The Relationship Between Your Debt and Your Happiness (P.S. It’s Obvious)

In my last post about happiness, I wrote about 4 ways you can be happier and less stressed in order to run your business more effectively:

1. Do Good Deeds

2. Get Exercise

3. Get Hugged

4. Get a Pet

I want to keep on with this idea of happiness and focus even more closely on the things you can do to increase your happiness as it relates to money and finances, both personally and for your business.

It may come as no secret to you that debt makes people unhappy, but you’d be surprised at how little debt it takes to sour relationships, create tension and stress and ruin a business. Therefore, whenever possible, make sure that you and your company are carrying as little debt as possible.

To tell you to spend money paying down debt that your business doesn’t have might seem foolish, but what’s foolish is spending money that your business doesn’t have in the first place!

TIme and again I am brought in to resolve the problems of businesses with inordinate debt and money owed to a wide variety of lenders and creditors. As I look back to see what debt is really in front of us, who’s owed what and at what interest rate, when loans are coming due, etc., I often uncover a similar pattern.

Those who are in debt need not be in debt – or at least not the kind of debt they’re in.

They are in debt because they didn’t take the opportunity to pay down some of their initial debt when they had the chance. Instead, they sought to use their capital for further investment (or unsavory things), thereby driving themselves further and further into debt when paying that debt off in the beginning would have done wonders for the future of their business. That is to say, they would have been able to keep their businesses.

It is true that sometimes the answer to a cash flow problem is a loan, but I have been in numerous situations where any loan would have been throwing more money at a sinking ship.

That is why it’s important not to take loans to supplement loans. This may seem like obvious advice, but you’d be amazed at how often these are the problems I’m dealing with. When given the opportunity to pay the principal down on a loan or to pay off a credit card you’ve been using to finance your business, do it. Don’t think that buying a new piece of fancy equipment for your factory is the perfect way to grow your business faster or that hiring a new employee will solve all of your problems. Pay your debt down and continue to own your business. It will keep you focused by ultimately keeping you less stressed and helping you avoid crises and debt in the future.

Want to be happy at your job? Then keep your business debt free.

Is your business buried under debt or has it been? What did you do about it?

5 Warning Signs That It’s Time to Call the Turnaround Expert

As managing partner of GGG and the Turnaround Authority, I get the pleasure of providing guest posts by our other partners. The following post is by our newest Partner, Vic Taglia.
In business, it can be hard to see the forest through the trees, especially when it’s night time and you have no flashlight, the only supplies you have left are bubble-gum and a rubberband but your wife always tells you you’re no MacGyver, and the forest creatures are attacking you with cries of “blood!”
If you just said, “That sounds about right,” or “What the heck is this guy talking about” then you may want to read these 5 warning signs and see if it’s time to bring in some professional help.
  1. Fatigue – yours and your creditors. One late Friday afternoon, you’re beat, and you realize that you’ve spent the entire week talking to your vendors. You’re not placing orders or negotiating terms. You’re not swapping stories; you’re begging for extended credit terms. You’re pleading for deliveries without knowing how you’ll pay the over-90-day balances. You’re talking to the credit manager, not the sales manager.  And you have a new bank officer visiting Monday morning from some new department called “special assets.” This is creditor fatigue.
  2. You’re out of new ideas, and the old ones don’t work. You used to be able to cajole deliveries from vendors based on a promise, and you could make your promise reality. Not so anymore. Your product collateral looks old and tired. Your website’s most recent news refers to a 2008 press release about a new salesman (who you fired in 2009). And worst of all, you haven’t anything new to add that you want to share.
  3. A different look in your employees’ eyes. The old-timers wonder where your magic went. The newbies wonder how you ever got anywhere.
  4. Longer hours, less progress. You haven’t had a vacation in three years.  The lake/mountain/beach house is just a pile of cancelled checks and fond, but fading, memories. You’re missing ballgames and ballet recitals with your children. You haven’t had a nice dinner with your spouse since your anniversary; but maybe it was the anniversary two years ago. And the inventory in the warehouse seems to be growing in size and dust.
  5. Less cash, more debt, fewer receivables, more payables. You’re calling customers and finding they aren’t paying because your shipments are late/wrong/incomplete. Bankers’ reference letters refer to your account as “low five figure” as opposed to “high six figure.” You ask your CPA /attorney/friends for some advice on a new banker “who understands this terrible economy/insane competition/horrible cost pressures” better than the banker you’ve been with for ten years.

If any of these describe what you’re seeing, it’s time to call your friendly neighborhood turnaround professional.