The recession is over. For your business, that may mean it has stopped getting worse. Still, for many businesses things are looking up. Surprise, this is a time to be very cautious.
It is like finishing a diet. You are so glad to be done, that you start right in on the pizza and burgers. “Yes, I’ll have fries with that.”
And the clothes you have been putting up with are too big. Time to go shopping, right?
First things first…
If your business has gotten in debt, here is the first step as the recovery kicks in:
STEP ONE: Be sure you know your debt situation.
List all obligations:
- total balance
- interest rate
- debt covenants
Debt covenants are those promises you made to the lender about minimum balances, debt coverage ratios and the like.
Don’t forget to include personal debts you have used for the business. For planning purpose, you need to look at the entire picture.
Are you surprised?
You might be. During the recession many business owners did not have a ‘ceiling’ already chosen, a business level of debt they would not exceed.
If you did not, you may not have been paying close attention to the total amount. That is okay, now you know.
Next blog-post…STEP TWO: Be cautious as revenue improves.