To say that this year has been challenging for entrepreneurs would be a massive understatement. Many of the largest corporations in the world have been forced into bankruptcy or undergo massive restructuring. On the other hand, Inc.'s list of the 5,000 fastest-growing companies in 2020 proves that surviving this time of uncertainty is not impossible. In weathering any storm, a little innovation and foresight go a long way.
A silver lining of the current crisis is the rise of innovation in businesses of all sizes. Faced with the challenge of adhering to strict, new physical distancing rules, many American companies have moved most of their operations online.
From virtual summer camps and meetings to contactless payments and social accounts optimization, small to large businesses are taking creative measures and re-establishing themselves on the web. Delivering Happiness's guide to improving online communication outlines different ways in which thriving companies have maintained workplace culture amid the crisis. This web-based digital transformation has been integral to today's entrepreneurs' rising to 2020's economic challenges.
Meanwhile, businesses that depend on physical locations such as restaurants and retail stores have incurred unpreventable losses and absorbed the costs of doing business safely in the future of work. Because the global pandemic happened so quickly, not every business was stable or flexible enough to ride the tidal wave of change, which brings us to the next huge entrepreneurial challenge.
One of the biggest challenges that faces struggling companies is the need to restructure. In a nutshell, corporate or debt restructuring is part of the process for companies that are in financial disarray. It decreases the debt and extends payment terms on certain conditions. This usually includes [but is not limited to] changing the very structure of the business itself in the hopes of improving cash flow and helping the company get back on its feet.
In Nevada, this process is made easier by the Small Business Reorganization Act, also known as Subchapter 5. Rather than filing Chapter 11 bankruptcy, small businesses in this state can invoke Subchapter 5. This allows them to go through a less expensive, less time-consuming version of the restructuring process. This aims to increase a small business's chance of surviving rather than being forced into liquidation.
Be that as it may, filing for restructuring under Subchapter 5 is still time-consuming work, particularly for corporations and other business entities with less-than flexible corporate structures. This underscores the need for new entrepreneurs to be mindful of their business structures, which is dependent upon rules mandated by the state.
A ZenBusiness guide to forming an LLC in Nevada lists the different government requirements for creating a limited liability company. This includes adhering to tax laws and drafting an operating agreement. As opposed to a formal corporation's articles of incorporation, which are subject to mandatory state and federal structures, an LLC's operating agreement is much more flexible. It can also be used to customize ownership and operating terms depending on the company's current needs. In short, if you are keen on starting a business in the middle of a global health crisis, you might fare better, forming an LLC. An LLC can give you more flexibility, if you need to file for financial restructuring in the future.
These are just some of the many new challenges that entrepreneurs will have to face and navigate as the world struggles to spin on its axle during the most significant economic crisis of the century. Perhaps the most prominent entrepreneurial challenge of all is staying optimistic. But if you keep these challenges and potential solutions in mind, you might just be able to navigate your own path to success.
2020 has changed the future of work and workplace culture is at the forefront of these changes. The challenges of this year have taught us to value people; the people in our organizations, the people in our communities and the people in our lives. When you begin to put valuing people into action you can create a happier, more meaningful workplace and world.