As a business owner, you must make the right decisions for continued success. One aspect of this is knowing when to close or sell your business when the time is appropriate.
According to the Small Business Association, there are a few different methods for dissolving a business. Understanding these options ensures you make the best decisions for your needs.
Transferring ownership
If you wish to keep your business intact but are no longer interested in owning it, you have a few options. You can sell it to another party (more on that below), or you can establish a lease agreement. This usually occurs when you must take an extended break from the business, but ultimately choose to retain ownership over it. You can design the lease to cover a specific period of time, at which point you will assume ownership again and the lessee will move onto a new venture.
Closing your business
Once you make the decision to close, you must file the proper dissolution documents for your type of business. From there, you should cancel your trade name, as well as any licenses or permits you currently have. Next, make sure you pay any remaining taxes or other forms of debt. You must also ensure your staff is sufficiently compensated for their work.
Selling your business
In order to sell your business to another party, you must have a good understanding of its value. This requires finding the right valuation method, such as the current market value. You may also value your business based on your current revenue or the number of assets in its name. A formal appraisal is best for the most accurate information.
No matter which option you ultimately choose, you must have a proper plan in place to ensure a successful process. By looking at the bigger picture, you can make a decision that meets your needs and ensures a bright financial future.
