Wondering if You Should Close or Sell the Business? Read This
If your business isn’t as strong as it should be, you may be beginning to wonder if you’ve reached the end of the road. For most business owners, it means one big question – should you close or sell your business? While it may seem like closing is the only real option because of the way your business is structured or the industry itself, the simple reality is that most companies have some value for a buyer.
Why You Should At Least Consider a Sale
There are many reasons to consider a sale, even if you think your business isn’t really that valuable. For example, if you run a very small business without extensive assets or equipment, you may not think that selling is really an option. That’s just not true these days, though. These kinds of services are absolutely in demand. Even businesses that are declining in profits are valuable to other buyers. Whether for their intellectual property, their customer list, or as a write-off for another business, companies that aren’t doing well can be quite valuable.
Should you decide to sell your business, work with a business broker to value your company, then begin marketing it to help play up its strengths. Once you’ve found a buyer, you simply need to draw up a sales agreement and move forward.
Should You Close or Sell Your Business? If you Feel Closing Is the Right Choice, This is How
For some businesses, though, closing really does seem like the only choice moving forward. If you’re a sole proprietor, you can make the decision on your own, but if you’re part of a partnership, the two of you will have to agree. You’ll need to follow your articles of organization and document the decision in writing. From there, you will need to legally dissolve the company by filing dissolution documents. Your state’s website should have additional information on the process. You’ll also need to cancel your business name and any registrations or permits you have. If you have employees, you’ll need to remain in compliance with both employment and labor laws throughout the process. Look to the Department of Labor to learn more about how to pay employees after you’ve closed. Your state may have additional requirements on the topic. Finally, resolve any financial obligations you may have. You’ll have final income tax returns you need to file and you must cancel your Employer Identification Number. Keep all of the records on hand for at least seven years.
Making the Choice
If you’re wondering about closing or selling your business, the next best thing you can do is chat with a trusted business advisor to determine the next right plan of action. Contact us today if you need an experienced partner to help walk you through these tough decisions.