Few people truly understand how hard it is to be a small business owner. Expenses are high, profit margins are low, and you’re going up against an ever-growing pool of competitors. That’s why bankruptcy is such a common outcome for small business owners that overextend themselves financially. However, by taking a few preventative steps, you can give yourself additional protection against the threat of bankruptcy.
If you’re wondering if bankruptcy is the right step for you, let’s talk about your options and take a long, hard look at your finances. Call Padgett & Robertson at 251-336-3695.
Seek Professional Assistance from the Beginning
In the early days of a business, it’s common to cut costs where you can. However, don’t skimp on the professional assistance you need to make your business successful. For many business owners, that means bringing in a business accountant. You may think you have a solid grasp of your expenses and what you are bringing in, but you really can benefit from the insight of a professional accountant. Even better, they can let you know early if they see the warning signs of an overextended business.
Be Thoughtful About the Debt You Take On
It’s better to plan ahead for debt than to vow never to take on debt. Why? Those in the second group think they are staying debt-free, but then their expenses run over one month. They take a “small loan” out to cover those costs but insist that’s it.
Because they consider it a one-off event, rather than part of their business plan, they often have no plan for managing it or paying it off. If you simply accept that you may need to take out debt for your business and plan accordingly, you can avoid the slow snowball of debt that can build behind your back.
Furthermore, planning ahead for debt ensures that you take on the right kind of debt. If you’re looking for a quick fix when you’re in a pinch, it’s more likely you’ll turn to payday loans or high-interest loans that put you in an even worse financial position. Setting up financing early protects your budget.
Avoid Unnecessary Losses with a Business Attorney
Mishaps and mistakes are an inevitable part of any small or new business. In most cases, these mistakes don’t lead to massive losses—but when they do, they can easily bankrupt a business with minimal savings. When you hire a business attorney, you can avoid mistakes that put you in legal. danger.
For example, violating someone’s copyright or trademark could put you on the hook for tens of thousands of dollars or even more. The same is true with employment issues that could land you in court for wrongful termination. A cautionary word from an attorney before you take action could quite literally save your business.
Act Swiftly if Your Finances Start Getting Out of Control
It is easy to ignore the sinking feeling that comes with your first overdue bill or bounced check. You may tell yourself that it was just a one-off situation or that you’ll make it up next month. All too often, that one missed bill is the sign of more serious problems to come.
Do not ignore these issues or any situation where your instinct is telling you you’re in over your head. If you ignore problems until they are completely unavoidable, it is often too late to fix them. At that point, bankruptcy may be your only option.
If you face the music right away and admit that your finances are starting to get out of control, it may be early enough to turn things around. Again, this is one of the benefits of having an accountant on staff. While it may mean cutting back or being more conservative with your funds, these options still allow you to save your business.
Ready to Learn More About Your Debt Options? Call Padgett & Robertson
Are you considering personal or business bankruptcy? If your debt is more than you can handle, find out if bankruptcy could give you a fresh start. Let’s talk about your needs in greater detail during a free consultation. Call us at 251-336-3695 or now.