What to do when you can't pay your bills

Wednesday, April 30 2008 @ 01:26 PM MST

Contributed by: psinewman49

Every Business Owner/Manager should read this.

Change, is a word that describes what happens every day to every one of us. Running a business in

today's economy forces change, sometimes hourly. Often the biggest pressure on a business owner/

manager is that of facing creditor demands for payment. It is the juggling of payroll, rent, taxes and other

essentials that first causes delay in payables processing. Rather than agonizing over creditor demands,

it is better to realize that almost all problems can be turned into a procedure. By recognizing that there

are options available for an orderly approach to cash flow shortages, a manager is able to decide which

to select.

Rather than suffer sleepless nights, consider what can be done and then when and how a chosen path

will be executed. So that need and potential benefit may be measured, professionals have isolated six

steps that serve to identify available direction for a business manager. Once aware of these six, a

business debtor can better determine which to use to best resolve an existing situation. But first, it is best

to discuss the six with an attorney and/or accountant, or a trusted advisor to obtain input and endorsement

of the preferred chosen path.

This review, with an already trusted professional is particularly recommended for a debtor's peace of

mind. In essence, he will gain support for what he wants to do. Also this is suggested to determine

which professional should be engaged to fulfill the selected action. When one decides which movie to

see, anyone's advice may be taken. To decide which cancer treatment to try, it's better to select a

a trusted professional.

Knowing what steps are available provides a track to run on; that alone serves to reduce personal

stress. Many will find these steps basic, they feel they know all this. Yet, when deciding which fits

a considered need the selected process should be coupled with a realization that each step requires a

different activity and more than likely a different professional. Being able to select where to start, and

which professional to engage will best assure the result (read success) you desire.

Professional implementation at any of the six levels is always better than to act alone.

Here are the six defined workout processes; they are listed in order of the most to the least desirable.

Rehabilitation, or extreme cost cutting.
Refinancing, to find new sources of capital.
Seek new equity, exchange some ownership for capital.
Debt Resolution, the process of delay and/or attaining satisfying settlement with creditors.
Sale of a going business.
Liquidation, using a variety of options such as selling pieces of the business, the whole business, or the act of bankruptcy (which sadly often includes the owner/officer and possibly his/her spouse).

A business owner/manager should reach for help sooner, not later. Having a known advisor's review

of these points and then engaging professional help will complete the selected but workable process far

better than if individually attempted without use of an experienced professional. There is no substitute for

experience, one should not attempt to work these processes alone. Engage a professional, one who is

experienced and capable in the selected activity. Doing so leaves the business manager free to run his

business. Business survival is a destination reached by consideration of which road is to be followed.

Jim Herst, is Chairman of Performance Source Inc, since 1963 serving businesses nationwide that have debt they want to pay but can't. His process can be seen on line at www.performancesourceinc.com. Jim welcomes comments and questions at herst@psi1963.com.

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