When owning a small business, finding yourself in financial trouble can be a nightmare come to life. It leaves you in a position where you are struggling to get things paid and the hill gradually grows steeper with each passing month.
But there are solutions and advice that can help your business when finances aren’t what you hoped for and things are unusually tight. Don’t make any rash decisions because you likely didn’t get into the situation overnight, so you won’t get out of it overnight, either.
Follow these helpful tips for what to do if your business is in financial trouble.
If Nothing Else, Make Sure Your Taxes Are Current
The very last thing you want is to find yourself behind on taxes because the penalties could be severe depending on the situation. For that reason, always make sure that your taxes are paid on time. Taxes are withheld from your employees’ paychecks and payroll taxes need to be paid correctly.
Getting in debt with the IRS can be a long-term endeavor to get out and filing for bankruptcy will not make those debts disappear. Depending on how bad you let it get, jail time is not out of the question. If nothing else, make sure your taxes are current. Taxes are so important, so some business owners may feel more comfortable contacting an outsourced CFO to deal with them. That would ensure that they are on time and completed correctly.
Don’t Try to Transfer Your Business
When in financial trouble, business owners have been known to transfer their business property over to a friend or relative in an attempt to hide from creditors. But the thing is that creditors are used to seeing this and are able to track down the transferred assets and claim that property.
Doing this can not only still result in your business being taken by creditors but it can land you in legal trouble. Civil suits or criminal fraud charges are serious business and the last thing that you need to land yourself in.
Don’t Fudge Your Debts
When a business is fledgling, it can be easy to try to obtain a loan using falsified information to get a more favorable loan. There are a number of reasons to not do this. One, you may be getting terms that you really can’t afford but the bank is unaware. This will come back to bite you when you can’t pay the loan.
Not only that, you have obtained the loan through the use of fraudulent information. If this is discovered, you could be personally liable to the creditor, which is even worse.