5 ways to avoid bankruptcy in 2021
Developing a successful business is not easy. This field is unpredictable, so much so that you can go from smooth to difficult very quickly.
One of the challenges many small business owners face is staying afloat. Statistics from Harvard, a research organization, revealed a 29% reduction in the number of small businesses opened in 2020.
Now, while these statistics can be daunting, it is essential to remember that there are many small businesses that are still open to this day. Fortunately, there are some things you can do to avoid going bankrupt. If your business is in financial difficulty, here are some tips that can help you stay afloat.
# 1 Save 20% of your monthly income for unexpected situations
You have so much to spend. However, if you want your business to stay afloat, saving for an emergency is your best bet. Note that your business needs available capital to thrive in these tough economic times. However, many small business owners agree that this is a major challenge. But, the lack of cash on hand when financial turmoil hits, quickly ends a small business. This is why a business must save to keep operating.
These funds will come in handy if your income drops. Plus, having savings will prevent you from taking out a loan to help keep your business afloat. Try to allocate 20% of your total income to savings each month.
Even though it is difficult to save, it will prevent your business from going bankrupt in the event of unbudgeted situations.
# 2 Find an investor who will help your business grow faster
Business ideas are crucial for the success of a business. However, these alone will not make you taller. You need capital and network for your business to grow faster. And you can achieve it by bringing in an investor.
Well, a lot of people are still skeptical about investors, and for good reason. You will need to allow them to contribute to the way you build and run a business.
However, even with them, you still have the power to control your business. So presenting them will help your business grow. Investors will give you capital, which means you won’t have financial difficulties. And they can also introduce you to other people who can help your business grow. Once your business grows, your finances will be in better shape. Thus, you will have enough income to manage your expenses and save for emergency funds. Therefore, you are less likely to go bankrupt.
# 3 Get a loan of money and start investing in marketing
Your business needs financing to stay afloat. A cash loan can give you these funds. You can get it if you can prove that your business has started to make money and is gaining ground. If the idea of an investor is not for you, you can approach other lenders like Small Loans, commercial banks, and even accounts receivable specialists for a loan. However, before you apply to a lender, research and find the best one for your business and needs.
Plus, you need to market your business. Marketing increases brand awareness and ultimately sales. The more people know about and buy your products / services, the more income you will make, which will prevent your business from going bankrupt. There are several marketing strategies you can use, including social media marketing, paid advertising, internet marketing, or word of mouth marketing, among others.
# 4 Start using social media more often to reach new customers
If your business is not on social media, you are missing out on a lot of sales opportunities. This tool helps businesses engage and connect with their current customers. But it can also help you get new leads that you can convert into buyers.
There are a number of ways that individuals can gain new customers on social media. For example, one can use social media to market and promote their products and services. For example, you can put professional photos and videos of your products on Facebook and let people know what you are selling.
Additionally, social media can help you attract a large following by increasing your brand awareness. The visually appealing content that businesses post on social media can grab the attention of potential customers, who will become aware of your brand and may decide to buy from you.
In addition, you can create personalized audiences on social media. Note that social media channels let you know how many people were interested in your product, the number of shares, likes, calls to action, and purchases, if any. You can build a custom audience using these metrics, which will help you target people who seemed interested in your business but didn’t checkout for their cart. Then you can convert them to buyers.
When your business gets new customers, it increases your income, which in turn will help keep you afloat. Therefore, take advantage of this powerful tool today.
# 5 Create a discount program for your loyal customers
Customers should feel valued and important. And one way for businesses to do that is to offer discounts. Discounts help you attract new customers, increase your site traffic, and increase your sales. But when offered to repeat customers, it helps build customer loyalty, which is important to avoid bankruptcy.
Most businesses depend more on loyal customers than new ones. So be sure to retain them by offering them discounts to appreciate their decision to buy from you. You can give them percentage discounts on your products / services or lower shipping costs if you are an online business.
Even though bankruptcy isn’t the end of the world, no one wants their business to come to this point, especially if they can do something to prevent it. These tips will protect your business from financial ruin. Even if he’s about to fall, don’t give up yet. Use these tips to fight for your future.