What are the Early Warning Signs that Your Business is in Trouble and What Steps Should be taken to stop the Bleeding?
The above statement what are the Early Warning Signs that your business is in trouble seems to be an obvious statement. Most business owner’s Especially Small ones believe the moment sales decrease and the cash balance is below a set number they are in trouble. However, an owner should be monitoring a series of benchmarks.
It is important that the owner looks at his balance sheet first. If you add your cash and accounts receivable and the total is less than your accounts payable balance an alarm should go off. Why did this happen has sales been flat or decreased or if you are an inventory based business did you buy too much inventory.
The next step would be to take the sum of your cash, accounts rec and inventory and compare the total to the sum of your accounts payable and debt. If the total of your accounts payable and bank debt is higher, you are in trouble.
If you have performed these tests and you are in trouble you must take action. First off all avoid borrowing more money to finance the business – this one is the most important early warning sign for the small business owner. Do not use your personal credit cards to finance the business. This will only put you further in the hole.
If you find yourself in trouble contact a professional debt reduction company. Business Advisory Center settles past due payables, collection cases, lawsuits, judgments, loans, leases in default out of court. We have been providing debt relief since 1997.
Most cases settle for between 22% and 50% of the amount due with payment terms-usually 3 to 12 months.