How do you close a small business?
Before you decide to close a small business, think about what you have that might be worth something. Even if the business is in extreme debt there could be value that you don’t see. Consult with two or three business brokers that may specialize in selling your type of business or businesses in your area. If it is determined there is no value to try selling your business here is a list of ten things you might want to consider doing.
- Get all necessary paperwork together that you will be required to permanently close and dissolve your business.
- Review all contracts to make sure you fulfill all obligations you have entered into.
- Pay off all financial obligations required that may effect you personally. Small business owners are often personally liable for business debts for personal guarantees so figure out what needs to be paid off and what may go away.
- Depending on what type of business you operate, it may make sense to give your customers notice that you are closing and provide them alternate sources that they may use to replace whatever product or service you offer.
- Notify vendors of final orders and final day of operation so no more deliveries or services are provided.
- Sell any assets that have substantial value. This may be patents, trademarks, domain names, websites, equipment, real estate, or goodwill. You may be a failing business but perhaps you have one asset such as a one word domain that may have a 6 or 7-figure value in the hand of the right entity. Be sure to get that value out of the business.
- Notify all shareholders of the plan to close and provide a detail plan on what is going to happen with any entity assets.
- Consult an attorney to be sure you understand fully what your situation is and what is required in your local area to close or dissolve properly,
- Review all credit card and bank statements over the past 12 months and be sure to cancel renewals on all products and services set for automatic renewal.
- Send a final Thank You email to your customers, vendors, partners, and providers and give them a short explanation of why the business is closing. Do not provide integral details but a general explanation is good. As an owner this can buy you a lot of goodwill if you consider opening a business in the future or perhaps seek employment in the future.