One of the hardest obstacles for a business owner to overcome is debt, particularly if the amount of debt is quite significant. Depending on how long you’ve been in business, this situation only grows worse because the debt becomes more bearable the more profitable or affordable you are.
Many business owners take out a sizable number of loans as they look for ways to finance their companies, to the point where the total amount of debt owing is sizable. Your debt begins to feel more like a mountain than actual money when your business is just getting started and is not particularly successful.
Some business owners also start their company while they are already carrying a sizable amount of personal debt, which will only make matters worse. It will be far more difficult to obtain a business loan in the first place if you are in debt on your personal account. Again, this will make things more difficult because whatever sizeable loans you are able to obtain would only have sizeable interest rates associated with them. As a result, your ability to pay off debt may reach a limit.
It is crucial to reduce your debt as soon as you can because of this. Don’t borrow money until you are certain that, even after loan repayments are tacked on, you will still turn a profit rather than just break even, as one business owner did selling simple incense burners, now they have regular customers they have since expanded into dragon incense burners.
In this situation, affordability is crucial, and you won’t ever be in a position where you are unable to make the monthly payments on any debt you have incurred unless you are confident that you will always make even a small profit.