It might sound harsh, but sometimes giving up is the best solution, in this case, filling for bankruptcy.
People say that you need to hustle, to find your way and try many things in life.
Tying to start a business is really hard nowadays especially if you want to focus on creating a physical product of some sort rather than providing services. You might have the perfect business plan and a great partner, maybe also a prosperous investor that has all his confidence and finances tucked in the business you vouch for, you can indeed fail at one point.
Why businesses want to get loans
Even if you have the money to start the business, you will find yourself at one point, usually when wanting to expand, that you need extra help for continuing your business. Either you want to go for a bigger location, buy more machines of hire more people, you might want to consider opting for a loan.
Sometimes you have the best business idea, but not enough money to start it and no one actually believes in your business plan, so they don’t want to partner up with you. IF you feel this will surely work but you just need a cash nudge, then you will get a loan.
This might work, or might not. It’s all in how good you can manage cash flow so that you don’t get into any trouble. But sometimes, recession comes, or maybe a bigger company that provides more volume, or much cheaper services that might get you out of business in just a few months. Unexpected things can come up in any minute and ruin everything you built for years. If you had any loans in the past and are still in dept, most of the time the solution is filing for bankruptcy.
It sounds bad, but this could be a way out of the situation and provide you with a clean start for any other projects you might want to start or take part in. If you follow some rules, this is an easy process with not so many downsides if you are careful. You can even get a new loan after bankruptcy for a new business.
What not to do when filling for bankruptcy
Don’t make transactions that might look suspicious. Try not to spend too much on things you don’t necessarily need at that point. Stick to the basic spendings and that’s it.
Don’t create even more debt by using your credit cards. Use debit cards instead and don’t make deposits into your bank account.
Try not to pay other creditors because that will look suspicious and be sure to stay in your bench when it comes to suing other people or companies in this time frame.
Transferring money or properties shouldn’t be an option at this time. Maybe you should consider this after filing for bankruptcy and getting a clean record.
Either way, bankruptcy as solution shouldn’t be the starting point of any business. You want to succeed and that’s the mindset you need to focus on.