Allen insists the League Two club owe too much money and steps will be taken over the next 12 months to at least half that figure.
Speaking at the club's AGM on Monday night he said: "The club carries far too much debt, with loans of £7million which needs to be reduced.
"Ideally, we'd like to get the debt to around half that. I think this business could sustain a debt of £3million."
Player sales seems to be the obvious option to raise cash. Jordan Bowery was sold to Aston Villa at the end of August and Tendayi Darikwa could be the next promising youngster to leave, with a handful of Premier League clubs watching the 21-year-old.
Allen also hopes to stage more concerts at the club's Proact Stadium to generate income, and believes the town's council could do their part to help matters.
He said: "There's a council loan of £960,000 with 4% interest charged and they should give serious consideration to writing it off over a three-to-five year period when you consider how much publicity this club generates for the town.
"We've been able to reduce operating costs. (Chief executive) Chris Turner has succeeded in making some dramatic reductions but we have to be a selling club and 70% of money raised will go to reducing the debt and 30% will go to the playing budget.
"We will put on more concerts after the success of Elton John coming here last year and hopefully make £300,000 - £400,000. We should be able to announce shortly who will be performing."
Turner added: "We've got to find other savings in the next 12 months to keep things on an even keel. We can't spend above our means so we do have to be a selling club. We have to produce our own players."