Tips for helping to avoid business bankruptcy

There are many businesses that are just getting by in today's difficult economy. This has left many business owners wondering what they could to keep their business afloat and not have to file for business bankruptcy. While there is no "one size fits all" solution for every business there are things that every business can do in order to help their business achieve better financial health. It should be noted that while some tips will only help temporarily, others may be a more permanent solution. Finally, if a business owner is concerned about the potential for having to file business bankruptcy he or she should seek financial advice from a bankruptcy attorney who specializes in business bankruptcy. Here are some tips for helping to avoid business bankruptcy-

- Start with cutting expenses-Once you begin to realize that you may not have enough money coming in its time to cut expenses. Many business owners are surprised to find that the spending in their business has gotten out of control in a short amount of time. However, it should be stressed that you should not panic and begin cutting everything. Cost cutting should always be done with precision. If you cut things to deeply your business may not have enough to survive while if you fail to cut the right things any cost cutting may not be enough. You should also have an analysis of your short term expenses before you begin cutting costs. Do not be afraid to begin negotiating with vendors as they will want to work with your before the problems become larger and you end up in bankruptcy court.
- Always pay the employee payroll taxes-One cost of business that you should never fail to pay is your payroll taxes. You should always pay your payroll taxes on time and in full. Keep in mind that not matter what happens to your business (even if your do file for business bankruptcy), the IRS will hold you personally liable for those payroll taxes. Worse yet, you will not only have to pay any unpaid payroll taxes but any fees and interest that has accrued.
- Take a look at your bank accounts-If you begin to see that you will need to file for business bankruptcy the first thing you should do is look at your bank accounts. If you have a bank account with an institution that you owe money to they may be able to claim the account in lieu of payment. You should consider moving the account balance to a bank that you don't owe money to before filing for bankruptcy.
- Be honest about your financial situation-You should never try to hide the financial situation that your business is in. If you choose to go to a lender to try and get additional funding you should always disclose the full extent of where your business is financial. If you fail to practice full disclosure you could be charged with fraud. The legal ramifications of this could be far more costly and last much longer then you could ever anticipate. Remember, that standing by your ethics is not just the right thing to do but also the most cost effective thing to do, as well.
- Don't try to hide assets-All too often business owners begin to panic if they see business bankruptcy on the horizon. They begin hiding their personal assets with family and friends. Again, this action could have long lasting legal ramifications that you want to avoid. Keep in mind that most likely this will be discovered and you will be charged with fraud. You should consult with a bankruptcy attorney to determine the best course of action and trust in the fact that the process will help to protect at least some of your personal assets form your creditors.