It’s never easy to close a business.
You’ve poured your heart and soul into it and sometimes it’s like closing a part of yourself off.
We know that the past two years of compounding disasters have really taken their toll on business owners. And if you’re struggling to make enough sales to pay the rent, and you can’t see a way out of the hole, it might be time to close your doors.
It’s always ok to move on from your business, whether it’s because you need to or because your heart isn’t in it anymore.
If you are thinking about closing your business, there are a few steps you should take to make sure you do it the right way.
Even if you’ve been operating your business for decades, don’t assume your business will never close.
In fact, as soon as you start your business, you should begin to create a succession plan.
A well thought-out succession plan provides clarity, stability, and peace of mind and can help you prepare your business for sale sometime in the future. It will make an unexpected or forced closure easier to manage and may yield a value for years of hard work in a business.
If you don’t have a succession plan in place, then you’re leaving it up to chance that your business will survive after you leave.
When businesses close in local communities, there is a loss of goods, services, jobs, donations and sponsorships. Communities need businesses to thrive.
So as part of your succession planning, consider whether you can sell your business instead of shutting up completely.
If you sell your business to someone else in your community the benefits include building community capabilities, keeping knowledge in the community, retaining revenue and jobs in the community and the satisfaction of seeing your hard work continue into a new chapter.
If you’re planning to close your business and not sell it, the first thing you should do is to stop trading. If you’re selling products, then stop selling them. If you’re selling services, then stop providing them.
You’ll need to tell your customers that you’re closing so they can make other arrangements.
Particularly in small communities the closure of your business may mean that people are not able to access much-needed goods or services or donations for community events.
If you’re planning to sell your business, plan out the transition as best you can to prepare yourself and your employees. If you own a physical store, make sure to make it look appealing so potential buyers can see what they are getting.
Either way, plan how you’re going to tell your customers, employees and suppliers. Communicate to them that you’re closing shop or selling the business – and why – and be prepared for some potential criticism from customers or even friends and family.
Also consider any legal and regulatory requirements, consult with your accountant and make sure you have a solid exit strategy so that you have a plan for what you’ll do after you move on from your business.