Filing for bankruptcy is a spiritually-depleting, financially-depressing, just downright hard experience to go through. Whether you file through an attorney or on your own, each stage can be overwhelming to navigate, and thinking about life after bankruptcy seems far off.
For many people, life after bankruptcy includes building a small business and achieving new visions of financial freedom through this almost impossible dream. As inaccessible as building a small business after bankruptcy seems, it can be done by taking intentional steps before and after launching your new venture.
Let’s dive into steps critical to financial health and sustaining business growth you should take before and after launching a new business.
Steps to Take Before Launching Your New Business
Once you’ve decided to build a new business after bankruptcy, there are some important actions to take and decisions to make before cutting the red tape at the launch of your new business. Here are four steps to take before launching your new business:
Do a thorough self-assessment
Assess how you’ve matured through the bankruptcy experience. Honestly identify spaces you’re doing well in and areas still in need of improvement that could directly affect building your business. Authentically analyze:
- Why you filed bankruptcy in the first place.
- Why you feel now is the time to start a new business.
- How you plan to navigate the consequences of bankruptcy while building a new business.
- The current economic outlook.
- Your industry knowledge.
- Any past mismanagement of finances.
Audit your finances and create a financial plan
Take a good look at your current financial situation. Audit your assets, liabilities, and investments. Be honest with yourself about how well you’re doing financially and if you’ve broken the bad financial habits that brought you to bankruptcy in the first place.
Take any steps you can to clear up existing financial obligations, remaining debt, or money issues negatively impacting your ability to rebuild. One of these steps could and should be repairing your credit. Doing things like reporting any errors on your credit report, making regular payments on time, and sticking to a financial budget all slowly but surely repair your credit.
Create a detailed financial plan for your business. List any potential or current investors, cash options, and loans available to you. The more detailed you are, the less likely you’ll be to fall into bankruptcy again.
Thoroughly research your industry, business potential, and competitors
Ensure you know what you’re getting into before launching any business venture. Do thorough research about your specific industry, including its current financial outlook, the longevity of businesses currently in the industry, and consumer trends that can influence your success.
Collect a good amount of knowledge on the potential your specific products/services have in the industry and the projected profitability of your business. You also want to thoroughly analyze your potential competitors, taking note of what’s working for them and what’s not. Use what’s not to see how your products/services fill those specific gaps.
Create a business plan
Write a thorough business plan that includes what type of business you have, an analysis of industry profitability, and future projections. Use small business resources like the following to ensure your preparing a quality business plan:
- SCORE
- Small Business Administration
- Entrepreneur.com
- A personal network of business owners
- Business coaches or mentors
If you’re financially able, get your business license, file any necessary trademark paperwork, secure any additional licenses or certifications pertinent to your business operation, and ensure any other business documents are accounted for.
Steps to Take After You Launch Your New Business
Once you’ve taken the above steps and successfully launched your new business, there are additional steps to take to ensure your business grows and your financial landscape is progressing. Here are three steps to take after you launch your new business and keep in place throughout the life of your business:
Hire professionals
If we learn anything from bankruptcy, it’s how beneficial it is to seek help from professionals and invest in experts. A capable business attorney can help you navigate any steps needed to clear existing debt and stay on track with any requirements outlined in your bankruptcy paperwork. A trademark lawyer can ensure all of your logos, brand designs, and product specificities are protected.
A financial consultant can ensure you’re making the right decisions with your business revenue. An accountant can ensure your budget, spending, and saving habits are in good standing. You should also explore investing in a business coach or mentor. These professionals can act as an accountability partner, analyst, and emotional support system all in one.
Create systems for everything
After you’ve launched your business, ensure you have systems in place to keep all of your business information organized. Create a system to track your business finances to a T; this could be through the use of financial mobile apps, budgeting software, or financial tools like accounting software.
Analyze and track all business interactions, customer behaviors, and employee engagement. Keep and tweak what’s working and adjust and shift what isn’t. Invest in top-tier technology and training to ensure you’re using systems effectively and correctly.
Always keep team members, investors, and partners in the loop
Be overly transparent about the ins and outs of your business with team members, investors, and partners. Host open discussions about how to improve operation and incite growth. Hold monthly meetings to discuss your business progress, pressing financial matters, and anything else that affects the longevity of your business.
Ensure you’re doing everything right this time. Be as detailed as possible. Back up everything. Build a team you trust and only hire quality employees that are right for your business.
