Photo by Brett Sayles from Pexels
Introduction
A lot of people, ladies especially, freak out when they hear the D*** word. Oh wait a minute, not the other “D”, I meant debt. What people fail to realize is that debt is only a tool just like a kitchen knife – you can either use a kitchen knife to aid in the preparation of a delicious meal or use it to stab yourself. Debt is the same, you can either use it to grow your business or commit financial suicide.
Some benefits of debt
Poultry farmers take on debt for the following reasons:
- To smoothen cash flow: Egg producers especially use debt to help them during the four-month period when no revenue is flowing in because the birds haven’t started laying. Money from debt can help farmers purchase feed and pay workers during this tough period.
- To purchase equipment: So you are running a profitable poultry farm and decide you want to upgrade to an automatic water delivery system. Do you wait to save up thousands of Ghana cedis or apply for a loan to fix it? I know you’ll make the right decision.
Take on debt strategically
The fact that I said debt can be used to grow your business doesn’t mean you should recklessly go in for other people’s money. You must remember that there is hardly any free lunch. Same way pretty much no one just dishes out huge chunks of money to a random entrepreneur, debt comes with interest payment so be careful. If you could remember, I spoke in a previous post, tinyurl.com/y8doqvxn I spoke about how you can raise money to start or run your operation and I also strongly advised that as a starter, try to use your own money to build something tangible then later, you can think about chasing others funds. If you apply the strategy I just outlined in the previous sentence, you would understand the exact amount of money you need to prevent over-borrowing. Over borrowing can be dangerous to your business because it implies you have too much money on your hands which may cause you to scale your business prematurely or pay unnecessary interest expenses.
Conclusion
I hope this post has helped change your perceptions on debt and that you now recognize that debt is a tool when used correctly, could transform your fortunes. Good luck on your poultry farming journey.
Pkom 