Bankruptcy is an important tool that can help you mitigate financial damage from debt. However, many people worry about future ramifications after they file. Although bankruptcy can certainly make some things such as starting a business a little bit more complicated, it’s far from impossible.
Todd Cushner & Associates are proud to help people figure out how to protect themselves, their assets, and their futures when filing for bankruptcy. Bankruptcy doesn’t have to stand in the way of starting a business. Here are some tips for how you can pursue your entrepreneurial goals with a bankruptcy in your past.
Consider Your Cash Flow Plan
Many business owners don’t start really thinking about cash flow until it becomes a problem. However, people with experience in bankruptcy know that, by the time money is a problem, it can be hard to get back on track. That’s why coming up with a vision for a healthy cash flow from the start can make such a big difference for your business.
One vital part of cash flow you can consider from the jump is payroll. What is payroll? It’s the process of managing payments for your workers, from gathering employee data, to calculating and scheduling pay, to managing taxes and more. There are a lot of cash flow pitfalls in the payroll process, such as making overtime mistakes or mismanaging tax payments. Consider investing in payroll software that can make payroll a simple, cost-effective process. An effective payroll service can automate wage calculations, recordkeeping, and tax deductions.
Take Advantage of Financial Lessons Learned
Filing for bankruptcy means you’ve gone through a challenging financial journey, and, odds are, you’ve learned some valuable financial lessons along the way. For example, you may come into your next venture more wary about what type of debt you take on. This can serve you well, even if it feels like it’s making your journey more challenging.
It can take some time for your credit score to bounce back after bankruptcy. Although there are several things you can do to improve your credit, in the meantime, you might feel like you only have limited options for business funding. You might find that banks and other traditional lenders are only willing to offer you smaller loans and higher rates until you can get your score up.
Although this can be disappointing, leaning on your past experiences can allow you to avoid riskier options that come your way. Some lenders may be willing to give you a larger hard-money loan, but the rates might be exorbitant and, ultimately, predatory. If you’re not confident whether a loan option is a good choice for your situation, talk with your lawyer or financial advisor. They can help you look at the big picture and see if a loan is right for you.
Give Yourself Grace
Finally, it’s easy to be too hard on yourself following bankruptcy. Filing for bankruptcy can be the absolute best choice for your financial situation, though it may still feel like “giving up.” If you don’t learn how to accept your past, you can wind up bringing a lot of emotional baggage into your future, which can make it challenging to run a business.
That’s why it’s so important to give yourself grace while you start your business. You might find that taking risks gives you a lot of anxiety, or you could run into imposter syndrome along your business journey. However, recognize that these feelings don’t necessarily fit the facts of your actual situation. If you’re keeping good records and making smart, informed decisions for your business, then you’re setting yourself up for success. You can’t make business ownership entirely risk-free, but you can learn to trust your instincts about which risks are worth it.
Bankruptcy can be a challenging experience, but it doesn’t have to put your whole future on hold. With a cautious, thoughtful approach, you can pursue your entrepreneurial dreams. We hope this article inspires you to get started!
Need an ally to help you navigate the bankruptcy process? Contact Todd Cushner and Associates today.
Photo Credit: Pexels
