Due to their desire to work for themselves, many Americans are starting small businesses. When you own your own company, you set your own hours and work in an industry you are passionate about. However, managing a business, especially its financials, can be challenging. In fact, if you are like most small business owners, you have accumulated some debt, especially if you have expanded your company. Therefore, these are a few tips to help you manage your business debt so your company will succeed.

Evaluate Your Budget

Your first financial task should have been setting a budget for your company. However, if you have accumulated debt, you may need to reevaluate. Search for ways to cut that do not involve laying off employees, which can severely damage employee morale, dedication and motivation. Instead, look for small cuts you can make that won’t impact your overall company rather than huge cuts that could cripple production or cause other issues. Are there efficiencies you aren’t taking advantage of? You may also discuss discounts with your suppliers or lease rather than purchase new equipment. Avoid starting major projects when you have uncontrolled debt.

Focus on Cash Flow

After you have recalculated your budget, start searching for ways to increase cash flow. Review your productivity and employee skillsets. Are they adequate? Do your employees have the skills to efficiently produce your products or provide your services? You may consider providing additional training or paying for seminars on topics where your employees lack skills or knowledge. Then, invest in technology that makes their jobs easier and more streamlined. Search for technology that offers automation for redundant or nondetrimental tasks so your employees can focus on key processes.

Review your marketing plan and look for holes. Then, analyze your sales to identify any products or services that have low sales. You can either improve your marketing of these items or remove them from your company’s product or service lines. Also, talk to your customers and ask for suggestions.

Be Careful About Taking Out Loans

You may think that the best solution to extensive debt is taking out a loan that will consolidate it. However, this is not always a good idea. You need to calculate your ability to pay the loan back. It is also tempting to ask for more money than you need, but even if you can make the payment, your growth may be restricted for the length of the loan term. In addition, incremental payments are common with these types of loans, and these types of loans have high default rates. You may also be able to renegotiate with your current lenders.

If your small business is drowning in debt, there is hope. You can make a few changes to your operations, budget and loan structures to ensure your longevity.