If you’re a small business owner, money is one thing that’s probably always on your mind. And if you’re a small business owner struggling to avoid bankruptcy, money is probably the only thing on your mind. While money may not be the most important thing to your happiness, it is often the most important thing when it comes to your misery. Unfortunately, millions of people file bankruptcy every year, and that number includes thousands of small business owners. In fact, 3% of bankruptcies that were filed in 2014 were filed by businesses. So to help you stay smart about your money and avoid bankruptcy, let’s discuss a few things small business owners should do.
For starters, you should continuously reevaluate your business plan. It’s important to remember that your business plan is not set in stone. Because having a business plan is a crucial part of a well-managed business, it should be adjusted to fit the company as it is now rather than when it was first started. In order to have proper financial predictions and planning, your business plan should accurately reflect how well the company is doing.
Additionally, it’s important to address problems quickly and efficiently. While it may be tempting to ignore problems in hopes that they’ll just go away, doing this is only going to create further problems. So if your company is facing an issue, particularly a financial one, you need to be open and honest and begin to put plans in place to get the situation back under control.
You should also consider keeping your business software up to date. While this may seem like a rather simple task, it’s an important one. If your company faces a cyber attack or any sort of ill intent to take down your business, you need to be prepared to bounce back. Unfortunately, 60% of small businesses end up going out of business less than six months after experiencing a cyber attack. This can be attributed to a variety of factors, but it’s important to keep your information secure and have resources available to help your company in the event of an emergency.
Along with keeping software up to do, it can be beneficial to utilize software applications that can help automate certain functions within your company. Although no business owner wants to have to reduce their staff, sometimes it’s necessary to remain financially stable. Software applications that manage accounting or inventory can help free up employees to either be laid off or focus on other tasks at hand.
And lastly, you may want to hire a consultant. While hiring someone will evidently cost more money, the pay off will be worth it. If you’re running your business basically by yourself, it can be difficult to create real change in your business structure and financial situation. Hiring a consultant who specializes in businesses that aren’t doing well can bring a fresh perspective and help solve the problems your business is facing.
Managing a business is not an easy task, especially if you’re doing it alone. But hopefully, these tips will allow you to reach out and get the help your company needs before reaching the point of filing for bankruptcy.