how can companies avoid having to throw in the towel and giving up on their dreams? Suzzanne Uhland is here with some recommendations on what a business should do to avoid going bankrupt.

1. 4 practical ways
to avoid
bankruptcy
By Suzzanne UhlandImage courtesy of Pixabay at Pexels.com

2. Every business in history has started off the same
way. Something clicked inside the founder’s
head and inside a brilliant idea came to light.
Afterward, that idea started to materialize. First,
with a business plan, a mission, and a vision.
Then gathering enough capital to get the idea
up and running. Once the founders collected
the money they needed to start the company,
the next task would be setting up a location,
purchasing equipment, and hiring employees.
All that was missing was the grand opening and
to work hard to make sure revenue kept growing
and the debts kept going down.

3. That’s the ideal, of course. However, most things
don’t turn out to be ideal. This fact is especially
true when it comes to starting a business and
withstanding enough time to get ahead. As a
matter of fact, less than 50 percent survive the
first four years. In the end, many great ideas end
up in bankruptcy court. So, how can companies
avoid having to throw in the towel and giving up
on their dreams? Suzzanne Uhland is here with
some recommendations on what a business
should do to avoid going bankrupt.

4. 1. Collect and spend funds
wisely when looking to expand.
This seems like a no-brainer, but sometimes the obvious
is what we neglect to pay attention to. It’s normal for a
company to think about expansion once they start
generating some revenue on a consistent basis. Based
on a steady stream of profit, a company might make
the decision to take out a loan thinking they can fulfill
bank payments. Wishful thinking can only get you so
far. In order to avoid a debt that will be impossible to
pay in the future, a company should first set aside some
of the profits so that they can start gather funds that
can go towards their expansion plans in the future. It
might take some time, but like Grandma used to say, “A
penny saved is a penny earned.”

5. 2. Try crowd funding before loan signing
How many startups do you know that made it thanks to
crowdfunding? In today’s digital age, it has become
one of the best ways to raise capital without having to
sign over the company as collateral. People want to
invest in great ideas, they don’t necessarily have to
come from a new company. Small and established
businesses can look to crowdfunding to help raise
enough money to get their new idea off the ground.
There’s really nothing to lose by turning to a community
to help fund your next great idea. Furthermore,
crowdfunding will at least give you some capital to
make sure you don’t have to take a considerable bank
loan that could bleed your company dry.

6. 3. Shake things up a little
Many companies fail because they neglect or
refuse to evolve or try new things. That fact is often
related to those in managerial positions not willing
to try new things and being set in their ways.
Management styles have an expiration date;
sooner or later, there needs to be a change in how
things are run. It’s not the same to run a business or
make decisions when a company is starting than
when a company is established. The challenges
are different. When a business starts to stall and
not generate profit, it might be time to consider
new management or moving people around to
give the business some fresh input and new ideas.

7. 4. Learn from others mistakes
There are many cases of businesses that went
bankrupt. Chances are that there a plenty of
companies that were in your industry. You would
be wise to search for bankruptcy cases of
companies in your market and analyzing what
lessons can be learned from bankrupt businesses.
Going over previous bankruptcy cases will give
you helpful insight into what you definitely need
to avoid in different aspects of your business that
will help you stay afloat and avoid filing for
bankruptcy.

8. No company intends to go bankrupt, but many don’t
heed the signs. Companies must be aware of how
they are spending and raising funds within their
business. Additionally, they should not be stubborn
regarding management styles. If something that
worked in the past stops working, then they should
not fear changing things up and bringing in someone
who can offer a fresh perspective. It could be
through a change at the top or by bringing in a
consultant. Finally, they should avoid repeating
history. Taking the time to analyze what others did
wrong could help a company understand what it
needs to do to avoid going broke and having to give
up on a once promising dream.

9. Bankruptcy can be avoided if companies apply a
little common sense and are open minded enough to
not be set in their ways. Here’s to many years of
success and profit! Cheers!