I like to measure financial health in my personal life as a strong net worth… and no debt.
In business, in addition to having a strong net worth, financial health includes the ability to generate excess cash… with no debt, or a modest amount of debt.
To me, creating and improving financial health in your personal life and in your business, and doing it with very little, if any, debt is a worthy goal.
When I think about debt, I am usually thinking about how to avoid it, or if there is debt existing in the business, how to pay it off on an accelerated schedule.
That’s how I am wired. 😊
Here are four tips for managing debt in your business:
- Recognize that most small business debt is personal debt
- Consider the downside scenario when borrowing
- A revolving line of credit should, well, revolve
- Reducing debt is the goal
I talk more about each tip here.
NOTE: You can grab a copy of my newest book at Amazon.
A Quick Start Guide to Financial Forecasting: Discover the Secret to Driving Growth, Profitability, and Cash Flow Higher provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. It will transform the financial future of your company and help you make better business decisions. Get the book at Amazon.
Comments