When you first start a business, you’ll have so many dreams and aspirations for the company. But things don’t always work out the way that we hoped and the reality may end up being very different from the fantasy. You might find that you can’t make enough sales to keep the business going and you’re forced to close for financial reasons. When you run out of money to put into the company and things still aren’t turning around, you don’t really have a choice. Some people also find that running a business isn’t what they thought it would be and it doesn’t really fit with their lifestyle. If they have a family, for example, and they want to spend more time with them rather than chained to a desk all of the time, they might decide to pass the business on or just close it down entirely.
It’s always a sad day when you have to close your business down because you’ve been there from day one, building it from the ground up. Closing the doors for the last time and saying goodbye is going to be tough, but it’s often the right decision. But there are a lot of things to consider when you’re closing down a business and you need to ensure that you’re doing things properly so the transition is as easy as possible for you and your employees. These are the important steps that you need to take when closing down a business.
Decide Whether Closure Is The Right Option
In some cases, closing the business is the best thing to do but in other circumstances, you might be able to salvage the company. It’s important that you don’t rush into things and you think about whether closure is really the right option for the business right now.
If you want to close the business for personal reasons, to spend more time with your family, for example, then it’s a little easier to make the decision. However, closing the business down completely isn’t the only option. You could bring somebody else on board to deal with the day to day running of the business so you get more free time, but you don’t have to shut the business down entirely. You could also consider selling the business to somebody else rather than simply closing it down. If the company is performing well but you just don’t want to run it anymore, selling it is usually a better option than closing it down.
A business that is in financial trouble is a bit more difficult because you need to decide when it’s time to call it quits and stop putting money into it. The first thing to consider is your own financial situation because if you haven’t got any more money to invest in the business and you already have debts, borrowing more isn’t a good idea. As well as the financial aspect, you need to consider whether there is more you could do to promote the business effectively and start bringing in more revenue. If you really feel that you’ve tried everything and there’s no money left, it’s probably best to admit defeat and close the business.
Work Out What Your Next Move Is
This is one of the hardest things about closing a business because your entire life has revolved around it for so long. When it comes time to leave it behind, a lot of people feel a bit lost and they don’t really know what they’re going to do next. It’s important that you think about this before you start the process of closing the business so you can move on to your next project. If you’re really struggling to find direction, you should consider speaking with a consulting agency that specializes in career transition and get their advice. They will be able to help you work out what your options are and what potential career options would suit you well. Then you can decide whether you want to go back to work or start another business.
Set A Closing Date
It’s important that you set a closing date for your business soon after you decide that you’re going to shut it down. Once you have a closing date in place, that gives you an idea of how long you have to do everything and it also means that you can give your employees some advance notice so they have the time to find another job. If you don’t set a closing date and inform people ahead of time, you’re going to leave them in a difficult position and you don’t want to end your relationship with your employees on a bad note like that.
Inform Your Employees
It’s a difficult conversation to have with your employees but you’ve got to do it at some point and it’s best to do it early. The more notice you give them, the easier the transition will be for them. You also need to officially end their employment and deal with the legal aspects of that. Pulling together the paperwork can take a while so you need to get started on that right away. When you inform your employees, it’s important that you make it clear that it’s not a reflection on them or their work and that closing the business down is just the best course of action.
Sell Off Your Assets
Now that the business is finally closed down and the employees have been informed, you can start the process of dismantling the company. You can make a good amount of money back by selling off the rest of your assets. Start with all of the remaining stock that you have and then go through the office and sell off any equipment that is worth money. If you own the office itself, you can make a good return selling that on as well or you could keep it and rent it out to other businesses to keep some money coming in.
As long as you plan ahead and start sorting these things out with plenty of time before the business close date, you should be able to shut the company down without too many issues.