There are many reasons why a business may run into financial trouble but it's always important to remember that a business struggling financially is not necessarily a failed business. In many cases, businesses that are struggling financially can find relief by filing for Chapter 11 bankruptcy protection. This type of protection may give them just the right amount of time to reorganize the way they function and to slowly pay off debts. The company will hopefully continue to stay in business during this process.
There are many songs written about love and its many downfalls and triumphs. It can be an emotional rollercoaster with, hopefully, a positive outcome. While we may not hear many songs written about bankruptcy, the same could be said about the process.
While every business owner has the goal of ensuring for a healthy profit margin, there are sometimes circumstances outside of one's control that force a business to take on more debt and operate in the red. For a business owner, taking on too much debt can quickly upset what may already by a tenuous financial balance and eventually result in a business owner being forced to make some tough decisions.
For businesses in serious debt, Chapter 11 bankruptcy may be the best solution, but many business owners have other options. The federal Small Business Administration provides several loan programs that help troubled businesses get out of debt, so that they can operate in better financial health moving forward.
There are numerous factors that affect whether or not a business is profitable and fiscally sound. Competition, new technologies, burgeoning markets and changes in the U.S. and global economies are just a few of the many things that can influence and ultimately determine a business' success or failure. Frequently, these factors are beyond a business owner's control and can result in a significant loss of market share and millions of dollars in losses.