Depending on the type of financial situation that you get yourself in and the business type which you are managing, it is possible to file Chapter 13, chapter 11, or Chapter 7 bankruptcy. While this might help you to get relief from your debt challenges short-term, it might end up having long-lasting implications.
According to Roemerman Law, apart from having an impact on your credit score, it might end up crippling the ratings of your business, making it hard for getting future funding from various lenders. It will tend to place a strain on your reputation and can affect negatively the retention of customers.
The following are some of the steps you can embrace in helping you to avoid such a move:
Eliminate non-essential expenses
You can start by having to go through your budget with a fine-toothed comb. If you are paying any particular expenses at the moment which you don’t require currently that include:
- Lunches for employees
- Gym memberships for employees
- Unnecessary travel expenses
- Phone plans which are highly-priced
- Offsite team events
- Company-paid transport or cars
- Improvement of modern offices;
You can consider getting a way of fixing such costs and replacing them with low-priced alternatives. An example is where you decide to calculate what you are likely going to save if you were to swap the phone plan for the employees with a VOIP – voice over the internet protocol solution. While there will be a need for certain financial restricting which will make a great difference, the crisis in business consulting is necessary so that you get to know the root cause.
Selling the business assets
While it might be hard to get rid of the mission-critical server equipment or the systems of your computer, it might be that you have some assets which are lying around idle in your office which you can be able to liquidate. It might go beyond the physical equipment.
Find out if you have parking that is too large for the employees that you have and offer to let it out to the other businesses around your part of the space. The main thing is to ensure that you analyze everything carefully that you own in the business and ensure that it is getting utilized to its full potential. If that is not the case, you should sell or downsize it to get extra revenue.