Life in business can be difficult and frustrating. This is especially true for small businesses in an economy like the one you are facing today. When you combine this with all the competitiveness out there, you are truly looking at a difficult situation. Growing pains, investment headaches, employees, overhead costs, and supplier demand are all things that you are going to have to worry about. When you first started your business you probably never even though about debt or bankruptcy, but it only takes a few wrong mistakes and you could be staring down this very real loaded shotgun. This is why it is always important to have some kind of backup plan in place and here is how you can avoid bankruptcy if worst comes to worst.
Get rid of non-essential expenditure
You can ask anyone and they will tell you that they are paying for products and services that they aren’t taking full advantage of. This could be anything from a gym membership to a full dish package that gives them access to over five hundred channels. Well, the same is absolutely true in the business world as well. Nearly every company out there is dishing out money for something that they aren’t using to its full potential. It might take a little bit of time and work to search your financial records and find out where these expenditures are, but once you locate them and cut them out, you will potentially save yourself a bundle of cash.
Yard sale those business assets
Just like non-essential expenditures every company out there has some kind of business assets that they are using. Maybe you have a fax machine that you haven’t touched in the last ten years. Maybe you have a warehouse that is fully equipped with stock that you aren’t moving. Whatever the situation is if you consider selling off some of these items it might prevent you from filing for chapter eleven. This can also free up a bunch of space in the process.
Get your debt payments in line
Paying back debts is without a doubt extremely important for any businessman, but it is even more important to make sure that you are paying those debts back in a strategic manner. You will want to pay back those debts that are accruing the highest amounts of interest. With that in mind, you never want to leave one vendor or creditor unpaid just so that you can take care of the one that is charging you the highest interest rates. In these situations, it is best to pay vendors and creditors equally. While The Better Credit Blog recommends removing the bankruptcy from your credit, it is best to avoid it whenever possible and this repayment method will offer that.
Negotiate with creditors
Creditors might seem vicious and uncaring, but they really are not. Most creditors are pretty understanding and are willing to waver wherever they can. In fact, as long as you are making payments on time it is highly likely that they will be willing to work with you on any terms. Never be afraid to open a dialogue with your creditor and ask for a more attractive repayment plan or establish a more affordable repayment plan that better fits into your budget. This will benefit both them and you. It will ensure that you actually establish a payment that you can afford and it will ensure them that their monthly, weekly, or yearly checks are still going to keep going in when they should.
Cut the dead weight
Do you have employees that aren’t pulling their weight? Maybe you have had them on for years and know their families. Maybe you take vacations with them every year. Unfortunately, if these individuals aren’t pulling their weight they are only going to drag down your business and eventually force it into bankruptcy. Bankruptcy is something that you want to avoid at all costs and cutting the dead weight might just be the solution that you need. It will not be easy and it will certainly be emotional, but if getting rid of these individuals could potentially save your business it is something that you are going to have to bite the bullet and do.