It’s not a secret that almost every successful business has at some point gone through a period of financial struggles. What the public may not be aware of is the fact that a good number of struggling small businesses actually end up going bankrupt. If you’re aware of this and would like to safeguard your business from it, it’s a good idea to do your best to avoid the likelihood of bankruptcy. Read on to see some of the ways in which you can avoid bankruptcy and weather all financial storms that could come your way.
Talk to a Credit Counselor
To begin with, enlist the help of a professional. The best one to talk to first is a credit counselor. They’re typically quite affordable to hire and they can help you evaluate the financial situation of your company with the aim of improving it. They’ll help you by asking important questions such as whether your business has enough cash reserves to cover emergencies and if you pay your debts on time. They may also share with you important information such as that a bankruptcy is going to stay on your credit for seven to 10 years depending on the credit reporting agency. In the end, they’ll help you take an objective look at your businesses’ financial situation so that you can make the right decisions.
Cut Back Where Possible
Next, take time to find out if there are any unnecessary expenses that you’re footing. If it’s possible to cut back, then don’t hesitate to do so because this is money that your business could be saving. You can start by outsourcing some non-essential services such as payroll so that you don’t need to hire a professional and provide them with space on your property to do this task. The same case goes for administrative work.
If you can lower your utility costs, you’ll also be able to make considerable savings over time. You can even use software to serve some purposes. For instance, a Manufacturing Executive System or MES can increase efficiency and productivity. Some companies can even see improvement by 10% to 20% as a result of using MES. When you need to increase your company’s income and work to avoid bankruptcy, trying new technology such as this can be extremely beneficial.
Keep an Eye Open for Government Programs
Don’t forget about government programs, some of which your business could qualify for and therefore enjoy financial solutions for you. The government offers grants, reliefs, and incentives to small businesses as it understands the important role that they play. This is based on the fact that small businesses account for over 90% of all businesses around the world. They employ over half of the world’s workforce as well, so it only makes sense that should you need it, there is assistance available to keep you afloat.
Find Flexible Suppliers
Last but not least, you should consider looking for flexible suppliers. Alternatively, talk to your current suppliers and find out whether they can offer you more flexible terms. This is the best way for you to reduce the hassle and pressure that you’re bound to get as a result of buying on credit and falling behind on your payments. Vendors and suppliers who want to maintain the relationship that you’ve developed with them won’t hesitate to give you incentives so that they can retain you. With less pressure from them, you can come up with a payment plan that suits all parties best.
In these ways, you can lower the likelihood of your small business going bankrupt. When you have the time and presence of mind to manage the finances of your small business best, you can run other details of the business well. This way, you’ll have a great chance of scaling up from a solid foundation and becoming a successful business owner. For more great finances tips, continue to explore our website!
