Your business may be running smoothly at the moment. You may have a steady stream of clients and cash flow and business may be expanding. In fact, you may feel financially comfortable enough to splurge on luxuries once in a while.
However, things can go wrong at any moment that can affect your business. And when they do, they can go from bad to worse and you may find yourself heavy in debt.
As a result, you may not have a choice in the long run but to file for bankruptcy.
As a business owner, filing for bankruptcy is the last thing you want to do. That’s why it greatly helps if you have a backup plan in mind and know the right measures to prevent this from happening. Below are a few helpful hints so that you can avoid the pitfalls of bankruptcy.
Limit Your Spending
Avoid spending on things that are not necessary. Trips to the spa, dining out, and club memberships are considered luxuries that you can do without. Focus only on spending your hard-earned profits on sustaining your business.
Look for possible assets that you can liquidate to pay up your debts. These may be assets you owned that you no longer use or deemed as necessary such as a boat, a vacation house, etc. You can also use the money collected from liquidating your assets to boost your business’ cash flow.
Budget Your Money
Organize your business’ daily operational expenses for easy tracking of every dollar spent. Include incidental expenses such as repairs and parking fees. Having a detailed budget would help you see how much you’re spending and the amount left for you to set aside.
Use a Business Solution Tool
There are various finance apps available out there that can help you manage your business finances. Apps like Fundbox lets you receive advance payments of clients’ billables so you have instant cash if you happen to be cash-strapped.