6 Financial Moves that Could Bankrupt Your Company
The corporate world can be quite cutthroat which is why you'll want to remain eternally vigilant to keep your company afloat. Avoiding bankruptcy should be at the top of your priority list as a business owner. To help you achieve this goal, here are six of the fastest ways to head down that road. Once you are aware of these errors, you can then handle your finances and your company in a much better manner.
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1. Holding onto your assets in times of trouble. While this one might seem counter intuitive, it actually makes sense. Keeping money in any investments is only a smart move if you don't critically need it for other essentials. If your business is going under, don't hold onto any unused assets. Instead, boost your cash flow by selling your investments and getting rid of any excess debt that you may have. Once your finances have stabilized, you'll still have your business and can then focus on regaining your investments.
2. Failing to negotiate with your creditors. Once you've taken out a loan, never just assume that the conditions will remain the same. Regardless of the type of debts you have, it is always possible to negotiate with the lender. This is especially useful if you've built up excessive interest that you can't seem to pay off. Ask your creditor if they can freeze the interest build-up so you have a chance to pay everything off in full. After all, they'd prefer you paid back the loan rather than defaulting on it.
3. Relying on a single source of income. If your business isn't bringing in enough money, don't struggle forward trying to boost your earnings in tough times. A more efficient method is to look for part-time or casual work on the side so you have enough to support your primary company aims. Just as finding an expert in debt factoring can help improve your cash flow, so too can getting a second job ease the finances within your business. Although it may be hard holding two jobs, at least you'll avoid bankruptcy.
4. Forgetting to create an accurate budget. Keeping a detailed record of your earnings and expenses is crucial to any company's success. Without it, you'll be at risk of spending too much, which can then lead to financial calamity. Instead, write down an accurate monthly budget, jotting down everything important that you pay for. In this way, you can see what you need to spend money on and how much you have available each month.
5. Handling multiple debt responsibilities. If you find yourself struggling with a number of loans at the same time, you should consider debt consolidation. This is a service that most people ignore, a critical mistake that can lead to bankruptcy. To avoid this, think about refinancing your loans so you can improve the situation with both monthly repayments and interest. Talk to a reputable financial firm and find out how they can help you stabilize your monetary responsibilities in the future.
6. Overlooking expert legal assistance. Even though the world of finance is complicated, most people choose to tackle this area by themselves. This is dangerous as the wrong decision can lead to risky corporate situations. Instead, it is better to hire a lawyer to take care of your monetary stability for you. They will know how to proceed so you can take care of everything in the safest manner. The fees they charge will pay off in the end as you continue to run your company and improve it's cash flow for a long time to come.
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Posted in Publishing and Printing Post Date 05/29/2015