There is a lot of pressure on small businesses to do well after their launch. Within the first two years, roughly 20% fail, while 45% do so within a five-year time frame. And following the events of 2020, their vulnerability has only been emphasized. Last year, Bloomberg reported on predictions that small business bankruptcies will increase by 36%.
However daunting these numbers may be, the threat of bankruptcy can be avoided. There are many ways for business owners to safeguard against folding over. By enacting these safety nets, small business owners significantly protect their assets and lower their liabilities.
Seeking Help From Accountants
Accountants do more than crunch numbers and keep books. They also help organizations with financial planning. The importance of accountants was underscored by the onslaught of 2020. CPAs were brought in to manage bankruptcies and to prevent further closures.
Given the state of our economy, one can expect that accountants will continue to be indispensable to the nation’s small businesses. According to recent statistics, the demand for qualified professionals is expected to grow at a pace of 4% until 2029. This demand has led to the growth of online educational courses on the subject. According to the CPA Journal, online graduates seem to display stronger problem-solving skills and are more comfortable with technology. With more students taking online courses, this will open up more opportunities for small businesses to hire professionals at a competitive price.
This is an advantage for small businesses, as those with an online accounting degree will be fully qualified to ensure financial stability. And not only will this new breed of accountants help your business navigate financial threats, but they will also fit well in today’s remote work landscape. Regardless of how small your business may be, an accountant can manage your financial analysis, cash flow, taxes, necessary paperwork, and purchasing among other important financial aspects of the business.
Onboarding a Business Lawyer
Hiring an attorney may not seem necessary for a small business. But aside from translating legal jargon, business lawyers can help you navigate basic zoning, copyright, trademarks, and the dreaded lawsuits. A legal settlement could just be what puts you under, so it’s best to avoid that from the get-go. Arming yourself with a lawyer protects you, your assets, and the sustainability of your business.
If it is your first time hiring a lawyer, the Entrepreneur reminds you that there are many different specializations. Your family lawyer will not be able to fulfill the needs of your business. The basic skills that your business lawyer should be able to cover are contracts, intellectual property, taxes, and licenses. The American Bar Association has a great online referral program that can help first-timers match with a lawyer.
Identifying the Right Loans
Understandably, plenty of small business owners want to avoid any debt. But often, what starts as just being “a little short” one month, can quickly snowball. The key thing to remember is to not borrow too much or too little. A deciding factor should be based on realistic ROI, cash flow, and current economic health. Government loans, like the Paycheck Protection Program (PPP), will provide you with a buffer that can help keep your business afloat in times of crisis. Finding the right kind of loan for you should not be hurried. Take the time to layout your business plan, projections, and current debts. This way you can see which loans are the right fit for you and your specific needs.
While the future business landscape may not be clear, the steps you can take to avoid bankruptcy are. Recognizing the warning signs and being ready with the next steps will ensure your business can avoid closing its doors.
If you are considering filing for bankruptcy, you can get a free consultation with a local bankruptcy attorney in your area.
About the Author:
Alicia Parker is a business writer with a passion for helping out small businesses. She hopes her tips will help those struggling to turn their enterprise around. In her free time, she hikes and climbs.