Managing debt in any business, especially a small or new start business is essential for the health of the business and can make the difference between survival or not.

• Budgeting is all, work out a budget – with your financial adviser if needs be, but be strict and work within your budget at all times.
• Calculate a profit and loss account regularly. What have you earned? What did it cost you to earn it? What have you committed to spend? What is left? Don’t spend what you haven’t got!
• Use accounting software, your financial adviser will advise you, or you can use a ‘house’ accounting platform like Excel. Make a spread sheet, enter all of your expenses, all of your income, and anything else that is coming in or going out of your business account/s.
• Keep an eye on costs. Sometimes it is less expensive to ‘buy a service in’, like book keeping for example – the idea may frighten you to death (almost), you are better off spending your time doing what you are good at. It will cost you a few bob but it will be worth it.
• Be tight with your money, spend it wisely when you have to but remember the money you haven’t spent is still yours, the money you have spent (carelessly) is gone for ever.
• Avoid expensive ways of taking money – unless you have to.
• Cash flow, or lack of it, kills businesses quicker than anything. Reward your good payers for paying early or on time. Talk to your slow payers and offer them an inducement to pay earlier. If they are bad payers get rid – they will kill your business!
• Monitor your invoices out so that people do not take too long to pay, and so that your payments out are not attracting interest charges for being late.
• Be careful when dealing with large companies and public authorities, their payment arrangements may be different, some may take up to 3 months to pay, this will affect your cash flow.
• If you feel that things are getting out of control, talk to your bank, talk to financial advisers, even family, but do not ignore it will only get worse. Running your own business is great but you need to make money doing it or it will become a nightmare.