When you started your business, you did not do it with this day in mind. That day is here nonetheless. The business is no longer viable and you have made the decision to close it. Do not fret, you will be back in the game soon enough! However, you must first deal with this steaming pile of failed business. Doing it the right way makes all the difference if you intend to start over at some point.
Step 1 – What is the Steaming Pile of Failed Business Worth?
Take stock of every asset your business still owns. Everything is worth something. If you are closing the business, it is probably because the plan is not working and you may have accrued some debt while trying to save it. The remaining assets will help offset any liabilities you still have.
Step 2 – Make the Announcement
While this step is very difficult, it is better than firing everyone one day as they walk in the door. Notify employees of the date their employment will end, contact your customers directly, inform your utility companies, landlord, and anyone else that will be affected by the loss of your business. While you do not HAVE to necessarily do some of these things, it could benefit you to leave bridges un-scorched so when you raise from the ashes one day you will have friends.
Step 3 – Haggle and Settle
Liquidate your assets. This money will be used to settle up with your creditors and anyone else you still owe. You may be able to negotiate to reduce the value of liabilities you still have. If you have creditors to worry about, they may be thrilled to talk to you about ways you can pay a lesser amount as opposed to filing for bankruptcy which leaves them with empty-handed.
Step 4 – Pay the Man
Meet with your accountant and file any and all tax returns. This includes federal and state returns. While this can be stressful, you should not put it off because you can incur fees and interest on unfiled returns.
Step 5 – Closing Time
- Bank accounts – At this point, your bank accounts are most likely bruised and limping. It can be expensive to keep them open because most business checking accounts incur fees if the minimum balance is not maintained.
- Your business – This is the end of the road. Time to move on and come up with the next great idea!
Closing a business can be very complex and overwhelming. Do yourself a favor and obtain the services of an experienced business attorney in Broward County, Florida. Elias Dsouza has been working with business owners for over a decade and has the skills needed to steer you safely onto your next venture.