8 Steps on How to Close a Small Business

Any business is a dream come true for anyone, hence when the business closes down so does your dream. Well, not necessarily as you can always open one. However, before you can do that and open other businesses, you first need to close your present business properly.

It is not enough that you inform everyone or you post a sign outside your office door and throw away the key. Maybe it is what you want, but sad to say it involves more than just shutting the door permanently, as there are steps on how to close a small business. These steps are vital to avoid future problems.

How to Close a Small Business

Bear in mind that when you started your business you became liable not just to your creditors but to the government as well. Closing a business is the same as opening a business, sometimes it is even more complicated especially if you have creditors waiting to be paid. So to lend a hand, here are 8 steps on how to close a small business;

1. Inform – First in the agenda is to inform your employees about the situation so they can prepare themselves and search for a new job. Besides it is just right that you inform them  of the  current situation, most especially if they have been with you since the start of your business.

2. Notify – advice all your creditors on your impeding closure, if possible give them a timetable or the exact date so they can adjust as well. If you have goods in stock, then make provisions to sell them off, it is better to make preparations for that, to avoid last minute problems.

3. Inventory – Make all the necessary inventory of all your equipment and create a list so it will be easier to sell them slowly, you can keep the ones you are still using before the closing date. But you can sell the items you no longer need.

4. Accounts – It is advisable to settle all unpaid accounts or make arrangements with your supplier, for the immediate closure of your accounts or on the date you agreed with them. The most important thing is to deal with them prior to the actual date of closing.

5. Recommendations – If possible, why don’t you assist your employees to another job and if not give them a good recommendation to help them with their job hunting process.

6. Closing Procedures – One of the most imperative things you should do and must never be forgotten is to get all the necessary forms and information that you will need to sort your annual tax payment for the year/months that your business operated. This is very important, the last thing you will need is for the government to run after you with unpaid taxes.

7. File the Forms – After you have sorted the mundane task of closing your business, then it is time to notify your state and file the necessary forms to every department of the government that you ought to inform. This is another crucial step on how to close a small business, since it can affect your future if you do not do this right.

8. Pay your Taxes- The last and final thing in the list is to pay any outstanding tax and other fees for closing your small business. Make certain that you have officially dissolved the company before finally saying good bye to your previous small business.

8 Steps on How to Close a Small Business

Chukwuemeka Fred Jnr. Agbata

I am CFA [Conditioned for Accomplishments], read more here.  My passion is to Help People become Conditioned for Accomplishments! Use the search button above to search our post archives for loads of valuable articles.

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