On The Verge Of Bankruptcy?
By Susan Tose Spencer
5 Best-Practice Tips To Survive & Thrive
If you are a small-business owner who is still in business after the most recent economic downturn — that doesn’t mean you are out of the woods. There are many telltale signs that you need to consider, face the facts about the health of your business, and then come up with a strategy.
Tip 1: Face the Truth
- Is your company running a negative cash flow on a regular basis?
- If the answer is yes, it’s time to consider your options.
- Are you prepared to put more personal money into your business?
- If the answer is no, you probably will not be able to arrange a loan from any conventional sources, and unless you can quickly turn your cash flow around, you might run out of gas.
Tip 2: Maximize Your Cash Management
- Can you stretch your payables further by negotiating longer payment terms?
- Can you speed up collection of your receivables?
- Can you reduce your operating expenses and convert employees to part-time workers?
Tip 3: Look Objectively at Hard and Soft Assets and Customer Lists
- If you have been in business a few years, it is likely you have transferable assets with real value (actual and intangible) to a competitor.
- Examine your unique systems, formulas, and SOPs that can add value to another company.
- Take a thorough inventory of everything the company possesses.
- Examine your customer list one customer at a time, and consider how each one would fit in with another similar company and whether you could convince them to make that transition.
Tip 4: Identify Competitors That Might Be Interested in Your Company
- The most positive solution to closing a business is to find another company that will benefit from what you have and will pay money (or assume debt) for it.
- Select no more than two potential targets, because if the word gets out that you are selling your company, you might lose customers and employees before you can work out a suitable transfer.
- Plan every detail before you approach a competitor, and keep it 100% positive.
- Before you pitch a competitor, know what you want out of the deal.
- Keep your activities under the radar for maximum benefit.
Tip 5: Know What You are Selling and Have Facts and Figures Ready
- Make sure you exchange confidentiality agreements before you start.
- Give your best sales pitch on how your competitor will benefit by adding your company and its customers.
- If there is real interest, walk away with an agreed-upon outline.
- Follow up quickly, and try to wrap up the transfer in 30 days max.
Make the deal, and take a long, hard sigh of relief, and then move on!
Susan Tose Spencer is an entrepreneur, award-winning author of Briefcase Essentials, lawyer, and former minority owner, GM, and VP of the Philadelphia Eagles football franchise. Spencer has spent the last 25 years owning and running her own companies in exclusively male-dominated industries after turning her back on the “corporate world.”