Even the greatest businessmen in the world have been known to make mistakes in the past. Henry Ford and Walt Disney are just two shining examples of a fact that a financial failure doesn’t have to be the end of one’s corporate aspirations. Your business can be salvaged, provided that you manage to recognize the symptoms of the failure in time. With this in mind and without further ado, here are a few ways to recognize your company is heading towards a financial collapse, as well as several effective exit strategies you can turn to.

Look for the indicators

They say that the first step in avoiding the trap lies in knowing there is one in the first place. In this manner, the first step of treating your company’s failure would be to realize there is one, to begin with. While this may not be simple to pinpoint, there are several symptoms that are usually seen as reliable indicators that your company isn’t doing so well.

For instance, a prospering company is constantly looking to expand their workforce, so a hiring freeze might be just one of the signs your business is no longer growing. Layoffs and being abandoned by your best employees are another two symptoms to look out for. Finally, if the company stock is constantly declining and this decline is becoming steeper and steeper as the time goes by, you are definitely in trouble.

Provide a money influx

Even though there may be so many things that have gone wrong, the most common problem that young companies face is the lack of cash flow. You see, it’s common knowledge that for a new company to become self-sustainable, it may take anywhere from six months to two years. Until that moment arrives, your expenses will probably exceed your income. In order to keep your company running until it becomes profitable, you need to find a fresh capital injection. While some try to sell assets, create another stream of revenue or even start a crowdfunding campaign, your most reliable choice is probably to look for a bank, credit union or a company like Australian Lending Centre and apply for a loan.

Pivot

Sure, the cause of your financial ordeals may be the fact that you started with insufficient funds to begin with but what if this is not the case? What if the product/service you are peddling isn’t as suitable for your target demographic as you initially estimated? Well, in this scenario, the best thing for you would probably be to try and pivot your company. It is probably for the best for you to start small. Think about switching one of your departments to this new task and see how they fare. If this step yields you the expected results, you can later repurpose the rest of your company. If not, this error won’t be nearly as expensive as placing all your eggs in a single basket (again).

Declare bankruptcy

Finally, sometimes it’s just for the best to admit that you are fighting a losing battle and apply for bankruptcy. The best part of this plan (no matter how ironic it may sound) is a fact that not all bankruptcies offer you the same terms. In a situation where you still believe your business is salvageable, you can always apply for Chapter 11 bankruptcy and in this way stay at the helm of your company until you put it back on its feet.

Conclusion

For those who are willing to fight to the end, there is always a way. Still, before you even set yourself on the path towards reclaiming your business, you need to muster enough courage to look the truth in the eye and answer one vital question – is your business salvageable. Sometimes, the initial idea will be so unrealistic (although it may not appear so in the beginning) that your business will be doomed from the start. However, if this is not the case, you need to do all that is in your power to position yourself on the road to success once more.

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