Guide to Cutting Your Business Debt

Add it up

Get the big picture by determining exactly how much you owe and to whom. Then make it easier to pay creditors by limiting your expenditures. Analyze every penny you spend, from pencils to wages to shipping to advertising.

I recommend: Figure out just how bad it is with the free online CCH Debt Calculator. Use SCORE's template to create a 12-month sales forecast to help see if you'll bring in enough to cover the debt.

Prioritize your payments

You must deliver products or services to keep your customers and thus keep the business running. With that in mind, determine who must be paid now and which bills can wait. Offer to barter with your creditors instead of paying cash.

I recommend: For advice on your particular situation, get a free consultation with a SCORE volunteer. Join a local bartering consortium or the International Reciprocal Trade Association to keep future debt in check.

Collect money owed to you

Sometimes debt doesn't come from spending too much; it's from collecting too little. Look for money everywhere from tax reductions to past-due customer accounts.

I recommend: Encourage timely payments by imposing late fees. Use one of these templates to reminder/past-due notices. Don't hesitate to call or visit your customer in person to discuss late payments. Setting up a payment plan with your customer can be one way to get the cash flowing your way. Consult the IRS's business expenses checklist to be sure you're taking every possible tax deduction and tax credit.

Don't go it alone

If your debt is still staggering, turn to a debt-busting professional to help you regain control.

I recommend: Companies like Financial Technologies offer debt relief programs and counseling that can help. For constant inspiration on controlling your debt, turn regularly to a debt-management blog like The Debt Dr.'s. If there's really no way out, use FindLaw's checklist to determine if bankruptcy is the best way out.