Sometimes it makes sense to spend more in the short-term for the eventual long-term benefits. No matter how nerve-wracking it may be to financially splurge for the future benefit of your company, agencies won’t get anywhere unless they can handle a little risk. If your investment isn’t quite going the way you planned though, you should have a few tools in your belt for dealing with debt.
Rework Your Budget
This should always be the first thing to do when your company accumulates unmanageable debt. Any unnecessary expenses should be cut, so you can start putting more money toward the never-ending bills. Start getting a little more conscientious about everything from company lunches to paper clips and supplies. Talk to the people in your agency so they have an idea of what exactly the company is up against. The more hands you have on deck, the more likely it is that you’ll be able to pull through together.
Handle the Big Bills First
This doesn’t necessarily mean the bills with the biggest bottom lines either. The ones you need to concentrate on are the ones that have extremely high-interest rates. While it may seem to be a better strategy to spread your money out amongst all the bills, you’re ultimately going to waste more money if you’re only ever paying off interest. Go over your bills, and start making some calculations about what it would mean to give far more attention to certain collectors over others. It should be obvious that you’ll save more over time if you carefully prioritize everything you owe. This doesn’t mean completely ignoring your other bills, but it may mean redistributing your money in a noticeable way.
Telling someone that you can’t pay a bill is never going to be a fun task, but may help more than you think. It’s easy to think that the companies you owe are full of automatons who don’t care, but you have to remember that those you owe are people just like you. Yes, they’re concerned with profit, but they also understand that it often makes more sense to work with clients rather than boxing them into a corner. Do your homework, come up with a specific proposal that may help you get your debt paid off faster, and then run it by a decision maker. At the very least, it’ll spark a conversation between you.
Protect Your Credit
One of the most important things about your business is your reputation. Prioritizing bills is fine (and necessary), but you should always keep your credit score in the back of your mind if you choose this strategy. If it comes to it, you may want to consolidate your debt. This usually means putting up some type of collateral to assure the debt consolidation company that you’ll be able to pay everything back in full. The plus side to doing this is that you may be able to work out a lower monthly payment, and you won’t have to worry about which company to pay first.
Talk to Someone Who Knows
One of the things you may have noticed about all of these suggestions is that it’s going to take a real investment on the company’s part to get right. Agency Brokerage Consultants has been working with insurance agencies of all sizes, and we’re proud to provide financial counseling to everyone — not just those in the middle of a boom. It’s our job to save you the two biggest resources you can possibly have in your business: money and time. We’ve seen too many agency owners fail to see opportunities available to them to save their business. It’s why we’ve developed a thorough process to uncover a plan that’s tailored to address your specific needs, so you get the counseling you need to thrive.
Talk to us today to find out more about what we do. We start by gathering the numbers together so we can see the big picture of how your finances are handled. Once we know we can help, we commit to exploring every possible avenue to getting your agency out of debt (and keeping it that way!)