There are lots of reasons you might want to wrap up operations at your home business, whether you’re moving onto a new project or retirement beckons.
Whatever the case, shutting up shop is not something you can do in a flash, or without proper preparations. There are several steps to take, so here’s what you need to do to complete this process without a hitch or hiccup.
Letting your clients know
Informing the people who’ve used your services over the years, whether they’re current customers or former clients, is important when the time to close your business for good arrives.
This is partly a courtesy, but also comes down to developing communication skills and learning lessons that can be transferred over and applied to any future professional endeavors.
For instance, if you’re looking to maintain a business network and bring it with you as you pursue new avenues, having a contact book of clients you can turn to will open many doors.
Following proper procedures
Depending on how your business was formed, there will be different obligations you’ll need to adhere to, even if you intend to sell it to a third party.
For instance, if you’ve set up the company as an LLC, you’ll need to dissolve it with the correct documentation, filed with the authorities that govern small businesses in your state.
Also, if the business is a partnership, you’ll have to get the other owners to agree to the closure, and adhere to whatever procedures you set down at the start.
Deciding how best to sell your business’ assets
Pulling the plug on a home business might leave you with assets which need to be disposed of, such as inventory, machinery and so forth.
Finding out about upcoming online equipment auctions and having your assets listed for sale at such an event is a quick and easy way to deal with this issue.
You could also use a liquidation service to recoup any value that’s left in your tangible assets, although this won’t necessarily result in getting the best deal.
Putting your finances in order
If you’ve run a home business for any amount of time, you will have become accustomed to things like filing tax returns. You’ll need to do this as your company closes its figurative doors. Be sure to get in touch with the tax authorities at both a state and federal level.
There’s extensive official advice on this aspect of the process available, so go through this with a fine toothed comb in order to avoid making any mistakes.
Holding onto your paperwork
Just because your home based business is no more, that doesn’t mean you can simply shred all of your physical documents and delete any of your digital files that were generated over the course of its lifespan.
In many cases you’ll be expected to keep these financial records for a minimum period so that they can be reviewed in an audit as necessary. This period can extend from between three years right up to seven years. Be prepared to set aside space on your property, or on your hard drive to avoid any potential issues in the future.
Getting legal advice
For peace of mind as much as anything else, it’s worth speaking with an experienced lawyer when closing a business, no matter the nature of your operations.
That way you’ll know whether you’ve got any other obligations to meet, and the whole process will be much smoother.
Final thoughts
Closing down a business is hard work. To do it properly, you need to set aside sufficient time and take care to handle every aspect thoroughly.