Are you thinking about closing your retail business? You’re not alone. 2020 has ushered in uncertainty for the entire world, and the shocking effects of COVID-19’s devastating impact has catapulted our economy into distress, and non-essential businesses around the country had to temporarily close their doors—but for some, temporary restrictions have snowballed into fertile grounds for bankruptcy and permanent closure.
Many small businesses are struggling to keep their doors open and might decide this Christmas season may be their last. If you are weighing this decision for your own business, it’s crucial not to rush to a permanent close. Whether the decision is because of finances, stress, retirement, or lost your passion; closing your doors permanently can be a complicated and an emotional process. What was once the source of your investments, dreams, and goals in life has finally seen past its best days. However, there is a way to overcome these emotions over the impact and uncertainty of closing your business. Brush yourself off, and commit to closing the company orderly, completely, and exiting your business on a high note.
Should you try to tackle the paperwork and detail-heavy process in a hurry, you may very well end up with years of litigious negotiations, debts, and other loose ends that should’ve been tied up before you locked up the building one last time.
Closing Your Retail Business: Top 10 To-Do List
If you are not sure where to start, we’ll get you on the right path. Here are the top 10 things to do when you are closing up shop permanently:
1) Accounts Receivable – attempt to collect outstanding debts from any costumers. If any long-overdue accounts receivables are identified, ensure to double down your efforts on getting those resolved as well.
2) Accounts Payable – Notify all of your creditors, including suppliers, lenders, and service providers, of your intent to close. This step is critical as you gain an advantage by doing this properly, which gives creditors a specific timeframe during which they can ask for a debt.
3) Notify Landlord or Real Estate Agent – When your lease is up, give proper notice. If you plan on breaking the terms of your lease and leaving early, start sharing those plans with your landlord to positively tie up these ends. If you own the building, it is time to find a commercial real estate agent to get it ready for putting it on the market.
4) Employees – Your employees deserve to get a timely head’s up. They will need to jump back into the job market and find a new job. Giving them a notice and paying them on time allows them to prepare for the expected closure date and gives them time to find alternate work.
5) Inventory – Try to get rid of as much inventory as possible before closure. Entice customers by holding clearance sales, discounts, and running a social media marketing campaign advertising your super sale.
6) Liquidate assets – Look to sell shelves, racks, counters, and showcases. Many places could make use of those items. Anything that you cannot sell, you should donate before bringing it to the dump.
7) Cancel state or local permits and licenses – Now that you no longer need them to stay in business, cancel your seller’s permit, assumed business name, and business license.
8) Taxes – Make sure to file your final income tax returns, and check the designated box that states this is your final return. If you sell any business assets or sell the bulk of your assets to a single buyer, file an IRS Form 4797 and Form 8594, respectively.
9) Officially Dissolve Business or Corporation – In order to dissolve your partnership, LLC, or corporation, file the “certificate of dissolution” paperwork, though you may need to first file for tax clearance.
10) Bank Accounts – Close or move assets from business accounts, which can be redistributed among yourself and other remaining owners.
Why Choose G.A. Wright Sales
Are you overwhelmed with the long to-do list that comes with closing your retail business? Let G.A. Wright help you close your business and make the most of your inventory. With our care and expertise, you don’t need to worry about the nitty-gritty, relieving you from the stress of closing your business because we will guide you through the entire process.