Are you an entrepreneur or the owner of a new start-up? If so, one of the questions that might plague you is how to remain financially solvent when growing your business from a small start-up to a multinational organization.
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What is the global economy?
One of the challenges that the global business is facing is international hurdles caused by the worldwide corona virus pandemics, making for challenging trading conditions irrespective of the size of the business or the economic sector the business trades in.
Thus, by way of a comprehensive explanation and a justification of the statement mentioned above, let’s consider a succinct definition of the global economy:
Edology.com states that the “global economy refers to the interconnected worldwide economic activities that take place between multiple countries.”
In other words, we live in the equivalent of a global village. The rise of the Internet and the associated ease of access by netizens worldwide have resulted in the scenario where globalization impacts business organizations across the globe, irrespective of their size or trading niche. Consequently, global crises like the current coronavirus pandemic have made and are currently making, a significant impact on the worldwide supply chain of goods and services.
A typical example of this scenario is the impact of the coronavirus on Chinese manufacturing and export figures. China plays a critical role in the global supply chain of manufactured goods that are shipped around the world. As a result of the virus, large areas of the country have been quarantined; therefore, manufacturing statistics are down.
And, even if the factories are back up and running, there are internal supply chain challenges, so these products are not able to leave the country via container ships or cargo planes. Thus, companies that depend on products manufactured in China are experiencing a shortage of components, end-user products, and general supplies used in the manufacturing of other products like cars. And, retailers like clothing retailers are running out of stock, resulting in the significant challenge of staying in business long enough to get through this crisis.
Avoiding bankruptcy in the face of challenging economic conditions
Thus, one of the imperatives of modern business is to avoid filing for bankruptcy as a consequence of globalization. While there are several measures that you can implement to ensure that your business stays solvent, sometimes bankruptcy is unavoidable.
Consequently, if you find yourself in this situation, the best thing to do is to hire a Toledo bankruptcy attorney to advise and guide you through the insolvency process.
However, it’s important to reiterate the fact that bankruptcy is always the last option. Therefore, here are a few top tips to help you get through a tough time like this:
Cut your operating expenses
The first thing to do is to streamline your business process to cut your operating expenses to the bare minimum.
Sell machinery and other unnecessary office equipment
It is easy to buy too many technological gadgets and machinery. Thus, part of the streamlining process must include a look at what machinery and equipment are essential. Everything else can be sold. And, any unnecessary leased equipment should be sent back to the leasing company.
Improve sales figures
It is possible to improve sales figures by offering discounts and bulk-buy options. This will allow you to convert existing stock into operating capital. Offering good discounts will also go a long way towards building brand loyalty and will improve customer retention statistics.