Three Ways to Avoid Going Bankrupt

In all the hang-wringing over General Motors'(GM Quote) bankruptcy, we heard a lot of sympathy for soon-to-be unemployed suppliers and dealers. But did anyone spare a thought for those poor, exhausted bankruptcy court judges? Their workload has skyrocketed in 2009, and it looks like they'll remain buried in paperwork for some time.

Across industries, from travel to real estate to retail, businesses large and small have been declaring bankruptcy with disconcerting regularity. While each company's situation differs in the specifics, there are some common underlying mistakes that left each with no other option but to admit defeat. To prevent your own company from making a similar trip to court, it pays to look where they went wrong.

1. Don't judge the future by the past: In theory, it makes sense to be optimistic about your business. When drawing up a five-year plan, why shouldn't you assume that sales will continue to rise each year, along with revenue? ...