Why New Business Owners Should Be Cautious About Early Expansion
When a prospective entrepreneur starts a new business venture, the objective is presumably success and ultimately ample riches from a profitable endeavor. This is possible for some new businesses, but it is only the case for some. The Bureau of Labor Statistics indicates that 22% of new companies do not make it past their first year, and once a business makes it to year five, it has a 50% chance of failing. There are many reasons why it can take a lot of work to build a successful business that lasts and beats the statistics. One is the eagerness of new business people to want to grow and go big too soon.
Starting a new business can be an exciting time in a person’s life, and dreams of what a business could be, make it easy for emotions to take over logic. As a result, the intention to expand sooner than the company is ready may actually position a company for failure. And if the yearning and enthusiasm to grow is too great, taking on more lines of credit to make one’s vision become a reality is likely the method that will be used. However, this can be a prescription for substantial financial woes, and ultimately, a business that cannot pay down such high debt may lead them to consider bankruptcy.
If you are having issues managing your business debt, bankruptcy may be necessary to get your financial situation under control. For assistance and help, the New York City business bankruptcy attorney at the Law Office of Harry D. Lewis is here for you.
Keeping Expectations Sensible May Help Businesses Avoid Bankruptcy
As one embarks on a new business venture, it can be an undeniable urge to trade patience and due diligence for zealous action to expand operations quickly. However, in so many situations, it is just this that is the origin of the demise of many businesses across the nation. Sometimes, when a business owner takes their time and nurtures their operations, allowing them to mature at the right pace, this alone can be critical to their future success.
As a result, it is often the best advice for new business owners to start small and allow their businesses to develop. Taking out minimal credit and debt keeps financial obligations more reasonable and grounded.
If a company is healthy and growing with the profits to back up by taking on more loans, then that may be the right thing to do. However, it is best to hold off until the business warrants the extra debt and financing. Once debt starts to build up, it can become uncontrollable quickly. Suppose the business is not established enough or has the merit to show that it can pay back financial obligations when payments become due. In that case, it can be stressful for a business owner who does not have the means to keep their accounts current.
Speak to a New York City Business Bankruptcy Attorney Today
It is understandable to have high aspirations and want the best for your business and future. But every decision you make matters and will impact your business overall and its ability to be sustainable over the long term.
If you have questions about business bankruptcy in New York or if you would like to learn more about what you can do to fix your tumultuous financial situation, please call the New York City business bankruptcy lawyer at the Law Office of Harry D. Lewis to schedule a free consultation at (212) 813-8393.