According to the Small Business Association, one out of every three startups close its doors within two years. Only about half of startups last more than five years. The point of mentioning this isn’t to scare hopeful entrepreneurs, but to point out that not all businesses lead to a prosperous career. The possibility of winding down a business is very real. You may need to consult with a business lawyer in order to do it correctly
What Does It Mean to Wind Down a Business?
In business terminology, “winding down” essentially refers to the legal processes and steps that must be taken when closing a business. There’s so much more to it than just posting a “going out of business” sign on your door and selling everything.
The exact process differs depending on a number of factors, such as if you filed for bankruptcy or if you have any outstanding accounts receivables. For the most part, though, here are a few steps that almost every business will have to take during a wind down:
Liquidation — Liquidate as many of your assets as possible. Get rid of all your inventory by holding a going-out-of-business sale. Liquidation also involves selling company equipment, and even the building and property if you’re the owner. A real estate lawyer can help with the last point. [Read more…]