Closing Your Business: The Emotional Side

Closing your business is one of the hardest jobs you will have to do as a business owner. Not only because there are a lot of things that need to be done, but because this is a very emotional time in his life: his business has failed. No matter how experienced you are, or how well you adapt to the adage: “Fail more to succeed” it is still an emotional moment.

There are many articles, guides, checklists, etc. available to help you with the mechanics of closing a deal, but very little is offered to help you handle the emotional stuff required. Hopefully the following will help:

1) Do not prolong the decision. If your business is in trouble, you must either fight back, implement a restructuring program, or go out of business. Someone once said that it’s important to “fail hard, fail fast,” good advice when your business is in serious trouble. Set a deadline and a “make or break” outcome goal, then give it all you’ve got. If you don’t reach your goal, close your business.

2) Sit down with your family. It’s not fair to keep family members in the dark about your business problems. Nothing can hurt a family more than having a process server knock on your door and serve your spouse with the foreclosure papers on your home. Family members can also be very helpful and supportive during this difficult time.

3) Seek outside advice. Hopefully you have a board or advisory group with which you can share your concerns. If there are experienced business people in the group, chances are they’ve experienced what you’re going through and can help guide you through the mechanics of closing a deal. They can also provide some emotional support.

4) Don’t use government money. Never use any tax withholding or tax deposits of any kind to keep your business running. You hold these taxes in trust and are personally responsible for them. Don’t make things worse by spending any of this money.

5) Develop a closure plan. There are dozens of things that need to be done in a short amount of time, and they always seem overwhelming. Make a written plan with dates and times to complete each task listed, then cross off each item as it is completed. You will find that this greatly reduces stress. Share this plan with your family and advisory group.

6) Try to make everyone complete. Ideally, your closing plan would show enough money to pay off all of your business debt, including any money from the investors involved. However, conditions are rarely ideal in these circumstances, so you’ll need to pay what you can to whom you can. This will be extremely important when you start your next business.

7) Your business failed, not you. This is the most important thing to keep in mind when closing your business. All the successful entrepreneurs you can name have had failures, big or small, during their careers, and that certainly didn’t make them them faults

8) Find the next one. Once an entrepreneur… always an entrepreneur. Even if this was his first business, now he is willing to go back to work for someone else. Even through all the stress and hard times, his entrepreneurial spirit will emerge strong. So keep an eye on your next business project, even while you’re finishing the current one.

There you have a basic list of things to do when closing a business, and each of them involves some aspect of the emotional stress that comes with closing your business. Nobody said it would be easy, but many people go through the process every day. If you have to, you can too.