Bankruptcy is a common phenomenon around the world. In some cases personal bankruptcy is commonly attributed to mismanagement of funds. Some people simply blame the economy whenever they go bankrupt or their business goes bankrupt. This bankruptcy is mainly due to mismanagement of fund or lack of foresight by the sellers. If the sellers lack the required foresight to foresee any future economic hardship their business will actually go bankrupt. In this post we will closely examine phenomenon of bankruptcy and what actually causes this bankruptcy. We will mainly delve into preventing bankruptcy rather than getting out of bankruptcy.
Prevent bankruptcy by avoiding loans
Loans are the main reason why people and businesses become bankrupt. Even governments are bankrupted by loans from other governments and investors. The best way to prevent bankruptcy is to avoid loans from both the private and public sector. Loans might seem like a good way to increase your production or to buy nice things that you have always wanted but I will personally advise you to stay away from loans. They have ruined a lot of people. This is due to their interest policies. Most loans come with interest that is added per annum or per month. This interest is the main cause of bankruptcy among many people.
Sometimes when running your e-commerce business you need to focus on bootstrapping or selling shares of your company in exchange for much needed capital. Loans are the main cause of bankruptcy. This is due to the fact that loans always have interest.
Prevent bankruptcy by avoiding expanding too fast
Another common trend in bankruptcy is expanding of your business too fast. This causes you to stretch your resources and sooner than later you will find yourself bankrupt. This is actually very common nowadays.