Taking Care of Business: How to Avoid a Business Bankruptcy
Bankruptcy is the end of business. So, you need to ensure that you are taking the right steps to eradicating this problem. Of course, sometimes, bankruptcy is the only solution. But, you can ensure that you take stringent steps to stop this from happening. As an entrepreneur, bankruptcy is the last resort. Did you know that over 40,000 businesses per year file for bankruptcy? This can have a detrimental impact on the economy. But, it doesn’t mean that all enterprises need to start panicking. On the contrary, financial distress can be avoided.
There are some savvy ways that you can put off the threat of bankruptcy.
Organise Your Credit
When it comes to avoiding bankruptcy, you need to ensure that you are not burying your head in the sand. Make sure that you are aware of what you owe and how you owe it to. Contact your creditors. Ensure that you set up a payment plan. Speak to them about your current situation and ask for a reprieve. Once you have done this, you are in a good place to prospect for more work. But, don’t take a large paycheck just yet. Make sure that you are saving the additional cash and putting it towards to your debts. If you are struggling, ensure that you are making at least the bare minimum repayments.
Survival of the Fittest
Okay, we’ve established that you cannot take a huge paycheck. But, that doesn’t mean that you have to avoid drawing a wage. After all, you need to live. But, you need to make sure that you have enough to live on and run you business. Make sure that you cover personal expenses. But, leave enough in the bank to fund your venture.
Re-Evaluate Your Sales
What is your current sales pitch? Look at your projections and forecasting. Have you done enough to draw in sales? If so, why are you losing sales? You may need to go back to the drawing board and start again. You may have to revitalise your brand, website and marketing endeavours. After all, you cannot be stuck in the same rut forever. It’s time to shake up your image and see what you can do to draw people in.
No one likes implementing cost-cutting strategies. But according to Bolinske Law, you have to ensure that you are doing this once you have ascertained that you are in financial distress. Ensure that you are getting rid of non-essential staff. Put a halt on any impending projects that you have. Maybe look at downsizing your business premises. All of these things may not be nice to do, but if you want to hold on to your dream, it is critical that you do this.
When was the last time you haggled? Have you paid the same price for goods for the last few years? Talking to your suppliers and outsourced companies may be a good way of saving cash. Negotiate on price. You may find that you save a small fortune, thus unceasing your cash flow.