Starting a new business is hard enough as it is, but what if you’ve gone out of business because you went bankrupt, and are considering starting a new business? Many people may think that it’s crazy, but at the same time, you still have to make a living. So the real question is, is it a good idea to start a new business after bankruptcy? And if so, what are the factors that you need to look out for and keep in mind as you move forward? Read on to find out, whether it’s a good idea to start a new business after going bankrupt, and what you need to know if you do.
How Are The Finances?
It’s a given that you need financing in order to start a new business. Now the issue with having gone bankrupt, is that it’s not the best look. When you have a bad record, especially one that has bankruptcy in the cards, chances are, most potential investors are going to opt bailing out, because according to them, and according to your financial history, this is too much of a risk to take.
It’s not all dark and murky waters, though. Sometimes, when you might be shopping around for loans with bad credit you’ll find that there are a couple of options out there you help you get started once again in the business world. Personal loans are a great opportunity for you to get a second chance and prove to yourself that you can start over, and have a successful business. Basically, the difference between a personal and traditional loan is that the loaner will give you the money on the basis of what your overall plan is for your business. If it seems legit and the numbers works, then you’re good to go. You just have to keep in mind that it might take longer than traditional loans for it to come through because there is a process by which they can guarantee that you are credible, and the interest rates as well as the fees might be a bit higher- however, always keep in mind that if your business plan is one that you have studied and analyzed thoroughly, that it will all pay off at the end. Always look at the big picture.
What Kind Of Business Will It Be?
Another factor that will affect the assessment of whether you should start a new business after bankruptcy or not is what kind of business you intend to take on. It’s not uncommon for people who go bankrupt with a certain business, to want to redo or start over within the scope of a similar, if not the same business. They do this because they feel they already have the experience within this field, and so they’ll be able to do things better the second time around.
While this approach is understandable, it’s not advisable because it’s highly unlikely that the players and clients in the market will want to deal with you again, because they know who you are and they know about the fact that you went out of business. This is why it’s advisable to look into new areas and have fresh ideas for your new business. This way, you have a better chance of infiltrating the market and making it a success.
The Nature Of The Bankruptcy
The thing is with filing for bankruptcy is then when you see that your business is falling apart, you will need to file for personal bankruptcy in order to keep your own finances separate from that of the failing business, especially if you’re a partner. It would be a lie to say that this does not play a role when it comes to starting a new business. It may be harder, as we’ve mentioned above, to apply for loans and to gain trust in the market again.
The good news here is that you’d have been wise enough to save your cash before it was too late, and probably have just enough to pick yourself up again, and start planning for a new business. This is keeping in mind that by filing for personal bankruptcy, your finances will certainly become affected, but you’ll still be able to have enough to move forward.
Always Keep Records
If you’ve been able to find any kind of financing to get your new business started, it’s advisable that you keep a record of how things are going throughout the process of how the business is growing and moving forward, down to the last detail. This is crucial because what happens with personal loans sometimes is that they may not be effective for the long term, and you might have to apply again. In this event, having records of your every expense is a very good look and will help you reapply for more loans to keep the business moving if need be.
It’s never a good feeling when you have a business that you work hard on but it simply, just doesn’t make it in the market for whatever reason, and you’re obliged to file for bankruptcy. It certainly feels like the end of the world, but it really isn’t. There are many ways for you to start over. You just need to be smarter about it the second time around. You need to be more focused in assessing every single aspect of the business and making sure that it’s as bulletproof as you can have it.
Bankruptcy is a curse and blemish on your reputation as a business person, but it’s certainly not a tombstone. It may just be a blessing in disguise if you go through the proper channels to start over when it comes to attaining financial support as well as how steadily the business grows by always keeping records of every single bit of progress as well as the finances. So yes, it is definitely a good idea to start a new business after bankruptcy, but remember even though it may seem like the smart thing to do, it would probably be smarter to try to break into a new field and market.