The Four Main Causes of Business Debt Problems

We all know that corporate debt restructuring is the way to go when you get in over your head with business debt.  Before you embark on your entrepreneurial endeavors you should take the time to learn the four main causes of business debt problems so that you can avoid the most familiar pitfalls affecting companies today.

1.       Getting ahead of yourself.  Dreams and goals are very important aspects of having your own business but its important to be realistic about what your new company can achieve in the first few months or few years that it’s up and running.  This means limiting your spending to only the most necessary expenses.  It also means not getting involved in too many projects at one time and taking the time to nurture each project individually.

2.       Micromanaging.  Your new business is your baby and any mother will tell you it’s hard to trust other people with your baby.  No matter how tempting it is to try and do everything yourself, you will be better served to find others that you can delegate tasks to.  Attempting to turn your business into a one man show will only result in you being stressed out and tired when it’s time to perform a task that only you can do and that could put your business at risk.

3.       Being too lenient with your accounts receivable.  It can be hard to be a first time bill collector.  Especially when you’re just starting out and you want to make a good impression on the clients you have but failing to collect on the money owed to you can put your business into a debt cycle that is hard to get out of once you get into it.

4.       Paying your bills late.  Creditors can be your friends when you are in times of need but just as easily they can turn on you when the bills aren’t paid on time.  Keeping in good standing with your creditors will ensure that if you ever need an additional extension of credit it will be there for you.