If you are one of the many innovative and wonderful entrepreneurs and business owners out there, first things first, we salute you. It isn’t easy opening and handling a business and being your own boss. Nevertheless, to shut down a business like yours can also be one of the most challenging things you would do. This article is meant to help you through the process of closing a business.
The Time To Shut Down A Business
Many factors go into why you would end up closing small business. In today’s trying times, fighting through the circumstances is not an easy thing to do. As a business owner, you might have been knocked down or knocked out by the pandemic brought upon by the COVID19. This is completely understandable and has, sadly, been a trend among small businesses worldwide today. However, take note that just because you are among those whose company did not get affected too negatively by the COVID19 economic crisis does not mean that you cannot still decide to shut down a business you built yourself.
See, an economic crisis pushing you to close a business that you worked your pants off can be one of the biggest contributors to why you would start closing a business. However, there are still other very valid explanations, not just that. For instance, even if you are indeed among those business owners who were able to withstand the punches of the economic crisis of COVID19, you can still decide to close a business all on your own. It might be because you've had enough of the beating up, so to speak. You might decide that the time and effort you are putting into it is not worth all the trouble anymore. It can also be because any recent events have made you realize that handling your own business is not the path you want to be taking for the rest of your life. It can be as simple as you don’t want to do it anymore. Or it can also be because you really aren’t earning any profit from your business. Our point is that the time to shut down a business that you gave your energy to is the time that you decide to do so. From the very start, you hold the fate of your business in your hands. No matter the circumstances, you have the final say into whether or not you close a business you built with your own hands.
How To Close A Business?
Let’s go a bit formal and legal as we talk about what it means to be closing small business. There are many different kinds of companies, one of which is the one you are currently operating. And depending on the type of business that is, some of the steps and pointers that we are about to give might not be completely applicable.
Just some background information, when you decide to close a business, the legal term for it is you are choosing to dissolve a business. Just like its everyday-use meaning, to dissolve means to break down and liquefy. Applying it in terms of your business, means that when you start closing a business, you are breaking down all that it is so that it ceases to exist. It also means that you are liquifying your business assets (making them into cash) to make it easier to settle the business accounts and fully shut down a business.
Here are more steps and guidelines about how to close a business:
∙ Consult Your Partners (If You Have Ones)
If you are not the only one that established or worked on your small business, then closing a business is not a decision you should make on your own. It is only proper to inform all the people who contributed to making your business what it is now. This is particularly important if your business is a partnership or a corporation. While you might be at the forefront of everything, you cannot close a business without talking with your partners (other owners) or your board of directors. This is not an easy decision, so it is important to have the necessary and significant people weighing in on things.
∙ Formulate Your Exit Plan
When you decide to shut down a business, you have to develop a proper plan of action. You have to make a written plan and documentation of what you plan to do. Closing a business is not something you can accomplish instantly or within a day. You have to consider many things - more if you are not just a small business. So it is important to have an exit strategy and map out who you should start talking to, what are the first things you need to do, and how you can close a business smoothly.
∙ Tell Your Staff and Your Employees
It is only fitting that one of the first people that hear about your plan of closing a business are the people who helped you make this business work - your employees and your staff. When you close a business, it’s no brainer that it will affect your employees' lives. These people have been under your care from the moment that you hired them, don’t stop looking out for them now. Make sure that your exit strategy includes taking care of them. And you start that by telling them at the moment that you are a closing small business.
∙ File the Necessary Paperwork
Depending on the business you are involved in, closing a business will involve filing different paperwork. The important thing is that you report to the authorities that you are now a closing small business. One of the paperwork you have to file when you shut down a business is the Articles of Dissolution. This document includes the name of your business, the date when it will take effect, and the reasons why you are closing a business you’ve established. You would also need to file your final tax return so you can settle all the necessary accounts with your state.
∙ Collect Outstanding Receivables and Sell Your Other Assets
Another important step that you need to take is to make sure all your collectibles are collected. Make deals with customers so that they are more encouraged to pay you back as soon as possible. You also need to sell all your other assets and empty out your inventory. You would need the cash to settle all your accounts with your creditors, suppliers, and other third parties, as well as with your partners.
∙ Pay Creditors and Other Third-parties
After you have collected all your receivables and sold all of your other assets, the next step in closing a business is to pay your creditors and other parties. It is only right that you prioritize them since they took a big risk in transacting with you and supporting or financing your business. It is morally and legally right for you to settle any accounts you have with them first before anything else. After making things right with them, you can also distribute to yourself and your other partners. These are two of the last things that you must do to shut down a business.
∙ Inform Your Customers
Of course, you wouldn't want to close a business without showing a little appreciation for the customers that have supported you from the start. This isn’t legally required but it is a common courtesy. You don’t have to do anything extravagant; just give notice that you are closing a business that they have relied on. It will also be helpful to them because they can start looking for someone else to take their business.
Take It Online! A Way To Bounce Back Before Closing A Business
Even after all is said and done, as a business owner, you’d want to really give it your all before throwing in the towel. Thus, if you are only on the verge of closing a business, this is a sign of giving it one more time and taking your business online. You can still stop yourself from closing small business. Strikingly is a website builder and an online store builder all in one. Here’s how Strikingly can help you take your business online.
1. Sign up or log in with Strikingly
Sign-up is free if you don’t have an account yet. But you can also avail of any of our account plans to fully unleash the potential of your online business.
2. Choose a template.
Strikingly offers you hundreds of templates to choose from. You can browse through them and choose what you would like to use and what is most appropriate for your business theme.
3. Add a Store section
The “Simple Store” section is the first kind of section that you will see when you add a new section to your Strikingly Website.
Starting a new business is not an easy feat, but so is eventually needing to close a business you worked so hard on. And while there are a lot of ways that you can try and salvage your masterpiece, it is completely normal to be in circumstances where you have to shut down a business. Nevertheless, bear in mind that closing a business doesn’t always mean that you failed as a business owner. Circumstances, like the COVID19 pandemic, sometimes would really drive you out, no matter how much resistance you pull. You did amazing things, that fact doesn’t go away just because you close up shop. And remember, you can always try and take it online - or even start a whole new business with Strikingly. Sign up now and let us help you keep on pushing!