How To Prevent Losing Everything In A Business Failure
Businesses fail all the time. This is not something to depress you or prevent motivation to start your own, only a fact that should be considered. According to Bloomberg, on average around 80% of businesses fail in their first eighteen months. That is an incredibly high number, but if you consider how relatively easy it is to register a business, and how competitive certain markets are, it can make a little more sense.
When your business fails, it can be one of the worst times in your life. Not only will you likely owe many people money, but you could lose out on plenty of your own goods in order to rectify a mistake. That’s a real shame, but it might have to be done. But can you prevent losing everything in the event of a business failure, or are you doomed to have every financial matter you care about wiped from the face of the Earth?
Consider the following:
Bankruptcy Lawyers
Bankruptcy can help you default on your loans and thus have them settled completely. However, to do so will mean stripping yourself of almost every line of credit and asset you do not completely own. Often, this doesn’t prevent you from losing assets that are owned but are still used as collateral to settle. Thankfully, competent lawyers can sometimes help you renegotiate certain elements of your bankruptcy, or maybe even to prevent it entirely. While you are a beggar and not a chooser in this situation, a competent team like this can help you achieve many things, from defining your assets, transferring funds and helping you frame your communications, to maybe even stewarding the ability to stop foreclosure of a property. Bankruptcy lawyers are certainly worth the investment because they might save more than they cost.
Asset Sale
With this said, selling any and all assets should be the goal for you to retain a certain element of profitability. This could mean selling manufacturing equipment in auction houses, selling your remaining stock or raw materials to the highest bidder, or conducting a flash sale on your premises to raise as much funding as possible. These efforts can help you make more money from your belongings before they are seized by creditors, and thus make more of a contribution to your original debts.
Preventative Measures
Often, it’s quite clear that a business is failing months or even years before it actually does. This can give you time to prepare. From downsizing to humbling your operation, it might be that you can naturally lessen and humble your output, allowing you to pay creditors in the now and prevent placing everything on the line to keep the business going. This might be a difficult thing to do, and can hurt your pride over that slow march to deconstruct everything you have built. However, when all of your business projections are looking very dim, this can be the most painless way to terminate the project, piece by piece, step by step, and without overarching debts that are impossible to handle.
With these simple efforts, losing everything in a business failure is sure to be less of a pressing reality.