Saturday, December 22, 2012

Working Smarter: How to Avoid Business Bankruptcy

By guest writer Biljana Dimovska

Bankruptcy is when you are unable to pay your debts. No one wants to become bankrupt. If your business survived even the global financial recession then don’t let your business become bankrupt next recession. Some  bankruptcy regulations and steps to avoid business bankruptcy are discussed in brief in this article to help you save your business in such conditions.

Guidelines to avoid business bankruptcy

Evaluate the financial condition of your business: If you are feeling financial pressure in running your business smoothly then you should first of all evaluate it considering all the options that can help you in pulling it out of the crisis. If you are not ready to invest more money from your pocket then you will have to rearrange the cash flow of your business as you may not get funding from any of the traditional resources of financial loans.

Exploit your capabilities to manage cash flow: You will have to negotiate with your creditors to rearrange the payment terms to ease the cash flow for your business. You can also manage cash flow by increasing collection of the receivables of your business. Moreover, you will have to reduce the operating expenses of your business to manage the cash flow.

Evaluate the lists of assets and customers: You might have created some tangible and intangible assets for your business, if you have been operating long enough. You should evaluate everything that has value for your competitors before adopting a new system and operating procedure for your business to survive even in this critical condition. You should also consider whether your customer lists are ready for transfer to another similar business.

Categorize competitors who may be interested in your business: You should find out if a company is interested in taking over your business and make money from it instead of closing your business. Keep your estimates ready before contacting any prospective buyer of your business to negotiate accordingly. You should not disclose your idea of selling your business to more than two probable buyers until you get a suitable bid for it otherwise you may lose the customers and employees of your business beforehand.

Keep all the facts and figures ready before starting the deal: As you plan to sell off your business you should keep all the facts and figures ready. This information will allow you to convince them about the benefits they may get after acquiring your business. If the buyers of your business show their interest in your deal then you should not delay in wrapping up the deal as things may go out of your reach as the deal is delayed.

Thus, you can avoid business bankruptcy as becoming bankrupt has long term outcomes that aren’t good for any individual or business.

business communication; proofreading, copyediting

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