At the beginning of the year, it is important to evaluate the balance sheet and plan for the coming months. The task may not be the most pleasant or the easiest for those managing a indebted company.
But you can’t put off adjustments for later and expect the numbers to turn positive on their own. The solution is to get everything organized as quickly as possible so that 2016 will be a year of growth and not debt accumulation.
A debt-ridden business requires change
lack of planningOrganizing cash flow and controlling inventory are the main issues that drive entrepreneurs to negative outcomes, says Ana Paula Pavanatti, financial educator at management consultancy Reorg.
Added to this is the difficulty of separation business money of which it is personal, in addition to a disorganization in analyzing the accounts and understanding what the numbers represent.
If you add up all the reasons, the first piece of advice is for out of the red It’s about mapping the debt and understanding how the cash flow has performed over the past few months, taking into account the fixed costs and the potential surplus.
“If the manager knows how much capital is left pay off your debts, it becomes easier to negotiate with creditors,” explains Pavanatti. It is important that you define your action plan using precise numbers.
In other words, going to the bank and making a renegotiation proposal is not enough go into debt for a few months and then find that the company with debt cannot meet the new expected values.
Company vs Management
It is common that the entrepreneur of a company is also responsible for it company management. However, this is not always the best recipe. Enterprises require courage, creativity and time; Being a manager means planning, organizing, controlling and leading.
In practice, this means you need to know Add to characteristics and understand when one or the other should predominate.
If the entrepreneurial side is focused on production, the managing side must define the extent to which resources can be used, for example. without that balancethe most common result is indebtedness.
Don’t fall back on the mistake
If a debt-ridden company settlement of your debts, your manager needs to know that solving the problem will take time and dedication. This means that you must be patient and not be tempted to look for a faster solution that is not very efficient in the long run.
“The problem is that there are always tempting proposals in the business world, such as an extension of the credit line and low interest rates, but with enormous payment terms,” says the financial educator. You have to be very attentive in these moments in order not to get into such situations fall.