Can I Start a New Business After Bankruptcy?
Bankruptcy creates a lot of insecurities and frustration. However, it doesn’t mean giving up. Global companies like General Motors, Apple, and many other companies came back after bankruptcy. Probably you may have to leave the luxurious life, but you need to stand on your feet again.
Although challenges will surround you after declaring bankruptcy, you need to take the right approach to restart. First and foremost, you need to understand your financial situation after bankruptcy and take advice from a professional if you need any advice.
5 Challenges for Starting A New Business After Bankruptcy
Birmingham bankruptcy attorneys suggest their clients overcome these challenges who want to start again a new business after bankruptcy.
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Obtaining Finance
One of the biggest challenges after bankruptcy is obtaining finance. With a poor credit history, chances are very less that you will get a loan. Although you have limited options, you can still start with them.
Some of the limited options are co-signer, government trusts, using your vehicle or other personal assets as collateral.
Remember, all these options involve certain risks, and you need to overcome them. For example, you may lose your assets if your business fails. So, you need to ensure that your business loan is secured.
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Building Trust
Another big challenge while starting after bankruptcy is building trust with customers as well as with investors. You must have a solid plan to show them that you can avoid past pitfalls and bring you success.
You need to create a proof-of-concept to show your family, friends, and colleagues who invested in your business earlier and ensure them that you will move ahead this time.
Building trust can help you recover from the devastating bankruptcy to move your new business further ahead.
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Setting Guiding Principles and Following Them Consistently
Business principles guide you to take the right action in different situations. Since you are starting again after bankruptcy, you may have made a lot of mistakes. You need to develop business principles to avoid those mistakes again.
It can be hard, but there is no way out. You should consult an experienced individual within your network to establish business principles for your business. However, the biggest challenge is to follow those principles consistently.
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Keeping Personal and Business Life in Balance
Most business owners mix their personal and business life. This is the main reason many people get bankrupted.
When the business fails, they lose their personal assets and file personal bankruptcy. So, you shouldn’t make this mistake again when starting a business after bankruptcy.
If you faced this challenge in the past, you know how hard it is to manage your personal and business responsibilities.
If you haven’t failed, be careful and try to keep them separate so that business failure should not affect your personal life.
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Applying the Lessons Learned
Mistakes and failures give the best lessons in life. So, you should figure out why you failed and what lessons you have learned from the bankruptcy.
It can be managing your finance, keeping your personal and business life separate, creating an ethical business culture.
So, you should also limit your debts for starting a business. Taking too much debt is risky and may put a lot of financial pressure on you.
So, it’s better you limit your borrowings for starting your business after bankruptcy. You should contact a business consultant who can help you in this regard.
Conclusion
Starting a new business after bankruptcy requires a lot of courage, and it’s crucial to remain courageous until you make it.
From obtaining finance to building trust, you need to apply the lessons you have learned from your previous failure. Hopefully, the above information has helped you to point out the major challenges that you need to deal with when starting a new business after bankruptcy.
