Bella Flanagan, Negosentro | The mere idea of filing bankruptcy is a frightening one, and it brings shivers down your spine and makes you shudder in fear. That b-word, bankruptcy, is a term all business owners and entrepreneurs do not prefer discussing as they hope they will never experience it.
Although filing a bankruptcy can be the ultimate solution to a business’ debt woes–a contiguous relief from harassment calls from creditors, and relieves you from writing multiple checks to lenders–it still jeopardizes your credit score and reputation to an ultimate extent. Filing a bankruptcy is a public move, thus making you live through the embarrassment a bankruptcy.
Bankruptcy will leave the entrepreneur deep wounds both financially and mentally. The data gathered by United States Courts shows that bankruptcies in the US were rampant in 2013 and 2014. The underlying causes for filing bankruptcy and resorting to the debt relief option varied from one business to the other. It is never too late for a modern entrepreneur to take measures in making sure he/she avoids bankruptcy.
Quick Guide To Help Avoid Bankruptcy
Starting out young in the business world is remarkable as you can experience the glories the world has to offer earlier. However, a young entrepreneur like you should also take care of your finances to avoid becoming disastrous in your career. Here are quick, and efficient financial tips to avoid bankruptcy.
- Manage Your Own Personal Finances Responsibly
Managing one’s finances is not only an agenda for adults. Taking it seriously will make you notice how your finances play an essential role in your life. Also, you will realize how making do with your finances influence the forthcoming ventures in your business and life.
- Establish Realistic Financial Goals
Operating a business also means setting realistic goals to track the progress of your company. Also, it gives you motivation and enthusiasm to take further action. Divide your financial goals into long term goals and short term goals.
- Short term goals: Include in this section your monthly savings, and your anticipated expenses.
- Long term goals: This includes projection of your personal and your business’ net worth.
- Liquidate Your Immediate Assets
Do you have a myriad of items, equipment, or any unnecessary things lying around and no longer need? If your business no longer needs your previously purchased office equipment and electronic tools, then get rid of them!
Selling unwanted equipment can come in handy in times of slow periods. If you cannot sell these, try trading it with a colleague or friend for an equipment or tool which you business may currently need.
- Study Further On Money And Finance
Take some time to research on how money works for your business. Read applicable books, e-books and resource websites to answer your questions. This way, you will acquire basic to comprehensive ideas on how to operate and cultivate the most out of the money which you worked hard for and earned. Eventually, with all the knowledge you gain in reading, you will achieve the financial success you aim for.
- Keep On Saving Money
Save around 12% to 15% of what you earn monthly. Even if you are unable to save that kind of amount, you can save a little until it adds up in the long run.
Keep in mind the saying, “prepare an umbrella before it rains.” In this context, it reminds you how crucial it is to save in order to prepare yourself for unpredicted financial issues.
- Invest In Real Estate
Also a great investment is real estate. Owning commercial or rental property provides you with a steadfast stream of income. In addition, most of that income may be safeguarded from taxes, which entails you being able to channel most of it back to your business.
You will be surprised how a few good decisions and healthy financial habits can save your business from bankruptcy. Indeed, it is a huge help to save dollars here and there to building your career as a modern entrepreneur. Being involved in business means committing to wise financial choices such as managing finances responsibly, and establishing financial goals.
Bankruptcy can be a dreadful experience any business owner would want to avoid. To save yourself from the negative consequences brought about by bankruptcy to your business, you can click here for more legal options.
Bella Flanagan has dedicated much of her life to law, and her pieces as a writer are imbued with her wisdom obtained from over 20 years of experience in business. Bella enjoys hanging out with her grandchildren when she has the free time.