6 Tips to Avoid Small Business Bankruptcy

Nowadays, bankruptcy can be a tough word when you hear it, but it’s not. It’s something natural part of a lifecycle, like birth and death. It is often associated with something bad and could make you feel like there is no escaping. To be honest, bankruptcy is something to take into consideration when you have a small business because according to the recently studies from SBA (Small Business Association), 8 out of 10 business can fail during their first 18 months of activity. As well, when you have a small business you have to keep in mind that you cannot cover all the parts of a business yourself.  You have to have the courage to contact other firms that can give you important advice about how to avoid a bankruptcy. For example, if you have the feeling that something could go wrong, you can get in touch with a specialized firm like Carlton Legal Services and they can lead you into the right direction.

Let’s take a look at some important aspects to be aware of when you have a small business or even when you decide to open a new one. Pay attention. There can be lots of advice on the Internet on how to do it right. In this article, we will just mention the major aspects that statistics show can provoke the most failures.

1. Don’t open a business in a field where you don’t have experience or knowledge. Even if it can look like a gold mine, at least find an associate who can help you. There are plenty of firms opened by more than one person where the fields of competence are segregated between members.
2. Pay attention to your investment funds. Very often your initial forecast will not match with the go live period. Unexpected expenses will come, and it’s good for you to have a dedicated fund for that. As well, having that fund you will be free of calling another debt on your accounting.
3. Even if it’s often neglected, keep your accounting daily and clean – you will have a clear idea of your business income and expenses which will allow you to make better business decisions.
4. Sell your product as if it is the best in the world. Successful companies invest a big part of their budget in marketing to make themselves more visible. You should do the same. For example, if you are a retailer, locate your business in a busy location that is close to transportation. That way, you can draw in foot traffic.
5. Pay attention to your quality – word of mouth is essential in the beginning of a firm. If someone will buy something from you, and he is satisfied, then he will definitely tell others. This can get you new customers. On the other hand, bad publicity can follow your company as well.
6. Don’t follow the latest fads in an attempt to get rich quickly. This is a typical mistake made by new businesses. If you try and get to market too fast, you may end up sacrificing product and service quality.

If you complete the above steps and still find yourself facing bankruptcy, all is not lost. Try and keep an optimistic vision over your business. Try and figure out what went wrong so that you won’t have to face bankruptcy again. Could you have promoted more?  Were your prices too low or too high? Could you have negotiated better rates with your creditors? It is also okay to enlist the help of others, like Carlton Legal Services, for advice. With their experience in dealing with small business bankruptcy cases, they will surely know what to do to get you back in business.