Exit strategist Denise Hall from Business Brokers lays out the steps to take when the time comes to admit defeat.
1. ELIMINATE DOUBT
Before closing doors, be really clear that it’s what you want or need to do. Although your best friend is your normal confidant, do they have relevant knowledge to guide you? If not, talk to someone who’s had actual experience in selling or closing a business to ensure nothing else can be done to save it.
2. SET A D-DAY
Setting a date to officially close your business will help you to properly plan your business’ closure, and schedule when to tell suppliers, employees and customers. It will also give you peace of mind – there is a full stop approaching.
3. CARE FOR YOUR CREW
Breaking bad news to employees is always a difficult process. That said, if it’s market related, most will already know what’s going on anyway. I advise breaking the news face to face, but you’re also required by law to give them official notice in writing. Even if a business is shutting, you must pay staff their contractual notice period and any leave owed.
4. TELL YOUR CUSTOMERS
Making an announcement to customers – either via social media, an email to your database or an interview placed in the media – is not only courteous, but also makes business sense, as they may wish to stock up on your product before it goes. You can maximise your profits in the home stretch by holding a closing-down sale.
5. SELL BUSINESS ASSETS
Even though the business will no longer exist, you’ll still have assets to get rid of. These include outstanding stock, equipment and machinery, business vehicles, furniture, intellectual properties such as trademarks, licenses and any domain names. A business broker can do this on your behalf and will take a percentage of the sale of the items.
6. TAX AND LEGAL MATTERS
Now down to the paperwork. If you’re in Australia, you’ll need to deregister your company and business name through the Australian Securities and Investments Commission (ASIC) and also cancel your Australian Business Number via the Australian Business Register within 21 days of closure. On top of this, check any insurance requirements of your company, such as run-off cover (where you’re insured for any legal claims that are made after you close your business).
7. SAVE, SAVE, SAVE
It’s tempting to want to chuck out every reminder of your past, but even after closure, you’re still required to keep all business, customer and employee records in most companies (usually for a minimum of five years in Australia, although it depends on the industry you were a part of). Records containing sensitive information will also need to be kept and disposed of (in Australia, this must be done in a way that’s in line with the Privacy Act 1988).
8. SHUT SOCIAL MEDIA
You have two options in regards to social media relating to your old business. The first is to shut them down completely (the common protocol is to do this the day you shut your website and cease trading). Alternatively, if you don’t want to lose all your followers, then post a message explaining you’re taking a break, and then if you do launch a new business, you can change the Twitter or Facebook name so that it’s relevant to your new start-up.
9. LOOK AFTER YOURSELF
What’s paramount in the activities of closing a business is the humanness of the experience. This is not an easy time, so allow yourself moments to grieve and don’t feel it’s necessary to be a robot. There will be tears, if only from you as the business owner, and that’s okay. It shows that you were dedicated, and that is never a bad quality in a leader.