On The Verge Of Bankruptcy? 5 Tips To Survive

If your company is struggling, face the facts about the health of your business, and then come up with a strategy.
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

If you are a small business owner that is still in business after the most recent economic downturn -- that doesn't mean you are out of the woods. If your company is struggling, face the facts about the health of your business, and then come up with a strategy.

I owned a company that inevitably failed and I remember the financial toll and the emotional beating that goes along with trying to save a company on its last legs. But, here are the 5 strategic moves to make the best out of a negative situation which worked for me and I know can work for you:

Face the Truth

Is your company running a negative cash flow on a regular basis? If the answer is yes, it's time to consider your options. Are you prepared to put more personal money into your business? If the answer is no, you probably will not be able to arrange a loan from any conventional sources and unless you can quickly turn around your cash flow you might run out of gas.

Maximize your Cash Management

Can you stretch your payables further by negotiating longer payment terms? Can you speed up collection of your receivables? Can you reduce your operating expenses and furlough or convert employees to part-time workers?

Look Objectively at Hard and Soft Assets, and Customer Lists

If you've been in business a few years, it is likely you have transferable assets with real value (actual and intangible) to a competitor. Examine your unique systems, formulas, and operating procedures that can add value to another company. Take a thorough inventory of everything the company possesses and examine your customer list one customer at a time, keeping in mind how each customer would fit in with another similar company and whether you could convince them to make that transition.

Identify Competitors That Might Be Interested in Your Company

The most positive solution to closing a business is to find another company that will benefit from what you have and will pay money (or assume debt) for it. Select no more than two potential targets (your best picks) because if the word gets out that you are selling your company you might lose customers and employees before you can work out a suitable transfer.

Remember this is a "beauty contest," so plan every detail before you approach a competitor and keep it 100 percent positive. Before you "pitch" a competitor know what you want out of the deal and keep your activities under the radar screen for maximum benefit

Know What you are Selling and Have Facts and Figures Ready

Make sure you exchange confidentiality agreements before you start. Give your best sales pitch on how your competitor will benefit by adding your company and its customers

If there is real interest walk away with an agreed upon outline, follow-up quickly and try to wrap up the transfer in 30 days max. Make the deal and take a long, hard, sigh of relief, as I did, that you can walk away with something to show for all your effort and then move on!

Popular in the Community

Close

What's Hot