Archive for business bankruptcy

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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No matter whether a business is a large corporation or a small business, bankruptcy is sometimes the only way to clear the dust and start building fresh.   However, what does that mean when your small business files for bankruptcy?  Are you still able to operate or are you forced to close your doors?  With headlines featuring Circuit City going out of business, small businesses question what happens when bankruptcy is the route to go. Here are basic facts about bankruptcy in regards to your business.

What Occurs to Your Small Business Credit Report

Before proceeding forth, you need to be aware that if your small business files bankruptcy it shall appear on your business credit report.  It will prevent your company from finding funds easily once the process starts.  You may not qualify for a small business loan and will need to look for alternative financing such as an unsecured business loan or a business cash advance.

The Differences between Chapter 7 and Chapter 11

There are distinctions between filling for a Chapter 7 or a Chapter 11 bankruptcy.  Thus, you need to think about which one is more suited for your situation.  With Chapter 7, a court-appointed trustee will begin sorting through your assets.  He/she will place your non-exempt assets for sale in order to pay back your creditors.  The problem with this option is it places your business at risk causing it to be difficult to stay in operations.  With Chapter 11 bankruptcy, you are able to continue operating daily business transactions.  However, under Chapter 11 you are legally forbidden to engage in any expansion or growth efforts.  It is part of the bankruptcy terms.

Filing bankruptcy should be the last resort for your small business.  Try generating further financing through business loans and business cash advance before turning to such drastic measures as bankruptcy and ruining your business credit permanently.

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