Closing a Business for Beginners
Get the info you need for closing a businessClosing a business, for beginners -- for anyone -- can be an overwhelming experience. Most small business owner "beginners" are seasoned pros who never thought they'd be closing a business. You may be disappointed that you're closing a business, but if it has to be done, it has to be done; putting it off will only make matters worse.
Common questions you may be asking yourself include: What steps do I need to take? How do I tell my customers? What do I do with all these unsold products? While closing a business isn't a walk in the park, you can make it a little less painful and a lot less confusing. Consider some tips for closing a business:
1. Choose whether you want to go out quietly or with a bang. For some companies, posting a small sign indicating your closure is all that's needed.
2. Make sure to take care of any legalities involved in closing a business. Mind your step regarding federal, state and local laws.
3. Sell off your assets. This includes not only inventory, but also capital equipment that you no longer need since you're closing a business.
Let your customers know you're closing a business
Take care of closing a business from a legal standpointDon't overlook your legal loose ends. This includes paying final wages and filing W2s or 1099s, making official corporate notice of your closing (unless you're a sole proprietor), paying shareholders if you have them and arranging for discontinuation of benefit plans like pensions and insurance. Don't forget to close any utility accounts, like Internet service, as well as cancel any services, like lawn care.
Internal Revenue Service to see which actions you need to take. There is also a helpful checklist at HowToSellaBusiness.org. Check with your local Small Business Administration to find out about any rules your state or municipality imposes upon businesses that are closing.
Liquidate inventory, equipment and fixtures before closing a businessGetting rid of your inventory can not only turn some profits but save you the headache of putting things in storage. One tactic is to start by selling products for 10% off the original price and slowly increase the discount as time goes on. You could also have a big inventory liquidation blowout to try to move all the products in a short period of time. Make sure to advertise any sales you've having, as consumers won't come take advantage of your discounts if they don't know what you're offering.
- For the future, you can take your experience with operating and closing a business and learn from it: There are plenty of successful people who once looked into closing a business for beginners.
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