Closing a business takes delicate, detailed planning

| Jun 9, 2020 | Business Formation & Planning |

For more than two months, your business has struggled due to COVID-19 restrictions. You have done what you can to service your customers in limited ways. But the revenue has been just a trickle compared with what you and your remaining staff were accustomed to for your small business.

Signs of a business rebound are not likely even with the recent easing of COVID-19 restrictions in parts of Tennessee. It is a little too late. Years of devotion and community involvement will not be enough to save your business. This is the moment you had dreaded, but it is reality. It is time to permanently close your business.

Many steps are necessary

The planning started when you began your business, and it continues as you close your business. The burden is on you as well as any business partners. However, it is critical to contact experienced professionals such as accountants and attorney for additional guidance.

There are many steps that you must take when closing your business. They include:

  • Liquidating your assets: Once you have finished inventory, determine which assets to keep and which ones you will sell. When selling assets – such as furniture, equipment and products – you have options through auction, sealed bids as well as via the internet.
  • Pay what you owe to creditors: Do this as soon as you can. You more than likely owe money to equipment and product suppliers.
  • Close out all customer accounts: In your years of operation, you have gained loyal customers many of whom you know on a first-name basis. After closing their accounts, it is crucial to maintain these relationships as you could work with them in the future.
  • The task of laying off employees: You likely already have laid off some employees during the COVID-19 crisis, now the remaining ones must be let go, too. This is never easy as you have built solid personal and professional relationships with them. You may consider making an extra effort by talking with business contacts to help your former employees land jobs elsewhere.

Your business had a good run. It is just too bad that it ended due to uncontrollable matters. Your next step could be retirement. However, as entrepreneur that scenario seems likely. You have many other ideas for creating a business. Move on. You have the needed experience to make another go at a successful company.