A Recession is No Time for Business Debt

A Recession is No Time for Business Debt

A recession is no time for more business debt in the real world of the ultra wealthy. Real wealth is not debt. Real wealth is assets, and cash is a superior asset in your business portfolio. This article is going to walk you through the logical thinking of success based on history. Tried and true methods along with the reasoning behind those who choose to build wealth rather than borrow it.

The first plan of action is to have a meeting and discuss the idea of going into debt to get out of debt. Talk about the recession and the line of business you are in. Have you lost sales? Have you had canceled contracts? Have you had accounts become delinquent?

The second plan is to develop a plan that will restructure your current accounts and streamline the process for greater output. If you are an assembly line manufacturer, Can you bring machines closer to cut in-house transport? Do you need two people at one station? What are employee training cost? How often is employee turn over?

Historically when you are in debt you find more work and work harder. This literally means sell more of your product. Once you have the orders then add a second or third shift to fill the orders if need be. Job creation is an eraser to a longer recession. Debt is a steroid to a recession.

Re-think your business plan. A recession is a time for one of two things; panic and go into debt, or think smarter on how to get out of debt while staying in the business.

The federal, state, county and municipal budgets are perfect examples of a recession is no time for more business debts. Politicians don’t balance check books they allocate funds. Who pays for their allocations, business owners and citizens?

I have learned over my life that there are four basic rules to follow:

  • The key to success is organization. In a recession historically those who plan a steady path and put back or save the impulses to borrow are the ones who have enough to invest in the future.
  • If you have a problem, don’t be afraid to spend money. That is not always easy in a recession, I know. Work out arrangements to solve your current debt realistically. Work is the other factor. Work generates funding.
  • It’s better to be rich than look rich. I have seen so many businesses fall flat because they wanted to look the part of having it all. When you say you will deliver, just deliver. Nobody cares if you use an antique printing press or a laser printer, just get the newspaper on the door step Sunday morning.
  • Treat others like you want to be treated. Work hard for them, by delivering on time, having it done right, and if you need help; simply ask when you need it so it doesn’t hurt someone else’s business.

The recession will only last as long as businesses choose to increase corporate debt. The reasoning is very simple; Debt is a hole. A business in the hole that claws at the sides only makes the hole larger. Thus, pulling in the surrounding businesses in the long run.

A recession is no time for more business debt. A simple statement, historically accurate, words of wisdom, and a way of saving your business.

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