I happened to stumble upon this Reddit thread where the poster seems to fall into a debt trap by sacrificing his personal finances to serve his clients. After five years in business, the guy now has 8 million in debt. In his desperation, he brought his situation to social media, asking for help.
The common response was to shut down his businesses that don't add to positive cash flow for him. Many Redditors are wondering what the purpose of his business is in the first place. Living in debt makes life more difficult. I asked AI to provide an action step on how to escape such a situation.
It all starts with getting the big picture and knowing the sources of losses. One must list all the debts.
What follows is to resist the temptation to borrow money to pay debts. This makes the situation worse. The goal is to stabilize cash flow.
The third step is to negotiate with creditors. Discuss restructuring with lower interest and extended payment.
I think the advice of Redditors to close unprofitable businesses is also a wise move. There is no use in continuing a business that doesn't serve the reason why it was established in the first place.