When Closing A Business... Here's Some Advice
Closing a business is hard for the failed business owner. Maybe you said, “Failure is not an option,” when you started your business. (I said that too.) And then stuff happened. One thing led to another, and suddenly you're in deep trouble, looking for a way out
Exit Strategy For Closing Your Business
When starting your business, you're supposed to have an exit strategy. An exit strategy is a planned way to close a business without doing any damage to your own personal finances. Smart entrepreneurs don't risk more of their own money than they have to. It may be too late for that advice.
If you've been successful as an entrepreneur, you've built a business with employees, assets, cash flow, etc. For someone like you, closing your business by selling it is the most common exit strategy.
If you're a freelancer or sole-proprietor, or own a very-small business (1-3 employees), you probably don't have a way to sell your business. That's because really you are the business. If your business has “tangible assets,” (stuff) you maybe can sell them. Sometimes you can sell your businesses “good-will” and your business name. Otherwise, you'll just stop doing business.
Click here for a list of steps for closing a business.
Is Your Business In Trouble?
You're already having problems with your business. If you're in over your head, you first need to admit that there's a problem. Your instinct is probably to deny that there's trouble, or to clam-up and not talk about problems.
What you really need is a fresh perspective. You're too close to your business and probably can't see what's happening objectively. You need to get a glimpse of how your business REALLY looks. Talk to someone. Get advice.
- Look for help at your local SBDC or SCORE office if you have one. This help could cost you money but maybe it will prevent your closing A business. Either way, it's money well spent.
- Your business networking group may have valuable advice for you from their own experiences. (Networking is one of the most under-used tools of the very-small and micro business owner that I can think of.) Of course, you'll have to take their advice “with a grain of salt.”
- Find a lawyer that has experience in your business. If you need legal advice, do it now, before things get worse. I can't offer any legal advice here cause I'm not a lawyer.
Closing A Business Because Of Money Problems
Bankruptcy. The very word is ominous, isn't it? It's not something you ever dreamed you'd need to think about for yourself. If you're in deep trouble, you need to find a lawyer fast. Don't try to do it yourself.
Everyone will want to give you advice now. (Except me- I'm not a lawyer.) There's all kinds of myths and half-truths about bankruptcy. The laws change often. If you're closing a business, find out how to do it the right way. Protect yourself as much as possible. You do have rights as well as responsibilities. Find out about them. Again, contact a lawyer. It's money well spent.
Closing a business because of your business failure may be a very unhappy time. Try to think of it as part of your business education. Use what you're learning now in your next business. You're much more likely to succeed with next business!
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