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Financial Problems? DON'T do these 5 things!

Discussion in 'Accounts and Finance' started by R.L. McCullough, Oct 17, 2015.

  1. R.L. McCullough

    R.L. McCullough Entrepreneur

    All business operations involve some degree of risk...and sometimes that risk turns on you and your company faces serious financial problems.

    It happens. Many owners, officers, and managers often overreact, act in haste, or make one of these 5 major mistakes because they:
    1. Refuse to radically reduce overhead. (Over-paid staff, unprofitable “ventures”...get rid of them now.)
    2. Fail to understand and act upon financial reporting. (Control cash-on-hand, take care of creditors always, know and understand your P&L and balance sheets.)
    3. Give creditors additional collateral in company’s property or Accounts Receivable. (Unwittingly making your creditors your partner can hamstring your ability to effectively deal with any future lienholder.)
    4. Lie to creditors. (If you opt for bankruptcy, lack of transparency can haunt you in front of a judge.)
    5. Refuse to open your eyes and deal with reality. (If the company is hurting, face the facts, make drastic changes, and get professional help.)
    You may own and operate a business successfully in “good times”, but that doesn’t mean you actually have the skillset to navigate through stormy weather when it comes. It takes experience, training, and genuine knowledge of your options to make the absolute right choices in times of trouble.

    If you spend more time juggling creditors, going over “the books”, and fighting to keep customers than you do in actually operating and growing your business, it’s time to get professional help.

  2. omison

    omison Entrepreneur

    A few of my earlier mistakes dealt a lot with unrealistic projections, and therefore led to unrealistic deals. A few that burned bridges with folks I really respected.

    I quickly learned to change.

    I've become a lot more careful, but still a little reckless and daring...but not with the finances anymore...
  3. Joekin

    Joekin Entrepreneur

    I have a business that is a few months old. I must say, this information is very insightful and it will help me avoid mistakes Iwould have made. Thank you very much.
  4. nailah783

    nailah783 Entrepreneur

    That's why it is a good idea to do all your research on the type of business that you will run before jumping into business. You have to know how to navigate those stormy waters. It can be very difficult, but you have to be smart, and either cut your loses or move forward and push through. It is up to what is going to work eventually or not, and what you can afford or not.
  5. dyanmarie25

    dyanmarie25 Entrepreneur

    Thanks for sharing those tips to us here. Very relevant and helpful. I am not into any kind of business yet, but I would surely keep those things in mind and apply them once I have decided to venture in a business.

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