Business has always been a way of life for many. Whether it is a student trying to complete their bachelors or an adult working in the industry, a business can be a viable option. If you have an idea that you think can flourish well if its watered enough, then you should not hesitate to pursue it. Why wouldn’t business boom? Why wouldn’t profits soar?
However, there are many times that, due to a lack of sustainability, the business can come to the brink of collapse. Often, a small business may have to declare bankruptcy because let’s face it, they ran out of the runway that would have allowed them to take-off. Despite this, there are things that Small Businesses can do to avoid bankruptcy.
1. Cut those costs
Businesses often find themselves in trouble due to extra expenditure. There can often be unnecessary costs invested in the business. These may have no need to be present but they are there either as a luxury or something extra. If you find that your business may be going under, explore the areas of cost. Do you have a model that allows for perfect flow of cash, in and out? Cutting down on certain costs and working on a budget can allow your business the breathing room it requires.
Reducing expenses is part of this point. Where three vehicles are being used to cover a location, see if two vehicles can make rounds. Another way to cut cost is to make the most out of the space you have. Power down non-essential lights, appliances when not in use. After all, the electricity bill itself can be a hefty price to pay for a running business. This is quite a significant way for businesses to avoid bankruptcy.
2. Prioritize Debt Payments:
If your business has debt payments due which are also causing it to go under, check how soon they have to be paid. Since not all your bills will have the same urgency, it is better to prioritize. Set the most urgent payments at the top and think of ways to pay those off. Check if there can be a payment plan for these debts that have accumulated.
Remember, staying afloat is a huge part of running a business so make sure the debt is not heavy enough to sink it. Many organizations may offer reasonable payment plans and have policies in place in case of such a situation.
3. Selling Unnecessary Assets:
There are often assets present within the business that are not of use. They may have reached the end of their application and they may just be sitting gathering dust. If your business comprises of machinery or equipment, think of ways it can be liquidated.
Liquidation applies to machines, furniture and other similar resources alike. Huge round end table not of use? Sell it off. You need every source of inflow you can get.
4. Increasing Revenue:
Now, this option is one that might need more time to take footing. Increasing revenue is something that can keep a business afloat if it has some runway left. If there can be some alternate means of revenue generation present, it is better to accommodate those.
Increasing leads to attracting more customers, raising rates to a certain level can all be ways to generate extra revenue. There are ways to cross-sell and up-sell as well so employing those can help a small business. This is just one of the things small businesses can do to avoid bankruptcy.
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