In our experience, a business can end up in bankruptcy for a lot of reasons, many of them out of the control of owners or employees. But that’s not always the case—we’ve seen far too many business owners make the same mistakes and, in this series of blogs, we are chronicling the ones we’ve seen most often, so that you can avoid those pitfalls.
Strategy #3—Don’t Pay Attention to Anything Other than Your Product or Service
Unfortunately, for many small business owners, their expertise and knowledge is focused primarily on the product or service provided. They don’t have a solid understanding of anything other than the most basic finances. There’s money in the bank account, (they think) so they must be okay. It’s a very short-sighted strategy and almost always comes back to bite you. If you don’t have the financial experience, or you don’t like to handle the finances, find someone who can and does, or invest in some of the bookkeeping software available. If you can’t afford to do that, you’ll need to either bite the bullet and learn how to do it yourself, or decide whether you really want to be in business for yourself. Without the proper attention to costs and finances, your success will be nothing more than a crap shoot.
Strategy #4—Start or Fund Your Business with an “Informal” Loan from Yourself, Your Family or a Friend
When your business is just an idea, it can be natural to envision nothing but success. Accordingly, you might be inclined to borrow from friends or family members without documenting the loan in writing. If the business struggles, you can expect the lenders to get nervous and start asking a lot of questions about how they’ll get paid back. Whenever you need a loan, you should treat the transaction as if you were working with a bank. Keep the loan on your books, the same as you would with a commercial lender.
Contact Neuner & Ventura, LLP
At Neuner & Ventura, LLP, weknow that the bankruptcy process can be intimidating and confusing. Weoffer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey