How to Deal with Business Bankruptcy?
“The assets of a business can be sold to establish a new business so that old personnel can be retained as well as the erstwhile trade agreements be fulfilled in a new way.”
Business bankruptcy is something that is not at all desirable (leaving aside the special case when some companies declare themselves bankrupt for some or the other ulterior motive).Even more, it’s a fact that is seldom accepted easily. This very lack of acceptance makes matters more complex and an avoidable bankruptcy gradually becomes inevitable.
Business bankruptcy has been on an increase. The primary reason for it is the slowdown in the economy. Now, companies are not able to get sizeable credit for their growth. This is especially true of small and average sized companies.
You can always keep an eye on the cash flow of your company to determine it’s financial health. Even if cash flow reports are dismal, all is not lost. You can still save your business without saving its ‘casing’.
Now, you may ask what does this line mean? It simply means that the assets of a business can be sold to establish a new business so that old personnel can be retained as well as the erstwhile trade agreements be fulfilled in a new way.
This theory applies well to those constituents of the company that are in good health. Discarding the worn-out and useless parts will make the company more manageable in addition to being profitable.
In this way, the shareholders will not be devoid of their money and the employees will also take home a sizeable part of their previous salaries.
However, because of this restructuring, they may have to face the situation where bonuses and other perks are minimal or altogether absent. Not only that, other elements of business like the suppliers will also not have to face tough times.
In other words, we can say that you can shuffle your business to arrive at a tight but sound budget. In actual fact, this approach has been put in use by many a company, either in part or as a whole. Much depends upon the foresight and willingness of the directors of the company in question for this approach to be effective.
It’s just like taking a pause and marching forward again for proper growth and survival. So, the notion that bankruptcy is the end of all things is absolutely a wrong one. Bankruptcy can be an instrument for a new beginning.
Author - DeeKay
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