3 Ways That You May Be Able To Save Your Failing Small Business
Posted on: 19 February 2020
If you're like most small business owners, you put a good deal of time, effort, and attention into getting your business off the ground. However, circumstances beyond your control may result in rough patches along the road to success, and small businesses sometimes end up closing before they have the chance to realize their full potential. The biggest problem faced by new businesses that are still trying to find their footing is the lack of adequate cash flow. This can happen for a number of reasons, but the most common one is unforeseen expenses. The following suggestions are meant to provide inspiration for those struggling to find ways to keep their failing small business afloat.
Don't Avoid Your Creditors
Avoiding creditors simply puts them on the alert that something may be going very wrong with your business, and they may decide to step up their collection efforts as a result. If you show a willingness to work with them, however, they may be amenable to offering you extended terms on what you owe, especially if they suspect that your business may be headed for bankruptcy and that they may wind up with nothing on what you owe them.
Take Inventory of Staff Productivity
Inexperienced business owners often make the mistake of hiring the least expensive employees, but this approach often puts a crucial dent in overall productivity. Taking an honest inventory of the performance of your staff helps identify weak spots and allows you to make adjustments as necessary. You may find that one skilled, experienced employee generates more income for your business than two or three of his or her entry-level counterparts. Another big mistake made by those in your position is to cut staff that are earning higher wages first, but this may have a severe impact on productivity.
Consider Filing for Bankruptcy
Many people think that commercial bankruptcy means that the business will cease to exist, but this isn't necessarily the case. Chapter 7 bankruptcy can also save your business if you're operating as a sole proprietorship, especially if you are operating a service-oriented business without a great deal of salable assets. As an added bonus, Chapter 7 wipes out personal debt as well as business debt, allowing you to get a fresh start on both aspects of your life. However, only a skilled bankruptcy attorney can tell you whether or not Chapter 7 or any other form of bankruptcy is a workable solution for your situation. Contact a commercial bankruptcy attorney to learn more.
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