Things that You Should Not Do When Your E-commerce Business Is in Debt

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50% of businesses fail as they do not have sufficient capital, poor arrangements of credit, and excess debt. Not a single business, irrespective of its kind, can be completely debt free. Whether it is traditional loans from banks or other financial institutions or other institutions that provide loans, all the business owners definitely take loans. Setting up an e-commerce business without a loan is practically not possible, and hence all the businesses definitely take loans. However, they can find it difficult to clear all their loans within a short period of time. When you are in debt, a few habits can be responsible for making it even more difficult to clear all your debts. The worst part is that certain habits can also push you into deeper debt. If you see that you are unable to make any progress, you need to check a few things.

Given below is a list of all the important things that you definitely should not do when you are in debt.

Keep making the credit cards charges

Making use of the credit cards constantly even when your business is in neck deep debt, will definitely cancel out the progress that you make towards paying off the debts. It has been observed that few e-commerce businesses tend to spend more in comparison to what they are getting back. This is responsible for making the debt amount grow with time. It is not going to shrink any time soon if you do not control your habits. You should cancel the credit cards, freeze or block them, and ensure that you are not spending much on your business. Clear all your debts first and then start investing in the business from the returns that you gain.

Opening up new credit cards

E-commerce business owners open up new credit cards every now and then so that they can successfully invest in their businesses, even when all their debts have not been cleared. When you are opening up one more line of credit, it means that you have to pay more for clearing your debt. Opening new credit cards is not going to help your business in any manner; rather it only contributes to building up the debt. It further makes it difficult to reduce the complete debt. Make sure that you open up a new credit card only after your debts have been settled.

Ignoring the bills of the credit cards

If ignoring a credit card bill could drive them away, that is what all the e-commerce business owners would do. Whenever an owner tends to turn his back to the credit cards, a huge financial storm will be brewing. Minimum payments tend to add up, the balances start to grow, and the credit also gets worse each month. You should open up the statements of the credit cards so that you can be aware as to how the investments are impacting the balance.

Paying the minimum

If you have decided that you are going to pay a huge amount of money to one lender for clearing your withstanding debt and pay the minimum to the others, it is absolutely alright. Otherwise, deciding to make a minimum payment to almost all the lenders is the worst possible decision that you can take, especially when you are neck deep in debt.

Spending money frivolously on your business

It is obvious that you have to invest in your business in order to match the competition that is present in the market. However, when you are already in debt, you cannot really afford to do so. You need to extremely careful about the money that you are spending. With all the returns that you get from your business, you should clear all your debts first, instead of investing in other things. You will definitely be able to grow your business, but you should never do it when you have to clear off a huge amount of debt. Discuss with your entire team and plan your budget, so that you can track all your expenses easily. Ensure that you are not building up your debt by spending more money here and there.

Skip saving

Saving money for the future business prospects is definitely necessary, but it is not something that you should do when you have loads of withstanding debts. Instead of saving money, you should try to clear the debts as soon as possible. As soon as your business is free from the debts, you can start saving as well as investing as per your business needs.

Pay debt relief companies without researching

There are many companies that would like the e-commerce business owners to believe that they are capable of doing things for the withstanding debts, which they cannot do. You need to understand that most of these companies are not at all worth all the trouble, or the monthly fees for that matter. Before you are enrolling in the services that they provide, it is crucial that you shop around, gather sound knowledge about the advantages as well as the disadvantages that are associated, and try to investigate if you can avoid the fee, and pay the withstanding debt without seeking any financial help. Going through debt consolidation reviews is also a great idea.

Paying debt without any proper plan

If you have decided that you are going to clear the debt on your own without seeking help from any services, you have the option of putting together a complete debt plan. You have to have proper knowledge of all the debts, the status of the accounts, and the money that you owe. Remember that the more debt you can clear, the better it will be for your business and you. You need to choose a particular debt and attack it in order to clear it once and for all.


If you are unable to control the above-mentioned habits, your business is going to suffer a lot. If you are not able to clear the debts diligently, you may even have to close your e-commerce business. To avoid such situations, take care of all these habits so that you do not end up building your debt.

Author Bio

Kelly Wilson is an experienced and skilled Business Consultant and Financial advisor in the USA.  She helps clients both personal and professional in long-term wealth building plans. During her spare time, she loves to write on Business, Finance, Marketing, Social Media. She loves to share her knowledge and Experts tips with her readers.

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