It’s a fact that up to three-quarters of new businesses launched every year, and many of them suffer that fate within the first five years of operation. The majority of entrepreneurs declare bankruptcy. However, before you need to contact bridgenewland.co.uk there are some basic steps you can take to help avoid insolvency. Here are some of them:
1. Reduce your overhead expenses
This is definitely one of the best steps to take if your company is having financial problems. It’s important to reduce the costs but not to the point that your company will struggle to operate normally. There are many types of costs that you could consider reducing. For example, advertising/R&D costs can be easily cut. Overtime and staff hours can be reduced, and redundancies can also increase overhead costs of your company. Meanwhile, while you’ll likely have to use long-term investment to grow your business, you should reduce your short-term investment costs. For example, one option would be to lease equipment rather than buy it.
2. Negotiate with creditors
Keep in mind that if you owe more than £750 they can petition a court to order that your company be liquidated. Before you become insolvent it’s important to talk with your creditors, and negotiate a payment plan that you could likely meet. If creditors would lose their money if your company shuttered will likely be willing to negotiate with you in order to get their money. Thus, it’s definitely worth a try.
3. Get professional advice
There are companies such as bridgenewland.co.uk that can help you to take steps in order to avoid insolvency. Receiving quality advice can make bankruptcy much less likely when you get help from the right companies. It increases the chance of turning your company around and getting back in the black. You should seek professional advice in certain situations, such as you’re unable to pay your debts, you cannot cover your payroll, you lack working capital, or you receive a court summons. It’s advisable that you act before any of these events happen. Getting some good advice can certainly help to avoid a lot of worse financial situations such as insolvency and bankruptcy.
4. Boost your cash flow
It’s not enough for you or your company to have enough capital. It’s critical that you have the have the cash on hand to make your payments when they are due. This is a key step to delay the need to file for insolvency with companies. There are a number of steps you can take to boost your company’s cash flow. They include negotiating regular payment s from your customers with long-term contracts, challenging late payments from customers, avoiding overtrading, and reducing unnecessary stock.
The bottom line is that if your company is having financial problems there are steps you can take in order to avoid insolvency and even more importantly, bankruptcy. Some of the options include cutting costs, increasing your cash flow, and getting some wise professional advice. Although taking such steps won’t necessarily ensure that you can avoid insolvency/bankruptcy, they can certainly help to improve those chances.