Operating a business in Virginia can be full of surprises when the economy shifts, consumer interests change, new competitors enter the market or key employees end up leaving. In each of these cases, critical decisions must be made to identify new goals that will ultimately allow the organization to continue to work towards accomplishing their goals. However, if a business is not proactive about maintaining the health of its finances, any one of these scenarios could cause significant stress and strain.
In an effort to avoid having to file for bankruptcy, companies must understand the warning signs that indicate that their business is in dire need of a financial boost. According to azcentral.com, some of the red flags that generally precede bankruptcy include the following:
- A business is unable to attain credit from banks or other lenders.
- A business is unable to pay off loans.
- A business is struggling to overcome previous financial setbacks.
- A business is beginning to receive phone calls from debt collectors.
Fortunately, if a company recognizes that they are not in a good position in terms of their financial health, Chron suggests some alternatives that they can consider to avoid having to file for bankruptcy. Some of the things they can do include creating or modifying a budget, negotiate with creditors to develop a new agreement and finding creative ways to generate more cashflow. They can also reassess spending habits and identify areas where cutbacks could be made. In serious cases, they may choose to hire a professional consultant who can help them reorganize their finances.