Businessman Basics: Tips to Avoid Bankruptcy

One of the top search engine searches related to bankruptcy is regarding "entrepreneurship", especially new businesses. We have heard the statistics, most new businesses fail in the first 5 years. We have also heard that famous businessmen like Donald Trump have filed bankruptcy and like a phoenix, rose from the ashes to the top. Let's face it, most of us would like to experience success without dealing with extreme financial stress.... We have put together some tips for those of you looking to start a business or who may currently be entrepreneurs to keep your books "above water" and out of bankruptcy.

Failure to plan is a sure plan to fail.

This first tip may seam simple, but you would be surprised how many businesses and individuals alike do not have a financial plan or idea of the current state of their personal and/or business finances. Create a budget. A budget for you individually, a budget for your family, a budget for your business. Know what you have to spend, what you plan to spend and where you can cut if times get tough. Take advantage of free resources available online such as Mind Your Finances Money Management and Financial Tools.


I have a goal in mind.

Don't go in blind. Do your research and set business goals from the beginning to ensure that you maintain focus and have a realistic picture of the capital needed to start, grow and maintain the business. Define your goals in your marketing plan, business plan and five year forecast. This well help you to quickly say "no" to advertising/business opportunities that may sound good, but cost money and ultimately do not help you to meet your goals.

Time is money.

Take the time to do your research on money and finance with regards to establishing the type of business you are interested in. Constantly keep yourself updated with trends surrounding your industry, banking opportunities, rates, etc...

Avoid excessive usage of credit cards 

You know what they say, "cash is king" maybe not literally, but if you don't have the money - it is best to not charge it. Avoid excessive usage of credit cards and if you do use credit cards, make sure you will be able to pay them off in a timely fashion.

Receipt Please...

Keep track of ALL business transactions, always get a receipt. This will allow you to track your expenses, easily gather your write-offs to ensure the maximum return and also to know what expenditures you need to look at if you need to make "cuts" or if you have extra revenue.

If your business is in debt and you are not sure if bankruptcy is the right option for you, contact Foster Law Offices for a free, personalized consultation.

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