Archive for Bankruptcy Prevention

If you are a small business owner facing a declining business,  there are many ways to turn it around and change the circumstances so they are in favor of your business.  The book “Corporate Recovery: Managing Companies in Distress”, but authors Slatter & Lovett, gives valuable advice on turning companies around.  Some of the steps they recommend for your small business are as follows:

1.  Get control of cash flow and short term financing with a plan for Crisis Stabilization.  Understand all of the resources you have at hand, including your small business loan and funding resources.

2.  Perform a thorough assessment and make sure your leadership team is the one that is going to get the job done for your small business.

3.  Keep the lines of communication open with stakeholders, and make sure you have their support.

4.  Focus existing resources – be willing to sell peripheral assets to generate cash.

5.  Make any structural changes needed, including laying off unneeded employees.

6.  Understand the reasons your small business got into trouble in the first place, and focus on changing those processes.  Figure out how to be efficient and lean.

7.  Restructure the business financially, if needed.  Only make commitments that you can meet.  Raise working capital, or find other sources of funding.

Cash management is also critical to turning around a failing business.  Don’t spend cash unless it leads to generating revenue directly.  Prioritize payments.  Develop plans so that suppliers who aren’t getting paid understand when they will receive payment.  Communicate constantly with your creditors.  Implement a cash-only basis with your customers.  Provide status and updates for everyone involved in your business process.

The stress on communication is critical; creditors know that if your small business ends up in bankruptcy, they will likely receive very little return on their invoice, so many will be willing to work with you AS LONG AS you keep the lines of communication open.

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Too Common of a Word in Today’s Business: Bankruptcy

Each day, media headlines are reporting on another business heading towards bankruptcy.  So what can you do to make sure this does not happen to you?  How do you make certain blood, sweat and tears were not wasted and replaced with cash flow problems?  Here are a few tips to help your business stay out of bankruptcy court.

Ask for Feedback

Customers are a valuable source at your disposal.  So why not ask customers to provide feedback about your company, product and/or services.  Ask them about the positive and negatives of your small business.  Enquire about how you match up to others.  Find out ample, honest information from clients, and make adjustments accordingly.  It will help you create an effective marketing strategy for your business and discover where your weaknesses are and how to improve these issues.  As a result, these actions will prevent your business from considering bankruptcy as an option.

Consider Buying Second-Hand Office Furniture and Supplies

You want to impress clients with your office atmosphere, but you do not need to buy brand new office furniture.  Look for used office furniture in good shape.  Make sure there is no noticeable damage, and consider purchasing if it saves you money.  You do not want your business in a bind due to expansion costs of having to hire and buy more space/furniture to accommodate the increased employee numbers.  Thus, cut costs on furniture.  Be smart about your purchases.  Saving where you can in this recession shows you are being ahead of the business game.

If your small business is still tight on money, then check out a small business loan and find a lender that is right for you.

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