It’s a fate no-one want to think about when they’re setting up a business. When you pour every bit of your soul, energy and effort into it- failure is a difficult pill to swallow. Unfortunately, it does happen (and often too) and so if you have found yourself here then know that you’re not alone. There are a number of legal and practical issues that need to be sorted out, here’s what you need to do.
Sell What You Can
Your remaining stock, business supplies, even office equipment can be sold to raise money to help pay outstanding bills. You are likely to need to sell at reduced prices to get it shifted quickly, but any money you can raise to pay things down is a good thing. Your competitors may also be interested in purchasing your intellectual property too. This includes trademarks, copyrights, and patents plus any works or jobs you have in progress. Your customer lists, company name or product names may also be of interest. There are quite a few aspects of your business that you may not even have considered that can help you to raise money, so do your research.
Speak To Your Creditors
Once you have raised as much money as you can from your business, you will need to speak to your creditors. Having this lump sum to offer them is helpful, from there you can look into negotiating a payment plan to cover the rest. Sometimes cases are a little more complex, and so if you’re unsure cut straight to the next point.
Hire an Insolvency Practitioner
When you can no longer afford to pay your creditors and have gone bankrupt, or your company has gone into liquidation, you are considered ‘insolvent.’ An insolvency practitioner (who usually has a background in accountancy or law) is licensed to advise on and undertake appointments about your insolvency. As this part of the law can be complicated, and particularly since you will be going through a difficult time dealing with the liquidation of your company, it’s advisable to seek professional help. A company such as Hudson Weir will be able to guide you through the process.
Learn From Your Mistakes
Don’t let your failure deter you from starting in business again in the future. Businesses set up by former bankrupts grow faster and do better than first timers, which makes sense. Think of everything you now know about business. A failure can show you what doesn’t work and put you on a better path for something that will. Evaluate everything that happened in the lead up to your failure and work out what you could have done differently. When you do start up a new venture, you’ll be much better prepared.
Have you ever experienced a business going bust? What was your next move?