Entrepreneurs have a big task ahead of them when it comes to financing ventures and keeping up with their finances. Strategic planning is key and can be vital to their ultimate success. Whether it’s in business, money management or everyday life, if you set a clear strategy you can always lead a more focused way of life and be more successful in business.
It is not unheard of being in debt, in actual fact many people experience this through a lack of simple organisation skills with their personal finance; people get carried away spending especially around this time of year and the winter season of Christmas.
When it comes to debt in business, companies are at huge risk too if they don’t have a sound financial strategy in place. The fact that debt can bring an entire business to its knees is terrifying for all involved, with employees losing their jobs in the shut-down. Whilst debt can occur as a result of misfortune, a great deal of consumer debt happens simply through this lack of financial planning or foresight and in any circumstance it can be an emotionally overwhelming and an intimidating subject to talk about, leaving individuals unsure how to cope with the anxiety and stress of managing their money. Without a plan, debt can mount as interest and late fees accrue, leaving those in debt more vulnerable.
The Entrepreneurial Approach
Every entrepreneur will be overwhelmed with not only general bills but bills for the finance of their start-up business. You may end up harassed by creditors and even crushed beneath the weight of a debt that seems you are unable to control. Fortunately, debt is a problem that can often be solved by being strategic and you only need to take inspiration from the role of a project manager to get you on your strategic path forward.
Just as a successful project manager oversees a large project by careful planning, so can a person in debt begin to solve their financial problems by creating a debt strategy and then sticking to it. With a little work you too can approach your debt by setting goals, creating a schedule and making a plan of attack for getting yourself out of debt. Here are a few tips on how to do this successfully:
Identify Your Goals
The first step in any project is to identify the goal. When it comes to your debt, find a realistic and achievable goal. Depending on the extent of your debt, setting out to eliminate it all in one goes may not be the best approach. You may be better off taking a longer term view. If you’re feeling overwhelmed by debt, you may want to start with a slightly more modest goal when making your plans.
Regardless of the financial goal you set yourself, always do your homework first. Find out exactly how much you owe, to who and when -then list it all in one place so you can easily refer to it. This check-list helps to identify the source of your debt, whether from credit cards, bills, or poor spending habits.
When setting your goal to eliminate your debt with an affordable plan don’t go for the quickest cure – use all research services and tools available to you. Look into the work of debt charities and how they partnership with businesses as they have extensive expertise in debt management, are free to use and very supportive. You may even be able to clear your debt through free debt solutions such as an IVA which is an Individual Voluntary Agreement; a structured plan which can leave you free of debt and worry, whilst providing a payment plan that you can live with. In my opinion, a much better option than declaring bankruptcy!
Now that you have your strategy in place, it’s time to create your own ‘deliverables’ as they say in the business world or end goals as they’re more commonly known. These are what your project needs in order for you to meet your goals. When it comes to personal debt, this is about more than just money. Since the money will have to come from somewhere, your deliverables may take the form of increased income through additional jobs, or even more hours at your current job, it could even mean the sale of your possessions, cashing in on savings accounts or retirement funds.
List all your deliverables down and the potential ways you can meet them. Your goal of being debt-free is in sight and you can always ignore some ‘deliverables’ if they prove unworkable for you.
Create a Schedule
Now that you have your goals and deliverables in place, create that schedule or timetable for reducing or eliminating your debt. Cross off the figure owed each day – as and when you make a payment, as this will only motivate you further in achieving your end goal of being debt free.
If there are any changes in your plan or personal circumstances consolidate or ‘snowball’ some of your debt. Make an estimate of when various bills will be paid off, so you can revise your strategy accordingly.
Remember, your financial worries are nearly over and now that you’ve set your goals, deliverables and a schedule for your debt reduction, the hard work begins now. Budgeting, spending reduction and debt consolidation are difficult and often involve sacrifice but with a sound strategic plan and a clear goal, debt doesn’t have to be overwhelming or insurmountable.