About Business Bankruptcy

Though businesses aren’t immune from the financial struggles that individuals and families face, they also have similar solutions. A business becomes bankrupt when its cash flow isn’t enough to pay all the bills. While businesses have the option of filing for bankruptcy, sometimes business owners wait too long and an involuntary bankruptcy is forced upon them. Creditors can even impose a lien that forces business owners to make payments on assets. Fortunately, the negative effects of bankruptcy don’t affect businesses nearly as much as individuals or families.

Regardless, business bankruptcy is a complicated process that takes owners away from the duties of running their business. Before considering a business bankruptcy, most business owners should:

· Negotiate with creditors to try to determine a different repayment plan that is manageable for business and its finances

· Discuss strategies with their CPA to determine if there are areas where costs can be cut and cash used more effectively

· See if they qualify for an emergency loan through the Small Business Administration

How to File for a Business Bankruptcy

Even if you take all the necessary precautions, it might not be enough to solve your business’s financial quandaries. When filing for a business bankruptcy becomes the only option left, working with a bankruptcy attorney ensures that you correctly go through the process of filing and follow federal bankruptcy rules. With so many differences between a business bankruptcy and an individual one, not to mention the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the expertise of a bankruptcy attorney becomes a major asset for businesses.

To successfully file for bankruptcy, businesses must determine which option is best for them:

1. Chapter 7. Most businesses try to avoid a Chapter 7 bankruptcy, since this usually marks the end of the business. With this type of business bankruptcy, assets are liquidized and the funds used to pay back the debts of the business. The court appoints a trustee to administer the entire process and ensure that creditors are getting their fare share.

2.Chapter 11. With a Chapter 11 business bankruptcy, the organization is restructured to allow the company to continue operating. Both the court and creditors can be highly involved with how the business restructures itself for future growth and financial health.

3. Chapter 13. This option is usually limited to sole proprietors who individually want to protect their assets and ensure that they are protected from the business bankruptcy. Like Chapter 11, the business is restructured and the court reviews the reorganization plan.

How to Choose the Right Type of Bankruptcy

While Chapter 13 is clearly for sole proprietors, other businesses and organizations can struggle to determine which business bankruptcy option is right for them. Fortunately, a bankruptcy attorney can help determine if liquidation or reorganization is best. Typically, a bankruptcy attorney will suggest Chapter 7 if the business is not a major public corporation, doesn’t have any foreseeable economic boost, has no intangible assets, and if the owner wants to close the business. However, a bankruptcy attorney might suggest Chapter 11 if the business can survive in the long-run.

How Small Businesses Can Benefit From Strategic Consultancy

No matter how big or small your business, you need to have a plan. The problem is, unless you’ve done a business degree at university (and the majority of business owners haven’t), it’s difficult to know what makes the difference between a successful enterprise and one that folds in its first year.

In exactly the same way that you would take your car to an expert mechanic to get it fixed, sometimes your business can benefit from expert strategic advice. And that’s where business consultants come in.

How can a business consultant help me?

Business consultants are, by their very nature, experts in business. But what exactly does that mean? Well, it means that they apply their training, personal experience and expertise to develop strategic plans for businesses, taking into account a few fundamental principles. Most businesses follow a fairly standard template model – the differences really depend on the details and perhaps a few outside influencing factors, depending on what industry you’re in. Business plans don’t have to be complex – in fact an overly complicated business plan can trip a new enterprise up before it’s even got off the ground.

A consultant who is expert in business strategy can take an objective look at your business and help you pinpoint both your strengths and your weaknesses. Do you know what your USP is? Do you realise what makes you more or less successful than your competitors? A business consultant does, and they can not only give you a report on where you’re going wrong, but how to fix it too. A good consultant should be able to:

• Give you a clear overview of the current state of your business
• Produce accurate predictions of the projected path of the business over a designated period (for example – a five-year plan)
• Look at what your competitors are doing and suggest best practice methods you can employ in your own business
• Create both long and short-term goals that are achievable and realistic
• Help you to develop new products or services
• Create an effective marketing strategy that incorporates both ‘real world’ and virtual (online) platforms

Promoting your business

Business strategy consultants really come into their own when it comes to marketing strategies, and any consultant worth their salt should be able to develop a cohesive and effective marketing strategy for your business. This includes using techniques that really showcase your business, including utilising online platforms.

A business strategy consultant takes an holistic approach to successful business development. It’s not all ‘fluffy’ stuff like marketing and advertising – it includes the grass-roots stuff too, such as ensuring you’re not overspending in some areas to the detriment of the entire business model. But they should always remember that consultancy isn’t about preaching – it’s about working with the client to achieve the best results.

Good consultants develop a symbiotic relationship with their clients, whereby both parties are working for towards the same outcome, a successful and growing business. For the consultant, it adds to their reputation. For the business owner, it’s a chance to get a ‘fresh pair of eyes’ to look over the business and help them develop a workable strategy that will encourage future growth.

Why Strategic Planning Is Important for Small Businesses

When a person starts a business whether it be a restaurant, bakery, small manufacturing plant, etc they do not want to always remain a “small fish in a big pond.” They want to become one of the “big fish” and in order to do that requires strategic planning. To increase their businesses revenue the owner needs to not only plan intelligent strategies but they also need to implement them wisely. If not implemented wisely the business is not going to see a profit and they may even be forced to go out of business.

Strategic planning involves formulating business growth strategies and policies over a specific period of time. If your business involves mobile or internet technology the trends in these fields change quite often so you would have to do it more often so formulating a six month to one year business strategy plan would make more sense than doing a five year plan. When doing business strategies or strategic planning you or the management team can concentrate on the entire business or just one aspect of the business.

Writing a business plan deals with the challenges that you are likely to occur when the business is just starting out. The actual strategic planning will deal the opportunities to grow the business and the methods that will be used. Although they are two different things, you do need to make sure that you have a business plan written up so everyone will know just what direction the business is going. If you do not have a business plan which is usually used for strategic planning there is a strong chance your business will not succeed.

In strategic planning there is no definite model that a business can use because each business is different and usually formulates their own model that will work with their particular business. Although the model may vary there are some important compounds that you need to include.

One component is the purpose of the business which is when the business will explain the entire idea of why your business exists. This component is not complicated and will focus just on the businesses objective. Another component is the ultimate goals of the business called organizational objectives which will help you achieve the purpose of the business. You want to make sure that goals you set are achievable within the time period you set up.

The next component is strategy planning for every goal. Having strategies in place will help to insure that you will accomplish each goal that you have set out. You should also make checkpoints so you can see if the strategy is working or not and if you need to make any changes. The last component is monitoring implementation of your strategy plan. If your strategic plan is not monitored you will not know how effective it is and whether it needs to be revised.

As you can see, strategic planning and good business strategies are very important to a business, especially if it is a new business.