How to close a small business?
Closing your small business should be much easier than the time and effort it took to get it started. However, whatever your reasons are for closing down your business, there are a few procedures you will need to follow and things you will need to take care off to officially close the doors for good.
Get Professional Help When Closing Your Small Business
There is a lot that you can do on your own when closing your small business, however it is important to get the right legal and tax advice so that you can officially and legally close the doors without future problems. If you are not familiar with how to close a small business, you may want to consult with an accountant and lawyer to get some advice. They can give you the information you need to legally close your small business. They are also familiar with the local laws in your area.
Here are some things you will need to do in order to shut your business down without future problems:
- Dissolve your business with all government agencies
- Cancel all permits, licenses, and fictitious business names
- File an annual return for the year you go out of business
- File the final employment tax returns
- Pay off any outstanding federal taxes
- Pay off all outstanding debts
- Have a going out of business sale
- Fulfill all contractual obligations
- Collect customer payments in full
- Notify your staff, suppliers, landlord, creditors, and customers
This is only a short checklist; however making your own checklist and setting a closing date will help you to move forward, be more organized, and take action step by step. Making a checklist and checking things off as they are completed will help you get closer to your goal of closing down your small business at the date set.
Reasons Small Business Fail Or Close Down
- It’s not making it financially
- You no longer have the time or will to manage it anymore
- You're moving on to something else
- Poor planning or no planning at all
- Limited financing
- No solid customer base
- Lacks business skills
Keep All Business Records For A Minimum Of Two Years
Even if your business is ending make sure you keep records and important paperwork at least for a few years before tossing them. You never know when you might need to refer back to your documents for information, so keep them organized and close at hand so you can get to the information quickly if you need to. Also, don’t burn any bridges even if you are going out of business because you never know what the future holds.
