Here's how your small business can avoid bankruptcy

Every business owner knows how tough life can be when trying to keep a company afloat.

There are so many challenges facing small businesses as it is, but one looming threat is that of bankruptcy. In the beginning of a startup, most business owners are too excited to pay too much attention to the finances and the idea of debt and bankruptcy are things that seem like business myths!

The thing is, business life is far from predictable or simple, which means you could be plain sailing one month and sinking in the water the next. You need to make sure that debt and other payments aren't going to catch you off guard.

The Debt to Success System is totally legitimate and can work if you are trying to get your business out of debt for now, but you need to make sure that you have plans in place to help you manage. Below, we’ve got five ways you can avoid bankruptcy in your business.

1. Get rid of fluffy expenses

There are so many different non-essential expenses that a business has, and if you imagine you would cut out the non-essential expenses in your personal budget, you have to do the same with your business.

Paying out for things that you don't need to pay out for is a waste of money! Review your finances and get rid of anything you don't need to pay for. It’ll prevent you from getting back into debt.

2. Sell any assets you don’t need

Business assets such as photocopiers, fax machines and other equipment you don't need do not need to be there in your business. Selling on these assets will not only free up office space, but you’ll free up cash assets, too. You can do better in your business if you ensure that you free up both of these things.

3. Put your creditors first

Prioritising your debt payments is just a smart money management thing to do. Paying off any debts associated with your business should be your first move, and treat them equally where you can. You want to pay off debt, not keep it building up!

4. Keep referring back to the plan

You wrote a business plan when you started your business, and you need to remember that it’s not just a document you write and read once. It’s something that you should be referring back to over and over again to ensure that your business is on the right track. It’s your guide to getting your business to the success you want.

5. Face any issues

If there are money issues in your business, you need to face up to them as soon as possible. You cannot put any debt problems out of sight, out of mind. You have to nip any issues in the bud as soon as they occur so that you can be on top of it!

Every business runs through issues from time to time, but that doesn't mean it has to make your business go bankrupt.

6. Buy used when possible

When your business really needs to invest in itself or purchase new equipment to improve efficiency or meet demand, you should try to make those items used.

Not only will this keep your costs much lower than they would otherwise be but it’s also the most environmentally friendly purchasing decision you can make too. There’s a marketplace for used machinery if that’s what you need

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