Bankruptcy is the last thing any businessperson would think of – they don’t even like to hear the word “bankruptcy”!
But it does happen, and if you’re a businessman (or woman), that can happen to you, too. We hope not, but if you think you’re on a verge to bankruptcy, or worse, you’re in a swim-or-sink with bankruptcy, read these tips to know what you should do to save yourself and your business from bankruptcy.
We should clarify these tips doesn’t guarantee of saving your business; it’s an economic matter after all. But at least, you’re giving the best chance of saving it.
Read the tips below to know what you should do if you’re on a verge or in the middle of a bankruptcy:
- Cut costs – Your first best bet is cutting your costs – both in business and personally. Since you are in the middle of a financial crisis, it’s best you cut costs on every corner and focus on spending only on the most important things; if it’s in business, that means spending on things that will highly likely give you revenue.
2. Increase in revenue – As already mentioned above, do your best to increase your business’ revenue. Sometimes, that simply means cutting your business expenses. So, look for any unnecessary expenses and cut them all out – even if it’s only a cent. Cents, after, can compound to big money if left unchecked. And focus all your spending on income-generating matters: focus on marketing, advertising, sales and everything you have which you think will add more revenue on your part.
3. Get customers to pay sooner – If you have customers with outstanding debt, ask them to pay back the money. Keep in mind you’ll probably not get all customers to pay you back, but most likely, some will – and that will be very helpful on your part.
4. Prioritize paying off business debt – Never run away from your obligations; it only makes matters worse. If you can, pay off your debts as soon and as fast as possible. Many business people make the mistake of not paying off their debts, hence the debt doesn’t go away. Pay them off, even if you begin small.
5. Attempt to negotiate better terms – You’re certainly not in a good position, but try to strike deals, especially with those you owe with, that will benefit both of you – a win-win situation. If you can strike deals that will add revenue, do so – and be sure to pay off your debts from a percentage of it.
6. Get help from friends and family— It will not hurt if you ask your family and friends or help. A few dollars will always go a long way into rescuing your business and personal finances from bankruptcy. And if you happen to collect a few dollars from many people, guess what, that may turn out big!
7. Consolidate business debts– If your debts are piled on you and your business – and especially if your debtors are calling you on the night – you can do some debt consolidation, where you take out a new loan so you can pay the old ones.
Basically, handling bankruptcy boils down to one thing: a discipline to pay all loans and earn as much money as possible. This can be hard to do, especially if you live a costly lifestyle or your business operated on huge costs. But cutting costs, adding more income and paying off debts are necessary to swim out of bankruptcy.