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You’ve come to realize it’s time to take a walk on the real side. You gave it your best shot, but things are looking bleak and you’re now contemplating filing for that which should not be named. Everyone starts their business with high hopes for what the future will bring. Sometimes though, hopes don’t pan out and hard decisions must be made.

But cheer up, difficult times don’t have to mean all is lost.Here are the ins and outs of avoiding bankruptcy as an SMB.

Turnaround Is Possible If…

When your core function is viable, regardless of the overall situation in which your organization finds itself, moves can be made to save the company without resorting to a bankruptcy filing, as long as the key members of your team are willing to do what needs to be done to rejuvenate the concern. Even though you had what it took to start the business, you might not be equipped to run it. Ditto the other members of your senior management team. In cases such as those you have to be capable of recognizing what you did before didn’t work and be willing to accept the leadership of someone who is more experienced. Bringing on a consultant, while adding expense to an already floundering situation, might well be the decision that helps you get back on track.

Assess the Situation & Adapt

Before you can develop a strategy, you have to know exactly where you are. Stack your debts against your revenue and determine how much money you need to survive the situation. Taking your cost structure into consideration, create a new budget that would allow you to continue operation—even if it means you’re limping along for a while. You will likely have to cut your costs to the absolute bare minimum, so this is not the time to be conservative about it. You want to get your costs as low as possible.

Renegotiate Deals

Once you’ve winnowed your cost structure to the bone, get with the people you owe and lay it all out for them. Let them know how dire things are, show them how you can still be viable and eventually pay them in full if they’ll work with you to execute your turnaround plan. This could come in the form of longer payment terms, consigning materials from vendors and/or restructuring loans. The key here is they will get all of their money if they work with you. If you go bankrupt they’ll have to accept pennies on the dollar. Getting new small business insurance quotes might help you free up some operating capital as well.

Assignment for the Benefit of Creditors

If all else fails and you’re going down the tubes regardless, consider liquidating your assets to pay off your creditors and starting a new venture. This process is called an “assignment for the benefit of creditors,” or ABC. In this instance, you’ll sell off your assets to a company specializing in the liquidation of insolvent businesses. This entity will then dispose of them and pay your creditors out of the money it gets from doing so.

These companies can typically get more for your assets than a bankruptcy trustee would, so your creditors will get a larger percentage of what they are owed than if you filed bankruptcy. Yes, your credit rating will take a hit, because they won’t be paid in full, but chances are, it’s already pretty soft if you’re in trouble. The good news here is you avoid having a bankruptcy on your record, which stands you in better stead when starting subsequent endeavors.

Ultimately, knowing the ins and outs of avoiding bankruptcy as an SMB will better position you to fight again another day.