Bankruptcy is the result of a financial imbalance. Although the immediate cause of bankruptcy is lack of cash, it is the imbalance in cash flows that causes the company to leave the market. In theory, bankruptcy can be prevented - you just need to attract investors. However, in practice, this scheme does not always work, so the problem must be solved in detail.
Instructions
Step 1
First of all, you need to stock up on cash reserves. It is cash that will serve as a guarantor of your successful overcoming of the crisis, and this is the only guaranteed way to avoid bankruptcy. The cash holdings must be such as to offset the costs of the organization from the start of the transaction to the moment the company receives income.
Step 2
The next step is to increase your income. Review all your sources of income and answer the question if they can be optimized. If these are sales, then they need to be urgently increased, but not by lowering prices, but by increasing the margin, the size of the check, the conversion of buyers and the advertising coverage of the target audience. It should be said that this method is universal, and is applicable not only to neutralize the signs of bankruptcy, but also to strengthen the company's position in the market.
Step 3
Try to persuade your customers to give you a prepayment to cover costs instead of paying on delivery.
Step 4
Look out for late payments and unpaid bills. If there are any, then actions should be taken to speed up the receipt of money.
Step 5
After that, take care of the expenses. Optimize your purchases first - surely many of them can be canceled or postponed in a crisis situation. Leave only those expense items that in one way or another increase your income. Moreover, they increase in the short term.
Step 6
Consider your company's record keeping process. Are all invoices processed on time? Are there any problems with deferring income due to the fault of your accounting department?
Step 7
Work with your debtors to develop a payment plan. Sometimes only this step can prevent bankruptcy of an organization.
Step 8
Review the marketing practices your organization is using. And this is not only about instructing the marketing staff of the organization, but about the dialogue with all employees. Both manufacturing and sales must be clear about the distinguishing features and benefits of your product or service. Pay special attention to targeting your marketing efforts.
Step 9
Working with the optimization of the staff can significantly reduce costs. Of course, you should not fire employees right away - sometimes this can only bring additional costs. But sometimes the mere rumor about the possibility of dismissal makes employees work much more efficiently. Or you can explain to the staff the prospects of the company, because bankruptcy is the last thing people working in your organization dream about.
Step 10
Consider the tax costs your company pays. Perhaps an alternative taxation system would be more rational.
