When you started your own business, you likely were aware of just how good or bad things could get for you. While you might have wanted to hope for the best and put all your effort into having a successful business, sometimes things just happen that make it near impossible for these dreams to become a reality. When this happens, you may have to consider making some big changes or you could end up filing for bankruptcy. To help you navigate these scary waters, here are three things you can do when your business is on the verge of bankruptcy.
Save The Relationship
For businesses that are running out of money, you may start feeling desperate for funds. While this desperation might get you working in fight or flight mode, it’s crucial that you don’t make bad decisions simply in an attempt to bring in more money. For example, Beth Laurence, a contributor to Nolo.com, advises against taking any money from family or friends if your businesses is on the verge of bankruptcy. Unless they can assure you that they can afford to lose it, it’s going to be much better for you to save the relationship with that person than take their money in a last-ditch attempt to keep your business afloat.
Be Honest With Your Employees
If you were able to expand your business and now have employees that you’re responsible for, you may be nervous about breaking the news of your financial situation to them. But despite this, Alex Baydin, a contributor to Fortune.com, shares that it’s very important that you’re transparent with your team about what’s really going on. While some employees might get nervous and start looking for new jobs, you may see some people really step up and help you work toward bringing things back around. If you are able to come back from the verge of bankruptcy, the employees who stuck around could prove to be very valuable indeed.
Take Emotion Out Of Your Decisions
When things start looking bad, you may be tempted to make business decisions based more on your emotions rather than what’s truly going to be best for business. For example, in an attempt to save money, you may cut costs in ways that affect the quality of your products or services. But according to Karsten Strauss, a contributor to Forbes.com, this is one of the worst things you can do. So before you start making rash decision that you hope will help you financially, make sure they won’t end up crippling you in the long run.
If you’re worried about the financial standing of your business, consider using the tips mentioned above to help you figure out your next move and make the best choices for your business.