Small Business Closing....What to Do

Recently, I was asked what to do about closing a small business. Here's my answer. Hopefully, none of you will have to experience this....but if you do, here's some information to get you started.

Hello Jenn:

First of all, I am sorry that you have to close your business. Owning and operating a business is tough....even in the best of times.

You may consider hiring a business broker to help you sell what is left of your business. But before doing that, please ask yourself the following questions: Did a bank provide financing to startup your business? If so, the bank will most likely have a "first lien position" on all your assets. So when you sell those assets, the funds have to go to the bank first to pay down any of the debt. If not, then you are free to sell those assets. What assets do you have to sell? Inventory? Furniture, equipment? What is the market value (i.e. what do you think it would sell for)?

Are you currently in a leased space? If so, make sure you talk with your landlord and find out what his/her requirements for you will be. In other words, will he/she let you sub-lease the space? Or will they let you out of the lease right now? What does your lease agreement say? This is where you may want an attorney's advice. Or a good business broker or commercial leasing agent can provide help here too.

I wish you the best. And remember don't let this get you down. Every successful business owner has experienced something like this. It is what you do about it that matters. In other words, pick yourself up, dust yourself off, make a new plan and get out there and start again.

Sincerely,

Sheila Spangler

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