The steps to consider when forced to close your business

The steps to consider when forced to close your business

On Behalf of | Jan 29, 2021 | Small Business |

You and your business partner made a gallant effort of it for a few years. Your small business shined for a while, and even received a write-up in the local alternative weekly. However, profit margins have fluctuated during the time of the COVID-19 pandemic. Even before this global crisis hit, you had to diligently work long hours just to keep your business in the black.

But things are not going so well. You see the declining sales numbers, the shrinking list of customers, and you shake your head in disappointment while understanding the reality. Your business likely will not survive. The foundation is cracking, and you know that it is time to get the wheels in motion to close.

Liquidate, pay bills and let people know

Obviously, you and your partner have struggled with the decision to end your business. But once you have agreed on what to do, you must understand some important steps. Here are some of them:

  • Inform the key people: This list must include your employees, customers, suppliers/vendors as well as those within the business community.
  • Liquidate any remaining assets: Review any inventory still in stock and decide which items to sell and which ones to keep. Sale options may include sealed bids, auctions and via the internet.
  • Pay outstanding bills: Creditors may be lining up to ensure they get what you owe them. By paying them immediately, you will avoid any of them pursuing legal action.
  • Provide the last paychecks to employees: Some of them may have been with your business from the beginning. Their loyalty helped your business succeed, so you still must and want to take care of them with that final paycheck and, possibly, severance pay.
  • Close customer accounts but stay in touch: Customers also helped your company succeed. Goodbyes may only be temporary, though, as you may rely on them for any future business endeavors.
  • Lay off employees and also stay in touch: For some business owners, this is one of the most difficult things to do. Some of your employees were in the trenches with you from the beginning. They were good for you and your business. You may even help them find new jobs.

You have taken the necessary steps to ensure the business closing goes as smoothly as possible. You did not want to end things this way. Now, take time to think things over, and, just maybe, you have another unique business idea ready for the world in the future.