Owning a small family business can be very challenging on many levels. There is always work that needs to be done and it usually falls on the owners to accomplish these tasks. There are always books that need to be balanced and bills that need to be paid. Most small business owners will honestly tell you that their work is never done, even when they have hired several people to help.
Reasons to Reduce Debt
One of the most stressful things that a small family owned business faces, however, is staying competitive with their pricing against the big box stores. At a time when the average consumer is going out of their way to secure a deal on everything they buy, small businesses cannot afford to be seen as “over-priced.”
Small businesses are also facing heavy competition from Internet sellers who can offer free shipping and cheaper prices because they essentially have no overhead costs. Consumers hoping for the best bang for their buck will ask a shop to match an Internet price, which will cut into your already narrow profit margin.
Small businesses may be able to adjust their pricing a little bit by cutting their profit margin, but this type of strategy to stay competitive can only work to a certain point. Business owners know they cannot reduce the profit too much or they cannot pay their bills.
So the most logical thing to do is look into how the business can reduce its debts. Some strategies may be very simple, such as changing service providers for utilities if possible, switching to Internet based phone services, and reducing petty cash expenses.
However, there are other ways that you may reduce significant amounts of debt. Corporate attorneys, such as Dorris and Giordano, PLC in Arizona (DG Tucson) can help you find ways to reduce and renegotiate your debts so that you stay liquid. They can also help alter and refine your business operations so that you can stay in business.
Types of Legal Help:
• Negotiate Terms On Equipment Leases. When you decided to lease certain equipment for your store, it may have seemed like a really good deal. Interest rates are super low right now, and renegotiating the contracts could reduce your debt burdens.
• Refinance Your Building. With interest rates in mind, you may be able to refinance your business building to reduce your monthly obligations and pay off other forms of debt.
• Negotiate Terms on Lines of Credit. Your attorney may be able to reduce your debts on lines of credit and credit cards.
• Changing Business Make-Up. Many small family-owned businesses operate as sole proprietorships. Your attorney can discuss different business structures, such as corporation, limited liability companies and partnerships that may be better for you financially.
• Collection Efforts. Your attorney may offer collection services or be able to suggest a collection service for any unpaid invoices that you have at your business. Many small businesses are afraid to pursue collections.
Your attorney may also have other suggestions for your business, such as ways to invest your money that can reduce your tax burdens. Debts are much more than paying the electric bill each month when you are a business owner. There are many obligations to many different entities. By being able to reduce any or all of these obligations, any small family-owned business will be able to remain competitive.
Debbie Nguyen is a designer and blogger in Atlanta with retail experience at a friend's specialty toy store, which was constantly working to keep afloat against franchises and e-tailers. In research, she has found DG Tucson utilizes simplicity of thought and method to guide their clients through the complexities of corporate law.
Thank you Debbie for your information and insight to debt restructuring the family business to stay competitive, We want this information to be shared with others who may be struggling to keep their family business going.