As a business, staying out of the deep waters of financial trouble can be tough. Bankruptcy can happen to any business, no matter the size, at the drop of a hat. Whether you’re a new startup or an established empire looking to make smart financial decisions, you’re in luck. Here are 6 expert ways to help you manage your payments and avoid bankruptcy like a pro.
Manage Your Existing Debt
In a perfect world, you’d have no existing dept and would be able to start preventing future debt from happening. Since the world is not perfect, you must first devise ways to sort out your existing debt before tackling potential future debt.
Start by considering your options, like a consumer proposal or consolidating or settling your debts. Create a plan to keep your existing debts in order, so they don’t snowball into bankruptcy.
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Make a Budget and Cut Spending
Once you’ve sorted out your existing debt, it’s time to sort out your future finances by creating a budget. Setting a budget for your business is no easy feat, and you need to factor in a lot of things to get it right.
Start by looking at your monthly expenses, where you’re losing money, and where you need to save up. Look for where you can afford to cut back on costs and redirect your money where you need it the most.
Opt for The Bare-Bones Budget
Creating a simple financial budget and cutting your spending is not enough to avoid bankruptcy in 2023. Sometimes, you need to go a step further and cut your overhead costs to the bare bones to avoid bankruptcy.
Limit any and all luxuries until the coast is clear and the threat of bankruptcy is gone. Avoid renovations or eating out, and brew your coffee; desperate times call for desperate measures.
Maximize Your Income
When avoiding bankruptcy, cutting down your overhead costs is just one side of the financial coin. The other side involves maximizing your profits so that you can afford to stay out of trouble.
If you have a job, raise your prices or work longer hours. If you don’t have a job or enough time, get a second or third job to make ends meet. Look for financial aid or a side hustle and look for ways to boost your income.
Sell What You Can
There are other ways to boost your disposable cash as a business without looking at your profit margin. You have to know when to abandon the ship and sell what you can.
Hold fundraisers, company garage sales, or sell your stock. If times get tough, reach into your personal assets and sell what you can to stay afloat. If it can save your business, it’s worth it and will return to you tenfold.
Talk to a Professional
Last but not least, if you’re stuck in a financial pickle and don’t know what to do next, talk to a professional. Call in reinforcements and talk to a professional accountant or financial coach to help give you guidance.
Talking about money and problems with money can be tough, but there’s no shame in needing a helping hand. Your financial coach or professional can help guide you on the best course of action so you can avoid filing for bankruptcy.
So there you have it. With these 6 points in mind, you’re ready to avoid bankruptcy like a pro. Start by managing your existing debt, drawing up a spending budget, and cutting your costs. Maximize your income, sell what you can, and talk to a financial professional when you need it.
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