There are many potential reasons for deciding to step away from your business. Whether you are selling it to a new owner, dissolving it due to lack of profit, or simply closing up shop in order to retire, the end of your company may feel bittersweet. While dealing with the complicated emotions of leaving your venture, you also have to deal with all of the logistics of discontinuing your products or services or passing them along to someone else. Following the seven steps below will help you to tie off any loose ends and close your business with peace of mind.
Collect any outstanding payments
You should begin collecting outstanding overdue payments from customers at least a few months before you close your doors. If you are a service-based business, you’ll want to verify you’ve invoiced clients for all work completed.
Let your customers know (and make the transition easy for them)
You may choose to call or email each of your clients individually or simply put ads out in the local papers for a “going out of business” sale. According to Accounting Web, you should check any unfinished contracts for cancellation provisions. If you have ongoing clients, you may want to introduce them to a suitable replacement provider for the services you performed. If you are selling your business, you will want to make an introduction between your clients and the new business owner.
Sell your assets
If your business is permanently ceasing operation, you will want to sell any remaining physical assets. This includes everything from your products to the fixtures and furniture in any brick-and-mortar locations.
Get your finances in order
Get final bills for business expenses, including credit cards, equipment payments, health insurance, and rental space. Discontinue any automatic recurring payments and let your financial institution know that you are closing up shop.
Tell Your Employees
If you have employees, give them as much advance notice as possible that you will be winding down your operations. Make sure they are paid any wages owed, including reimbursements. Consult any labor laws applicable to your business to learn more about the formal process of laying off employees.
Take Care of Your Taxes
Pay your Federal and State payroll tax as well as any sales tax you’ve collected. When you have finished making payments, file the final tax return for your business and your employer and sales tax returns.
Pay Out Your Profits
Hopefully at the end of this process, you will have profits to pay out to any owners or shareholders of your business.
While winding down your company may be bittersweet, the process doesn’t have to be grueling. We hope that the steps above make the experience brisk and simple.