Filing for Chapter 11 bankruptcy in Milwaukee can leave you feeling defeated as a small business owner, but it doesn’t have to spell the end of your entrepreneurship journey. In fact, many business owners go on to start thriving companies after learning from the mistakes they made with their previous companies. You just need to set yourself up for success before you start offering services or products to your customers. Here are a few simple steps you’ll want to follow as you build your next venture.
Protect Your Personal Interests
Unless you protected yourself by forming a separate and distinct legal entity for your business, your personal assets were likely used to settle your outstanding business debt when you filed Chapter 11 bankruptcy. Luckily, you can spare yourself this hassle by forming a limited liability company (LLC) or a corporation for your business.
These legal organizations separate your business—its expenses, assets, profits, and losses—from your personal assets and finances. If the new business fails and you have to file bankruptcy again, your personal assets will be safe.
Create Your Business Plan
Your business plan is your outline for success. It should include the purpose of your business, the types of services or products you’ll offer, your marketing strategy, and financial projections at a bare minimum. The more information you can provide, the better. Once you have your plan in place, let your small business planning attorney review it. During the review, you’ll learn which aspects of your business and your business plan could cause legal complications down the line. You’ll be able to avoid making many of the mistakes that cost businesses money as they grow.
Look at Your Financing Options
Anytime you file for bankruptcy, regardless of type, your credit score will take a hit. This can make it tough to get a business loan, but that doesn’t mean it’s impossible. You’ll need to think outside the box. Search for investors who will back your vision. Consider crowdfunding your new venture. Or start with an infusion of cash from your personal savings. Whatever you choose, have your attorney review any agreements you make with investors before you sign on the dotted line. Doing so will help you protect your long-term interests.
Make a Plan for Recordkeeping
One of the easiest ways to keep your business financially stable is by keeping great records. Make a plan for your recordkeeping efforts and decide which tasks you want to outsource. For example, if you struggled to keep track of your business expenses with your previous company, outsourcing the task to an experienced accountant can help you stay on top of things and make sure you have an understanding of where your company’s finances sit at any given time.
Building a Business After Filing Chapter 11 Bankruptcy in Milwaukee Is Possible
Building a business after filing for Chapter 11 bankruptcy will be challenging, but it’s still possible with the right planning and determination. If you’re trying to establish a new company, make sure you get the legal guidance you need to set your business up for success. At Kerkman & Dunn, our small business planning experts are here to help. Contact us online or call (414) 775-3481 to schedule a consultation.