“Asking for money can be a saving tool, but also take you to failure.”
This is a concept of Warren Buffet, none other than the renowned billionaire investor who has as one of its early learning to avoid debt.
And according to the expert, the main problem is that many entrepreneurs are accustomed to living in debt for post-credit for getting to another, thus forming an addictive debts that eventually becomes a vicious cycle behavior.
So to keep your business profitable and healthy growth, regardless of size, is suitable abide by certain rules and tips for healthy invest:
1. Start your business with a plan, a budget and sales forecast so you can clearly determine how much you’ll pay for a loan.
2. Avoid very long term loans. If your business is well planned, you should be able to pay the initial capital within no more than 12 or 24 months.
3. Budgets monthly expenses and stick to the discipline to prevent leakage of cash then you decompensate your credit payments and become penalties and interest with the consequent negative effect for your company.
4. Avoid using credit cards to fund your business expenses. These should be used only as a means of payment.
5. If you do not have sufficient financial knowledge, get advice with an accountant or an expert on the topic you can guide efficiently.
6. Avoid at all costs into debt to pay off other debts.
7. Define clear policies in your business to buy and sell, thus preventing impact on the discretion of debt.
8. Do not abuse your credit providers, instead pay them on time thus forming a healthy culture that will benefit long term.
9. Do not focus on lending money, focus on increasing your sales.
10. Do not apply for credit unless you really need it and evaluates conditions carefully.
11. Is a conservative investor. Invest only when you are 100% sure that you will win in the process. Robert Kiyosaki defines this as good debt.
Finally, you should always be alert and able to detect when something goes well, before they become a risk for your business.
You know you’re on debt if the financial structure of your company this money disproportionately held by third parties, whether suppliers, credit or financial institutions. What other advice would you have practiced in your company and you can share?