Characteristics Your Company Needs To Survive Bankruptcy
Bankruptcy is one of the most powerful tools available to businesses facing financially difficult times; but how does an owner know if their company can survive the bankruptcy process?
Below are a few characteristics your company needs to survive bankruptcy:
Flexibility
Your company and core stakeholders are flexible and prepared to change – radically change. Inflexibility is one of the biggest reasons that companies are unable to survive the bankruptcy process. Oftentimes they are operating under outdated business models and refuse to adapt. But the willingness to radically change the way you do business can mean the difference between success and failure in Chapter 11 bankruptcy.
Transparency
Doing a “sneak” bankruptcy on your shareholders and stakeholders can doom your company before it even begins the restructuring process. If your creditors and core employees feel that you’re being less than forthcoming, they might not want to stick around as you go through the bankruptcy process. Make sure that all of your core people (important creditors and employees) understand why you’re filing bankruptcy and how you plan to salvage the company in the process.
Prudence
After filing bankruptcy it is critically important that you make all of your business decisions prudent ones. If core creditors and employees get the idea that you’re wasting resources or making bad decisions, they will flee. Important employees will find jobs with other companies not in bankruptcy and creditors will push for a liquidation which means you won’t survive. This is why you must have top tier business advisors guiding you through the restructuring process so that you can both settle debt issues and transform your struggling business into a viable enterprise.