Is Credit Card Debt Keeping You From Growing Your Home Cleaning Business?
One of our members at MyHouseCleaningBiz.com recently asked how she can possibly invest in more employees and better equipment when she has so much credit card debt. When I started asking more about her situation, she revealed that she'd gotten to about $250,000 in sales but she's been struggling to get past that mark because she's saddled with so much debt. If she could only get out from under that her cash flow would improve dramatically. So her credit card debt was preventing her from growing her home cleaning business.
Her situation got me wondering how many others are in the same situation. I recently attended a seminar in which a man at my table who has about a $2 million/year business is struggling with cash flow. So it doesn't matter if you're just getting started, are somewhere in growth mode, or have a business doing millions of dollars. If you have credit card debt that's affecting your cash flow, you need to find a solution.
How to pay off credit card debt and grow your business at the same time
The first step in getting out of this situation is to get your personal finances in order first – THEN get started with your business. Here's a systematic way to pay off credit card dept.
- First, line up all your credit cards by the interest rate charged. When you know the card(s) with the highest interest rate, you'll know which cards to pay off first.
- Next, start making the minimum payment on all your credit cards EXCEPT for the card with the highest interest rate. On that card you'll pay extra - as much as you can possibly afford.
- Once you have that card paid off, take the entire amount you've been paying on that card (including the extra amount), and start paying off the next highest interest rate card.
- Once you've paid off that card you move to the next card and take the entire amount you paid on the first AND second card and apply it all towards the third card. Continue paying off the debt this way until all your credit cards have been paid off.
Example of a systematic approach to paying off credit card debt
Once your cards are paid off, you then take all that money you were paying on debt and start putting it into a savings account. If you were paying $500 a month towards your credit cards, you can now put that money into a savings account and you'll have $6,000 in savings after a year. That will help to improve your cash flow and get started investing the money back into your business.
Are YOU struggling with your financial situation while trying to start or grow your cleaning business? MyHouseCleaningBiz.com has been helping home cleaning business owners grow their companies since 2009. Join our community of residential cleaning business owners and gain immediate access to proven strategies for starting, building, and managing your cleaning business – today!
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