In today’s slow economic growth or total lack of growth you will be par dour to think that refinance your business debt is the best way to stay in business however this is actually a dome strategy for a small business or any business. If your debts are getting out of hand I will strongly advise you to review and start looking at areas where you can cut cost because by simply refinancing your business debt is just putting of today’s problem until tomorrow. The other factor is that now your debt has actually increased instead of decreasing. Let’s look at Greece the situation has moved from bad to worse and now they have no choice but to tighten their belts on spending. The fact that the central banks are involved in the refinancing package gives the countries refinance their debt an option that is not really open to businesses. If the countries default it has a major global impact because the money loaned to them belongs to other countries and investment house, if this happens the globe will definitely fall into a deeper recession hence the Central banks are helping to manage and minimise any risk of defaults. A business that fails to service its’ debt is declared bankrupt and this will cause job losses, do you remember Lehman Brothers is a modern day example of a company that couldn’t service its debts. I thought it was remarkable that Americans did not actually increase or refinance its debt but instead they are tightening their belts because if they don’t they will default and then lose their global credit rating of triple A stars. Can you imagine what impact it has on the global market if American the superpower defaults? I strongly believe businesses can learn from both Greece and America simultaneously. I am not suggesting that borrow or refinancing is totally bad because if you have a clear strategy and you need to borrow in order to implement the plan and the plan will grow the business then consider it.o matter what other authors or speakers are saying there is definitely only three ways that you can grow your business and they are:-
1) Get some new clients or customers
2) Increase the value of each sale
3) Increase the frequency of the sale
The most expensive option to implement is option 1 because the cost of getting new client is extremely high. Option 2 and 3 is the best option and don’t worry whether your clients could afford it or not because as long as you are providing a good service with a personal touch your clients will be happy to pay for your services. In our company over the last two years of slow growth we have manage to increase our price and we have not lost a client because of cost. We are unique because our competitiveness is not on price instead it is based on outstanding customers’ service, result orientated and a rapid delivery. In conclusion you should frequently review your debts constantly explore ways that you can reduce it long term.
