Running a small business in today’s economy can be challenging, and many fail during their initial years. Keeping up with increased expenditures pushes businesses to fall into debt and eventually declare bankruptcy. However, bankruptcy isn’t the only way out and it’s avoidable with the right steps.
As a leading business financing solution provider in NYC, we have prepared a guide for small businesses to avoid bankruptcy. Keep reading to find out.
The first step to avoid going bankrupt is reducing expenses. Figure out the money that you spend on a monthly basis and put together a viable budget. Find areas where you can cut costs, such as negotiating a better price from suppliers, reducing electricity bills, etc.
Write a Solid Business Plan
When starting small, many business owners don’t have a written business plan. Having a plan in your head isn’t enough; you need a solid written plan that clearly defines your goals along with tactics and strategies to achieve them. This will allow your team to be on the same page and take actions that achieve those goals.
Not having a written business plan can divert you from the end goal and no one might know what to do to stay on track.
Prioritize Debt Payment
Over-extending your debts can cause many problems for your business and even bankruptcy. While it’s not possible to run a business without taking a few loans, you should always prioritize their repayment. Before you take out a loan, see if your business can afford it and create a viable repayment plan.
Plan for Worst Case Scenario
As a business, you need to plan for the worst-case scenario to avoid disruptions to your business. Not every customer is going to stay, and your sales might decline in the future. You may even experience a setback, such as equipment failure, employee turnover, natural disaster, etc. it’s important to have an emergency fund that you can use during such times to prevent your business from going bankrupt.
When taking major business decisions that involve risks, make sure you thoroughly perform a risk assessment and consider all options.
If you need more advice on debt or are experiencing cash flow problems, we can help you. Whitestone Fund offers short-term business loans and Merchant Cash Advances for Businesses in NYC with flexible repayment schedules and lenient terms. Our business loan agents work by your side to help you determine the right financing solution according to your sales projection, current situation, and needs. Contact us for details.