When the worst has happened and your business is about to close after a year of Covid-19 shocks, it is important to realize that you are not alone. Entire sectors like non-essential retail and hospitality suffered an unprecedented loss of income in 2020. Many companies do not have the financial resilience necessary to survive. However, that knowledge can be some small consolation when you face the reality of closing down a company that you have worked so hard to build.
No matter how difficult it is, managing your exit efficiently is the first step to recovery and future success. You learned many lessons during this difficult time. So don’t underestimate how far you’ve actually progressed.
Closing a business that you’ve invested so much time and money in will never be easy, but there are a few things you should consider to make it as painless as possible for everyone.
Manage your financial exit
The first thing you need to do is consider how you are going to financially manage your exit, especially if you are already in debt. If you have cash reserves, work with your accountant to prioritize how they should be used. If you already know that you will not be able to meet your liabilities, there are several options available to you. However, it is best to seek professional advice to determine the most appropriate course of action. Companies like The Insolvency Experts can help you liquidate your business, walk you through the process, and help you recover in no time.
Being as open and transparent with your family as possible will protect you from the shock of loss of financial stability and a decrease in income. It is a mistake to protect them from the worst. As they experience the reality of the situation, they can be further hurt that you did not trust them to assist you. Of course, you will have to tailor the message to your children according to their age, but you will be surprised how well they adapt to whatever comes their way.
Manage your employees
One of the most difficult aspects of business closure for an owner is the human element. They are aware of the impact on the lives of their employees and the impact on entire families. They too will have gone through a long period of uncertainty realizing that closure was first possible, then likely, and finally inevitable.
The key to helping everyone during this time is clear and honest communication. People who were aware of the developing situation will already be thinking about what could happen in the future. Depending on the industry you are in, options for them may be limited.
As a business owner, you have to lead from scratch. Let them know as much as you can as early as possible so they can begin securing their future by looking for alternative employment or investigating the amount of government support available. Don’t make the mistake of saying nothing in the hope that somehow you can change the situation.
Prioritize the wellbeing of your employees in this phase. Be aware of the stress everyone is going through. Reports suggest that mental health problems have increased during the pandemic. So, pay attention to the signs and be ready to assist them if necessary. Changes in behavior, withdrawal, or unexpected outbursts – all of these can indicate that a person is having difficulty coping with them. So don’t blame them if they seem to have changed. Although you have to deal with tremendous pressures, you also have a duty of care for your employees. So make it clear to them that you will do whatever you can to support them. Your goal should be to ensure that everyone emerges from this crisis as unscathed as possible and that the relationships you may have built over the years remain unbroken.
Manage your customers
It’s also likely that you have built close relationships with customers and suppliers over time. So it won’t be easy to get the word out that your business won’t have to back them up for the foreseeable future. However, your network of contacts is a valuable asset. If you decide to start over, these can be an excellent support to get a new business off the ground.
Remember, most people understand the hurricane that hit many companies in 2020. All of them are likely to be affected and empathized in some way. One benefit of last year’s troubles is the increased sense of community we all feel. There is a sense of “there, but for the grace of God I am”.
While it is not clear what the future will look like, once you have established a positive relationship with your stakeholders, your openness and concern about the impact your closure may have on it will be respected. This can also help ensure that they will be ready to do business with you again in the future.
Plan for the future
Everything changes. This difficult time won’t last forever. Be realistic about your options in the short term – how will you and your family survive financially? What are the short to medium-term prospects for your industry? How can you use your skills and experience to generate a sustainable income?
Equally important, however, is your emotional recovery from the experience of a business closure. It is natural to go through a period of grief for what you have lost. Be patient with yourself and give yourself time to let your emotions emerge. It may take you some time to get back on an even keel, but this is important before you can move forward.
Finally, don’t lose sight of the energy and drive that originally created your business. That was your greatest asset, and it’s still up to you to make the most of it. So when you are ready, start planning how you can thrive and grow again over the coming months and years.