Tips on How to Avoid Bankruptcy from our Project Campfire community.
Stick with your Strengths
Recognise whether you are skilled and passionate enough to manage your own money. I used to spend hours fighting with accounts, GST reconciliations and invoicing – which was often late as a result. Now I realise it’s better for my profits to focus on making the money and let somebody else help me with getting it in the bank. Be brave enough to invest in a little financial support each month.
Kathryn Jackson, careerbalance
Drop Your Pride
All successful people have required help at one point or another so don’t let your pride stand in the way of getting help when needed. There is a great deal of assistance available if you are open to receiving it and much of it is for free. Remember, getting help is not a sign of failure; it is a sign of wiseness. One more thing, don’t leave it too late.
Lynda Moe, Lynda Moe Transformations
Financial stress is extremely debilitating especially at a time when decision-making is critical. When we are stressed we often don’t think as clearly and are more easily confused. We also tend to react quickly rather than slowing down and thinking things through. Don’t run the risk of making poor decisions. Find your best way(s) of de-stressing and do it daily!
Lynda Moe, Lynda Moe Transformations
Numberese is the language of business
Most business owners only watch their revenue, the most misleading indicator of success. The only two numbers that really matter are a) cashflow and b) net profit. If those two numbers are bad, you’re heading for trouble.
I know too many business owners who have gone bankrupt by increasing their revenue every month and ignoring their cashflow and net profit. Avoid bankruptcy by speaking the very basics of Number-ese.
Chuck Blakeman, The Crankset Group
Be Innovative to Keep Business Coming In
Be innovative. Think of new ideas to bring in business, e.g. run a promotion saying that anyone who refers business to you over a certain period will receive a voucher or free gift.
Be constantly present. Your brand must be seen by prospective clients all the time as this builds trust.
Be aware. Know what is happening in your industry so that you are always one step ahead.
Chanré Williams at Deschan Marketing & Promotions cc
Has your business hit trouble? In 9 out of 10 cases, it will be out of step with the market. So change the market!
Can’t do that? Darn!
The most common cause of poor sales is a failure to adapt in time. The process is difficult, because it involves letting go of something that has worked well in the past. To ensure your company remains on a sound financial footing, I advise commissioning an external strategy check every two years. It’s much easier for an outsider to see when something needs to be changed!
Andreas Sternowski, Business Leaders Management Consulting
Preserve your credit rating by communicating
If you are struggling to make ends meet during one of the most difficult financial times in recent history and want to preserve your credit, you should look to avoid bankruptcy. Communicate with your creditors and let me them know your situation – they may offer you some breathing space. Look to eliminate unnecessary expenses and/or consolidate debts and speak with your chartered accountant or someone specialising in debt management.
Mark Gwilliam, Business Advisory Accounting & Tax Services Limited
Work Multiple Angles
Don’t expect that your business will come from just one source. That’s not enough. You need to be visible in multiple places so customers can find you. Create a website, be active on social networks, start a blog, post articles on article directories, use email marketing, place online ads, consider direct mail, etc. The more angles you can work, the more likely you are to gain customers, grow your business and avoid bankruptcy.
Susan Greene, Freelance Copywriter
Have a Plan
Don’t enter into a business blindly. Study the market. Develop a strategy. Know who your competitors are and figure out a way to be better. Is there room for another player? Is there a unique niche you can fill? Where will you find customers and how will you attract them? Work the numbers and make sure they add up before you take the plunge. Make a plan and work it!
Mark Reff, One Touch Art
Have good documentation
Statistics show that businesses that end up in legal disputes are eight times more likely to fail than businesses that don’t. That’s because legal disputes drain your business of valuable resources that could otherwise be spent making money. Those resources include not just the money you may spend on your lawyers to sort out the mess, but also your time and focus. The key to avoid legal disputes is to make sure that you have good documentation in your business. Any major deals should be covered by a written agreement and if you can’t afford to go to a lawyer to get an agreement drafted for you, then something you put together yourself is often better than nothing at all.
Michael Smyth, Barrister
Look after the pennies …
… and the pounds will look after themselves! It may be an age-old adage but I believe it has some truth to it and it’s how I have approached, structured and grown my business over the past 18 months. Review all opportunities, but invest wisely; don’t allow yourself to be romanced and keep your feet placed firmly on the ground. And finally, plan for tomorrow and not just for today.
Alison Page – Alison Page Marketing
Make Hay while the Sun Shines
The biggest mistake most businesses make is to believe that boom cycles last forever. When things are going well and you are bringing in lots of cash, set some aside. It’s no different than a farmer making hay in summer when there is plenty so there is enough feed to get by in the cold winter. Just as night follows day, boom is always followed by bust, so be prepared.
Liz Koh, Moneymax
Make it easy for clients to pay you
The easier you make it for clients to pay, the faster they will pay. Everyone has the ability to take a credit card payment simply by setting up a Paypal business account and sending a payment request via email. However your clients might want to pay you (credit card, direct transfer, cash, cheque, Paypal) offer that option.
Kelly Exeter, Swish Design
Commit to Abandonment
Before you launch, during your early planning stages, make a firm commitment to your ‘abandon now’ point. Write it down. Decide how dire the situation will have to be for you to walk away and, if you reach that point, walk away. Don’t get into a ‘wait & see if things get better’ mindset nor pour your life saving into the sinking ship. Just move on. Failure paves the way to innovation. Recognize and analyze the mistakes, learn from them, and start again.
Tobey Deys, PlacesFirst Inc. (formerly Lomotron)
Avoid Financial Ruin and a Shattered Ego
Most entrepreneurs like nothing better than the satisfaction of being their own boss. The rewards are both monetary and psychological-profits and esteem. Not surprisingly the cost of failure is also monetary and psychological-financial ruin and a shattered ego.
Developing an accounting plan is fundamental to success. Your system doesn’t need to be complex, it just needs to enable you to keep tract of your business. A good system will
Gabrielle Syben myVA virtual assistant
“Worst Case” Contingency Plan
Be certain to model for the worst case scenario. What’s the worst that can happen?
Howard Forton, ManagerThingy
How Robert slept his way to financial ruin
When Robert went into business with David, he thought he could trust him to make it a success. If things went bad, Robert could rely on the limited liability of the company to protect his personal assets. So when Robert received a claim against him for the company’s debts, he nearly had a heart attack. What started out as a bad investment was quickly turning into a personal nightmare. More …
Michael Smyth writing on Bizbuzz.co.nz
Five Quick Ways to Get Through a Cash Crunch
I recently featured this resource article about surviving a cash crunch in my February newsletter. It came from our online library and has a good mix of preparation plus quick action steps that will help avoid those bailiffs arriving at your door.
Andy Burrows from Icon Business Solutions
Living Your Brand
Everyone is not your buyer. There may be a mass amount of people that purchase your product, but that’s not everyone. Dig deep and research your audience. Find the answers to these questions: What are their spending habits? Values? Concerns? Needs? How does your product/service fit into their life?
By answering these direct questions you will begin to win over your key customer.
Sherry Lynn Simoes, Women of Today
Five Ways to Improve Business Efficiency and Avoid Bankruptcy
A business owner’s financial wealth is determined by his Net Profit. In simple terms, to avoid bankruptcy, you must become fully aware of your Spending and Debt habits. The Grand Law of Wealth as explained in one of the Simpleology Courses is “”Increase Your Incomings and Decrease Your Outgoings”. As simple as it may sound, most of us are challenged in following this Law.
Lalitha Brahma, Elbee Services, LLC
Save on Workspace Costs
Working from home is a cost effective option, saving both traveling time and money over leasing workspace or using serviced offices. If you lack space at home, you can hire a cabin from just $49.50pw tax deductible. Just one phone call to 0800 111 344 or an email to [email protected] could see your new office delivered the following day.
Andrew King, Roommate Cabins
Preserve your credit rating by communicating
If you are struggling to make ends meet during one of the most difficult financial times in recent history and want to preserve your credit you should look to avoid bankruptcy. Communicate with your creditors and let them know your situation – they may offer you some breathing space. Look to eliminate unnecessary expenses and/or consolidate debts and speak with your chartered accountant or someone specialising in debt management.
Mark Gwillian, Business Advisor Accounting & Tax Services Limited