Over the years I’ve seen so many Small Businesses sell out for much less than…
What to Do When the Curtain Comes Down on Your Business for the Last Time
In stark contrast to the excitement of starting a new venture are the mixed emotions of closing one down.
Sometimes the decision is made for us, and other times it just makes sense. But the decision isn’t always easy, and some people will press on with a business in the hope that it will turn a corner, despite all evidence to the contrary.
I’ve been a part of 3 project closures; all under different circumstances.
Closure 1 – I started my first business when I was 18, but after three years of very hard work it was no longer viable due to changes in printing processes, graphic design and the new digital world of desktop publishing. This rapid change in technology converted a lot of effort into redundancy.
Closure 2 – This was a charity who met its goals. It could have morphed its purposes or expanded its goals, but each of the Directors circumstances had changed since the charity was established, so it was mutually agreed to pass on the processes we’d developed to likeminded charitable groups. That enabled them to either maintain or expand each project as their resources allowed.
Closure 3 – This was the most painful. In 2013, I expanded my comfy home office into a bigger than Ben Hur public office space that incorporated a range of services for young people under the one roof. After only 18 months I came limping back to my home office, and three years later I’m still managing the financial fallout.
So, I know first-hand that ventures close for a range of reasons. Some closures are expected, and others aren’t. Some businesses are sold for profit, developed into franchises, meet their goals, or just fizzle out unceremoniously. Others end amidst financial disaster or following the death or serious injury of a key player.
Whatever the reason, here are a few points to help bring the curtain down for that final time:
- Ensure that all liabilities including debts, taxes, staff entitlements, services contracts (e.g. phones or software) and leases (e.g. cars, premises or equipment) are paid out before the remaining funds are disbursed.
- Sole Traders – Cease trading and inform the Australian Taxation Office that your Australian Business Number (ABN) is no longer active.
- Partnerships – See what your partnership agreement says about closing your business. Do both partners agree on the terms of the closure? Is one partner able to buy out the other?
- Charities – See what your Articles of Association or Constitution says about winding up your charity and notify the Australian Charities and Not-for-profits Commission (ACNC).
- Companies – Check your constitution for any special requirements and complete the appropriate notification with the Australian Securities and Investment Commission (ASIC).
Regardless of the circumstances for your business closure, something can always be learned.
In my case:
Closure 1 – I learned to keep an eye on changing technology and to consider its potential impact on my business.
Closure 2 – I learned to appreciate that no matter how good your intentions, enthusiasm wanes, personal priorities change and new blood on charitable boards is harder to find that one might expect.
Closure 3 – Too many to list! Three years on and I’m still processing this closure. I’ve already learned so much but every now and then I revisit certain aspects and find a new gem.
Once you’ve gone through the practical steps of closing down or winding up, allow time to reflect on ‘what happened’ and see what you can take from the experience that will improve your next one.
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