In these uncertain economic times, you never know when your business might encounter rough waters. Everything from suffering lackluster sales to suddenly finding yourself buried under a mountain of debt, no business owner is immune to these types of problems.
If your business is struggling to stay afloat but you would rather not file for bankruptcy, there are some things you can do to help stay in business:
- Stay on top of your taxes. The last thing you want is to find yourself owing a lot of back taxes. Before you know it, the penalties will start adding up, and you will be in worse shape than before. Keep current on all of your tax payments, even if it means doing a little belt-tightening in other areas.
- Keep an eye on cash flow. Even in tough financial times, you should have some kind of advance warning if you are prudent about keeping an eye on cash flow. Sometimes putting a freeze on spending can help get things under control.
- Search for the best short-term loan options. Shop around for the best rate and repayment plan that will help your business ride out the financial storm. Do not rush out and sign for the first loan that is offered to you.
- Look for assets you can sell to raise quick cash. When is the last time you took a really thorough inventory of everything your business owns? Chances are that you will find some items you can sell to help alleviate your short-term cash flow problems.
- Trim expenses down to the bare bone. If you have many employees on your payroll, enlist their help. Be honest with them — let them know you might be able to save their jobs if they can help you trim expenses down to the bare minimum.
- Cut salaries temporarily by 5 to 10 percent. This is obviously a very unpopular option, but it can sometimes see a floundering company through a rough patch. You can always ask for volunteers before you make it mandatory.
- Stop paying yourself. As the business owner, you are probably the last one to be paid anyway. But in case you are still collecting a paycheck, suspend yours until the business starts to turn around.
- Refinance any outstanding real estate loans. And cash out some equity; it may be the difference between staying in business and closing the doors.
- Find an angel investor. They are out there; you just have to search for the right one who can invest additional cash into your business to help you get back on your feet.
- Borrow money from a wealthy relative. If you are fortunate enough to have a wealthy relative or two in the family, ask them about an interest-free loan to jump-start your business. (The worst they can do is say no.)