–Avoiding bankruptcy requires strong fundamental business planning and practices especially at the beginning to establish a strong business foundation. The business attorneys from San Luis Obispo’s Toews Law Group, Inc., have prepared a list of tips to help business owners avoid some of the leading pitfalls that can lead to bankruptcy.
The top mistakes that can lead to bankruptcy are:
- Taking on too much debt to grow the business—When times are good and business is growing at a brisk pace. taking on debt to expand might not be the best solution. Refinancing current debt might not be the best solution, either.
- Lack of bookkeeping and other critical recordkeeping—Keeping detailed financial records, as well as employee records, inventories, sales and purchasing reports, provide a snapshot of the condition of a business at any point in time. Solid business management and growth requires accurate data.
- Overly optimistic management—Growing too fast without a solid foundation, investing in new projects, expanded hiring, and even taking on debt or business partners without thoroughly analyzing business goals and capacity can lead to financial shortfalls.
New businesses, growing businesses and businesses at any critical juncture can benefit from getting the correct answers for all matters from operating as a sole proprietorship or a corporation, record keeping for solid business practices, tax compliance and other regulatory compliance, appropriate insurance, financing and a range of critical business practices and strategies.
Toews Law Group, Inc. can help new business owners get off on a solid start by helping to identify the best business entity, appropriate insurance coverage, accounting practices, and reviewing essential documents such as leases, contracts and agreements, employee documents, and all other documents relative to the business.
What are the best ways to meet the demands of a growing business? Can you meet the demands without going into debt? What is the best way to manage debt? What if you have outgrown your current location and need to get out of your lease? What are the alternatives to hiring more employees? What is the best strategy to bridge a growth phase to a solid foundation and avoid the perils of over-extending?
Anticipating the critical juncture
Solid planning based on solid data and practices is the smartest way to start and grow business. Anticipating and planning for the pitfalls of growth that is slower or faster than expected helps avoid survival-mode decisions. Just because business slows down does not have to mean it’s time to close the doors. Rapid growth does not mean it’s time to over-extend.
There is a success strategy that is as individual as your business.
The business attorneys in San Luis Obispo, Toews Law Group, Inc. can meet legal and consultation needs for every phase of business. The firm serves as business consultants for establishing a new business, restructuring a growing business, debt, sales, purchases, reorganizations of troubled businesses, and other workout situations.
Toews Law Group, Inc.
1212 Marsh Street, Suite 3
San Luis Obispo, CA 93401
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