No business is truly safe from the threat of bankruptcy. If big companies can fall into a financial limbo, so can a small business. Case in point: In the 2000s, airline companies were filing for bankruptcy. This eventually turned into a good thing, however, as the industry gave way for restructuring and a better landscape.
There are several futures for your company if you file for bankruptcy, but not all of them are good. This is why you need to check the following:
You may have a profitable business, but is it liquid? Are your profits already in your bank account or are you waiting for clients to pay their share? There is a difference between having profit on paper and having usable funds. Your bankruptcy lawyer in Salt Lake City will suggest that you file for bankruptcy if your debts are overwhelmingly high and your liquid assets are not able to compensate.
Number of Employees
The more employees you have, the more people will be there to lend a hand and complete tasks. Ideally, that means you get more work done. But if there are too many people, some of them may be idle, especially if the production demands are not that big. It may be a disheartening thought, but downsizing may be the answer to your financial problems and to curve the looming threat of bankruptcy.
If you’re not earning the profit that you have projected, there might be something wrong. The business structure could be preventing the timely distribution of items, or someone in a managerial position may not be doing their job correctly, which results in production blockage. There are several reasons, so an audit might be needed. Restructuring the company is another suggestion, preferably with the help of a consultant.
You want your business to stay afloat, so keep the threat bankruptcy of away. Be mindful of business processes and workflow, and how they impact the company’s productivity.