Okoli Chukwudi: 5 Things to Do When You Find Yourself In Debt

Owing someone can throw you into confusion and panic and have multiple negative ripple effects on your personal and business lives. I’ve been there and back, and wish to use this medium to relate my experience.
I finished the university quite early. While in the university all I had wanted to become was an academic and a professor for that matter: nothing bad if I still end up there shaa. I studied Electrical Engineering and was already applying for my masters abroad, a few weeks after my final degree exams.

Few more months later and my desire and career goal had undergone a complete 180-degree turnaround. I now wanted to be an entrepreneur. The problem – I was not prepared.

How could I have been prepared?

I grew up in a family where businesses never seem to have worked. My father was not a business man and my mum was a civil servant. I was trained to love formal education with undying passion and view it as the most assured route to success.

By implication I had no business mentor around who I could have learnt the basic business skills from. All the people I admired were civil servants and professionals who do not engage in buying and selling of goods or services. To compound the challenge, I was endowed with a high-cerebral functioning power. In an era and country where the intelligent ones are not considered as business options, I had a hard nut to crack.

Everyone would say to me, Prof. please would you help me do this or that?

At times I even wonder where the idea of becoming a professor in life came from…me or them.

So you see why deciding to become an entrepreneur was a serious issue for me? I didn’t have the luxury of time; say three months, to decide on which business to do. Pocket money was not coming in again. Everyone knew I had graduated. So if there’s something I had to come up with to generate money, I’d better do that and fast.

In such a situation as mine every wave of business was just as valid as another for consideration: traditional, online and MLM businesses were all given their fair share of thought. With much hunger and responsibility pressure mounting on hourly basis for me, I finally decided to start with a particular business-MLM. That’s where the problem began- I went into debt.

Borrowing was the only seemingly justifiable option for me if I had to enter into business within that period. In fact it was an act of kindness from a friend who was touched by my then current predicament. And the moment I took the money, 50k, I entered into the real problem.

First of all my psychological balance was tilted and from the onset I started working to recover the debt and not to expand my business. With no agreed date for refund, I reinvested my first profit back into the business and it bubbled.

The more I tried to generate the cash, the more in debt I entered. As the business was going down, I had to borrow more to sustain it. Who knows: I may just succeed with another blow by borrowing Peter to pay Paul. Not wanting to communicate with my creditor became natural. It rode for long until salvation came from necessary knowledge.

Today, I’m free, due to invaluable lessons I learnt during my own dessert experience. Our experiences may differ, yet we still have the same principles to follow if you after already in debt, whether you borrowed from an individual or from an institution (like banks).

Call Your Creditors Before They Call You
Waiting for your creditors to call you is a bad practice. Be the first to call and explain your situation to them. Chances are that, they will consider you kindly and may offer to extend your payback period – thus allowing you the space to work out yourself. If they have to call you first to demand for their money, things may turn out differently.

Speak with your Mentor
Before you ever borrow to sponsor your business, speak to your mentor. The importance of mentors cannot be over-emphasised. His invaluable insight and advice may be the much needed difference between happiness and regret.

Even when you find out that you are already plunged into debt, still speak with him. The relationship I have with my mentor was one the reasons I share this piece as a testimony.

Concentrate on Business Expansion
While the plan to pay back what you owe will remain in the big picture, giving it immediate attention is not good for your business. That was a challenge to me.

Concentrate on expanding your business. If that becomes successful, then you will have more than enough to pay back and yet the business will still be sustainable. Remember you need your mental prowess to transact your enterprise, so focus on growing the business first.

Pay as Soon as you are Able
I narrated how I reinvested my first profit into the business? Well, that’s a poor business culture. Pay back what you owe as soon as you get it back. Remember it’s someone else’s money, and the person is counting the dates to reap from his/her investment.

Relax your Mind
The mind is the greatest software ever known to man. Worry and anxiety weighs it down and affects its functionality. According to healthline , quoting Harvard Medical School, studies have shown an increased rate of anxiety and panic attacks in people with chronic respiratory disease (COPD). COPD patients with anxiety tend to be hospitalized more often. Prolonged stress may lead to a general feeling of ill health.

Of course you won’t be able to raise the money from the sick bed. It needs be healthy, worry- and anxiety-fee, to fix issues, do transactions and lift you from the debt dungeon. So do not worry; worry does not solve any problem. It only creates one where there is none and magnifies infinitesimal issues to look like insurmountable mountain.

Truly, the psychological stress I suffered as a debtor was not a haven. No one should actually consider borrowing as I did. If you are running a small and medium scale business, then there are better ways to raise capital. The most potent is looking for an investor. If you are already into one, or a friend or relative is, then the above piece should be a bible to you.

Have you been there and back? Are there other approaches you used? Then let share with us.

Photo Credit: Carlosphotos | Dreamstime.com