Does Your Business Have Debt Under $100,000? Here's How to Take Control of It.

The Mistake Business Owners Make

Here's what we see time and time again: a business owner gets a letter from the ATO, or a supplier starts chasing payment, and the first instinct is to throw everything at the debt. Cut costs. Slash staff. Scramble to make a payment plan. Do whatever it takes to get the number down.

The problem? That approach treats the symptom, not the cause.

If your business is generating the debt because something is broken underneath (pricing, cash flow timing, a client who doesn't pay, overheads that don't match revenue) then paying down the debt without fixing those issues just creates a cycle. You pay it off. It comes back. You pay it off again. It comes back again.

Sound familiar?

Fix the Business First, Then Fix the Debt

This is how we approach things at Thryvv.io, and it's the advice we'd give any business owner in this position.

Before you focus on the debt, ask yourself these questions:

1. Do I actually know where the money goes each month?

Not roughly. Not "I think so." Do you have a clear picture of your monthly cash flow, your fixed costs, and what you need to turn over just to break even? If the answer is no, that's your starting point. You can't fix what you can't see.

2. Is my pricing right?

One of the most common causes of small business debt is under-pricing. You're busy, you're doing the work, but the margins aren't there. If you haven't reviewed your pricing in the last 12 months, do it now. Factor in every cost, including your own time.

3. Am I chasing the right revenue?

Not all revenue is good revenue. If you've got clients who pay late, jobs that blow out, or work you take on just to "keep things moving," that could be the very thing dragging you backwards. Be honest about which parts of the business actually make money and which ones just make noise.

4. Are my overheads matched to my actual revenue?

It's easy to accumulate costs during a growth phase and forget to trim them when things tighten. Subscriptions, software, vehicles, rent, contractors. Go through every line item and ask: does this directly contribute to revenue right now?

5. Do I have a cash flow forecast?

Even a simple one. What's coming in over the next 8 to 12 weeks? What's going out? Where are the gaps? A forecast doesn't need to be complicated, but it does need to exist. It's the single most powerful tool a small business owner can have.

"But What About the Debt Growing While I Fix Things?"

This is where most business owners get stuck. They know the business needs work, but they're terrified of the debt creeping up while they sort it out.

Let's be direct about this.

Yes, there are technical risks when debt increases. Depending on the type of debt (particularly tax debt), there are obligations directors need to be aware of. We won't pretend those don't exist.

But here's the reality: if the choice is between making a token payment on a debt while the underlying business continues to bleed, or pausing to fix the engine so the business can actually generate the cash to clear the debt properly, the second option is almost always the smarter path.

The key question is this: does the business have a reasonable chance of turning around?

If the answer is yes, if the product or service is sound, if there's a market, if the problems are identifiable and fixable, then a temporary increase in debt while you make those fixes is a strategic decision, not a reckless one.

If the answer is no, if you've been propping things up for a long time, if the market has moved on, if the numbers simply don't work no matter how you run them, then continuing to trade and accumulate debt isn't courage. It's just delaying the inevitable, and it makes the eventual outcome worse.

Be honest with yourself. That honesty is what separates business owners who recover from those who don't.

A Simple Framework to Work Through It

Here's a practical approach you can start today:

Step 1: Get clarity on the numbers. Pull together your profit and loss, your cash flow, and your debtor/creditor position. If your bookkeeping is behind, get it current. You need a clear picture before you make any decisions.

Step 2: Identify the root cause. Is it pricing? Cash flow timing? A bad client? Too much overhead? A combination? Write it down. Be specific.

Step 3: Fix the root cause first. Make the changes the business needs. Adjust pricing. Let go of unprofitable work. Renegotiate terms. Cut what isn't earning its keep. This is where the real progress happens.

Step 4: Then address the debt. Once the business is generating sustainable cash flow, you're in a position to deal with the debt from a place of strength. Payment plans, negotiations with creditors, and ATO arrangements all work better when you can demonstrate that the business is viable and improving.

Step 5: Monitor and adjust. Set up a simple weekly or fortnightly check-in with your numbers. Cash in, cash out, forecast. Keep the picture clear and make adjustments early, before small problems become big ones.

When to Get Professional Help

For debts under $100,000, the steps above will get most small business owners a long way. The fixes are usually operational, not structural, and they're within your ability to make.

But here's the honest truth: if your debts grow beyond $100,000, or the situation becomes more complex (multiple creditors, ATO escalation, director penalty notices, or you're simply not sure whether the business can turn around), that's when professional support becomes important.

At Thryvv.io, we work with directors whose businesses face significant financial pressure. We help them understand their position, protect their personal exposure, and build a strategy that puts them back in control. If your situation escalates, reach out. That's exactly what we're here for.

Call us on 07 2143 6020 or visit thryvv.io to start a conversation.