organizations not to borrow, the inflation is so high and to keep up with the situation one must borrow but always make good plans for repayment.

 

[Caramelle]

A business can avoid going into debt by relying solely on its own finances to fund its operations. This can be done by managing its finances judiciously. Its spending should be based on a company budget that emphasizes its collections or revenues as the primary sources of funds. Its expenditures should be identified and analyzed and unnecessary items should be eliminated. It may require cost-cutting on salaries, rental, electricity, and other controllable expenses. It may also mean adopting practices that will eliminate excessive inventories and solve inefficiencies in its production or operations.

A business opting to stay debt-free will likely avoid expanding aggressively. In cases where a business needs to buy expensive equipment or expand its facilities to increase its sales, it will likely forego this opportunity and will choose to wait when it has accumulated enough funds.​

 

[eldavis]

When it comes to your business, always have a plan and work with it. Avoid unnecessary spending on things that are not needed at the moment, you should be able to know your needs and as well your wants.

 

[Sotherefore]

It is not really difficult for this to happen, but it just require discipline in the part of a business enterpreneur because that is just the only thing that will help every entrepreneur to stay away from getting a loan or being in debit .

If we are just discipline and try to start up a business with the little amount of money we have and try to grow that business to the best of our ability , the business will definitely be successful but a lot of people will be looking forward trying to get a loan to start up a business or to expand the business when it is not even the right time.

In most cases this will always result in business failure because in some instances , some of these people that are getting this loan the start of this business are not always able to pay it back

Personally if I am to start up a business , I rather try to raise the money I need and start up this business and if I can't be able to get of this money then I have to work extra to make sure the required money that is necessary to start up my business is available for me.