This week at Forbes.com, Proven Media Solutions founder CEO Dustin Siggins revealed that debt is more than a business’ financial burden. It’s more than just the cost of interest and its drag on your bottom line. It is the bad form of a quick fix for problems best solved without incurring debt — problems like needing more savings or wanting more favorable terms for purchases, with solutions such as reducing unnecessary expenses, streamlining operations, and investing in long-term scaling.
Being too quick to seek a loan to see you through a cash crunch may actually be the worst move because it makes the foundational problem worse while adding interest to monthly overhead.
As Dustin pointed out, many small businesses took on debt before and during the COVID-19 pandemic — not to scale, but just to survive when non-debt solutions would have worked far better. He counsels small businesses to reduce fixed and variable costs first, and invest the savings in a) debt elimination, and b) long-term opportunities for scaling.
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