For the fourth and final part in the series of closing your business – it’s time to move on.

We’ve gone over three parts so far – what to expect when closing your business, the business closing process, and the emotional stages of closing a business. Now it’s time to get on with your life.

Now that your business is closed, you probably want nothing to do with work or having a job. You just want to crawl under a rock and hide from everyone. No one understands what you have been through, and the loss you have suffered. 

So – go ahead! Take some time off. Try not to think about your business – there will be time to go over what happened and to learn from it.

If you are anything like the rest of the world, though, you are probably low on money and can’t afford to take too much time off. I sat around for two months after I closed my shop. Luckily it was during the summer, so I sat around at the neighborhood pool with my kids. We really had to cut back on our spending, since my wife’s income could barely support us.

So, assuming you are not independently wealthy, you will eventually have to start making money. I wanted nothing to do with starting another business, nor did I have the money to do so anyway.

So I started looking for a real job. You should too.

I was at first concerned with the reactions I might get having “worked for myself” on my resume. But, if you word it correctly, it is actually a great asset. I prefer working for a small company, and by then, I knew the ins and outs of running a small company, I could wear many hats if I needed to, and I was comfortable selling – which basically is what you will be doing – selling yourself and your skills.

Working for “the man” again, on one hand, is really frustrating. Back with company politics, no one wanting to take responsibility, simple actions taking weeks and countless meeting to get done, and having to answer to a boss who does not really know what is going on.

On the other hand, there is not really any stress working for someone else. A steady paycheck is great. Letting other people worry about payroll, paying the bills, ordering parts – whatever it is that is outside your job function – you don’t have to do. It is a really nice break from having to do it all. Still frustrating, but it’s a nice break. And you definitely need one.

And – you never know – you might just find an opportunity waiting for you there.

Just because you had to close one business doesn’t mean you can’t start another somewhere down the road.

So get a real job, at least until you can catch up on some bills and save some money. Think about your business, and what happened. Remember what you did right, and what you did wrong. You can probably think back and see the warning signs that you ignored the first time around. Don’t think of having to close your business as a ‘failure’ – realize it for what it is – a great learning experience.

Most importantly – don’t forget your dreams.

Now that we’ve got the legal part of a business closing out of the way (see Part 2), we can move on to a more interesting, and relevant topic – the emotional part of a business loss.

Having to close a business, especially in the face of a bankruptcy, is extremely stressful.

What I realized: It may be lonely at the top, but it’s lonelier at the bottom. 

After all was said and done, I looked back at what I was going through during the time while I was closing my business. Being a typical male, it’s not that easy to put my emotions into perspective, but I managed. I was surprised how closely my stages of emotions matched the Kuber-Ross model of the Five Stages of Grief. I’ll go through each, and how it matched my situation, and what you can expect in your situation if you are in the process of losing a business.

Stage 1: Denial

This happens a bit before you actually have to close your business, but deep down you know things are on the way downhill. (Read the E-Myth book, they go through a great scenario about this). This is an important stage for the optimistic entrepreneur. I remember going over my financial statements, how in debt we were, and lack of profit coming in. I was convinced that I could sell some good projects and get us back on track. In reality, we were so far under it would have taken a landfall of high-profit projects to save us. That’s not to say it was not possible, it just did not happen for us. But during the denial stage, don’t give up hope because you think the end is inevitable. On the other hand, you have to consider the damage it would cause to your personal financial situation if you try to stretch out your attempt to save your business.

Stage 2: Anger

Anger. The damaging part of the process that affects the people around you. For me, it was against my partner and a couple of employees. I felt like I was the only one who had the heart and determination to keep the dream going, and they were only in it for a paycheck. That is when it hits that, in reality, employees are only working for you for a paycheck. You have probably went months, if not years, with barely a paycheck, if at all, and you were willing to put in the sacrifice for your dream. (As an aside, my lawyer told me that one of the biggest mistakes a business owner makes is not paying him/herself). I would snap at everyone for not working hard enough, especially my partner, who was supposed to be in it for the long haul. But you have to remember that they have families and responsibilities, and they don’t have the emotional investment in your dream that you do.

You will most likely be angry at yourself as well. But realize that you have tried your hardest, and sometimes there are factors beyond your control that led your business to its demise.

Stage 3: Bargaining

Yes, the bargaining stage. When we get so caught up with saving the business that we promise anything. In many cases, this gets us in a slightly worse situation than we were to begin with. First is getting more money to help you to stay afloat. I went to bank after bank with no luck. I actually did manage to secure an SBA line of credit to keep going for another month. I am still paying that off. (Note – read the fine print about being personally liable).

I also went around to all my customers looking for projects. This is a tough one, because you do not want your customers to know you are in dire straights. By this time all of your vendors know something is wrong, and current customers that you have delivery problems with know something is wrong. Word might be getting around that you are in trouble.

I was out selling harder than ever during this time, but, more often than not, potential customers know when you are desperate. And the business I was in had a six to nine month sales cycle just to get a project. I knew we would not last that long, but I still believed in my dream, and tried.

Stage 4: Depression

This is the stage that really hurts, and that no one but you can go through. For some people, like me, it takes quite a while to get through. Two years for me, in fact. I spend the summer sitting around not knowing what to do, waiting to hear what the lawyers were going to work out, thinking about how I let down my employees who were following me and my dream, my customers whom I made promises to, my vendors whom I owed hundreds of thousands of dollars to, and other small business that I worked with. There were a couple of vendors I owed money to that almost went out of business because of me.

Everyone goes through this during the closing of their dream. Failure was the word for me. I failed. I failed my family, friends, and myself.

Talk to people about what you are feeling. Talk to other business owners. Believe it or not, losing a business happens to more small business owners than you might think. You are not alone, but in a sense, you are. It is very hard. Just remember that you were not the only reason things went bad. Think about it. Learn from it. Make the best from it. And – most importantly – you will move on. Maybe one day to do it all again (although I am sure it feels like the entrepreneurial spirit has been beaten out of you).

Again, if you need to talk about it, call me. I understand.

Stage 5: Acceptance

I saw my business as my creation, something I “gave birth” to, put in my sweat, blood, tears, money, time, heart, and soul into. I don’t think I would call it a fault to say that most entrepreneurs are emotionally tied to their company – in fact, to be successful, you have to have that level of passion and dedication to what you are trying to create in order for it to succeed.

After a while, you accept what happened. You will realize that ‘failure’ is really the wrong term to use for having to close your business. When you are able to look back at what happened without being emotional about it, you will recall the warning signs, remember what was wrong and right, and you will realize that you have learned. And you learned it the good old fashioned way – by going through it firsthand. That is something that no one can teach.

And, in the end, you will realize that having to close your business was, in and of itself, a good learning experience. Next time you go at it, you will know what to expect.

I’m not saying it will be easy after you accept what has happened, and make it through the stages of grief – I will be paying off business bills for the next ten years – but you will know that next time, if and when you are ready – it will be easier. You’ve gone through what 99% of sane people would never risk.

You have gone through it – and survived.

I am going to start the series of how to manage a business failure – or business closing – at the beginning.

The legal part.

There are many other parts of closing a business that I will be discussing, but starting with the legal aspect is not only extremely important, but it also gets a bit of stress off of your shoulders, organizes the mess, and officially starts the process.

It is also one of the emotionally hardest parts.

Your business is your life! You raised it from nothing, like a baby, and put all your heart, soul, blood, and, unfortunately, money into it. That is why it is so tough – and justifiably so. But, it needs to be done. It doesn’t necessarily mean that there isn’t hope to keep your business going, but you need to do it to protect yourself and your family. 

So, to start, open the yellow pages or get on the internet. Find a local lawyer that has experience with business bankruptcy. Call them up, and set up a meeting.

Extra note: You will most likely be dealing more often with the lawyers paralegal, so get to know him / her. You are paying them to help you, so don’t feel bad if you need to call them every day. I called my lawyer all the time with questions. No question is to dumb. They are good at what they do – that is their job. And, it’s about time someone was there to help you for a change.

Note – I am not advising you to go bankrupt – just that you need to speak to a lawyer to review your options.

I think I paid about 2,000 dollars to the lawyer. I remember saying “if I had $2,000, I wouldn’t be going bankrupt!” True, but that’s what it takes. Whether you have the money or not, you have to find it. Most lawyers will take partial payments spread over a few months.

For the first meeting, you don’t really need anything except your story. Go to the meeting, meet with the lawyer, and lay it all out to him. Don’t hide anything – they are there for you, and are there to protect you. You will fill out some paperwork, and they will go over your companies financial situation. Give them a good approximation – you will get them all the paperwork for the next meeting. If you don’t feel comfortable with the lawyer you met, by all means – find another one. They should be more than willing to help, be friendly, and available to answer any question. Also, the first meeting should be free.

After you meet with the lawyer and spill your guts to him, you will need to get him the facts. Make a list of every (and I mean every) person your business owes money to, including employees, vendors, contractors, leases, bank loans, and customers (if you owe them product or services they already paid for or signed a contract for). Give them their names, addresses, and phone numbers, along with how much you owe them. You will also need to bring the last two years of tax returns if you have those. You will also need to bring a list of any assets your company has (machines, desks, computers, supplies, etc) and their approximate value.

After that, they will tell you the best part – you are not to speak with anyone that you owe money to. The lawyer will contact every person you are indebted to, send them a notice of intent to bankrupt, and instruct everyone to call the lawyer, and not you. If someone does call you, you need to give them your lawyers information, and tell your lawyer that they called you. The lawyer might have missed sending them the information.

That alone will remove a great deal of stress from your back.

Also, if you do decide to go bankrupt, the lawyer will tell you that you cannot go out and sell anything else under the business name.

Another thing to note, that I am sure you wish you knew at the beginning of your business – if you owe money to people and have signed a personal guarantee, make sure to point that out to your lawyer. After my business shut down, I still owed the money to people I personally guaranteed. That really (and still does) financially hurt. Bankrupting a corporation does not get rid of personal guarantees. So the next time around, be on the lookout for those, and avoid them if you can. It’s not always possible to avoid, but keep an eye out.

Once the lawyers take over, you can pretty much turn the sign on your door to “closed” and go home. It will be hard, but it does get better.

The whole business bankruptcy takes a surprising long time. Depends on where you are, but mine took about nine months. You will eventually have to go to court with your lawyer (that is important – make sure they go with you). Your lawyer will pretty much speak for you. And don’t miss the court date. I missed my first day in court – it wasn’t pretty. In court, some of the people you owe money to might be there – they want to know what place in line they will be in to collect money. If you business has any assets to sell, the legal clerk will take charge of that. Mine had about $10,000 in tools and furniture, and the clerk decided that it was not worth it for him, so they gave it all to me. (At the time, I was so depressed with the whole situation I just left all my stuff in my warehouse and walked away.)

There will still be leftover stuff you might have to deal with – sending papers to the IRS, your final corporate tax return, personal liabilities, and such. Again, after it is all done, you can still call your lawyer and ask for advise.

In the end, the whole process is pretty simple. Sure, you might still get mail from vendors, but just bring any bills or nasty letters to your lawyer and let them deal with it.

Good luck. It does get better.

There are hundreds upon hundreds of books on how to start a business, grow a business, succeed in business, business motivation, and getting rich – but, in all my searching, there are very few books on shutting down a business. I can count on one hand the books I found on business failure, and half of those were out of print.

No one wants to talk about it, think about it, or write about it – with good reason! When you start a business, having to close the business is not – and should not – even be on your radar.

But it happens. Happens to 9 out of 10 businesses. Even happened to me. 

And I’ll tell you right out – it sucks. A terrible time. But it happens, and life goes on. So, I’ve decided to write about it. For the 90% of business owners that have to go through it, and have to face it alone. Because, let me tell you – if you think it’s lonely at the top – it’s even lonelier at the bottom.

I’m going to write about my experience with business failure. And I know, I shouldn’t call it a “failure”. But, when it happens, that’s exactly how it feels. You have your employees that believed in you, now looking for a new job. You have family that suffered with you, friends that helped you, vendors who trusted you, customers that needed you – and now you’ve let them all down.

Believe me, I’ve been there. My experiences might not exactly match yours, but I’ve talked to enough people that went through (or are now going through) the same thing that basically, what happens, is the same for everyone. The feelings, the reactions, the never ending calls, bills piling up, people loosing faith in you – everyone goes through basically the same trials.

But, dear readers, don’t give up. It is a long, dark road – but there is light at the end of the tunnel, as they say.

For this series, I am going to assume that your business is nearing (or at) the end of its days. You’ve stuck with it as long as you could, called in every favor, begged every customer, pushed every sale – but realize the end might just be near. Collection agencies are pounding at your door, you can not place any orders for inventory, you are selling leftover parts on Ebay, and you can not pay your employees any more. You can’t sleep at night, and you dread going into work every day.

I know, it’s a terrible place to be. I’ll share with you my experience, and you will know you are not alone. If you need help, have questions, or need someone to listen, drop me a line. Find my contact link on the left side of the page, near the top.

There is much information to discuss regarding the end of a business, so I’ve decided to break it up into multiple parts. So check back every few days or so – or – add this site to your newsfeed reader, or put your email into the “subscribe” box at the top left of the page, and I’ll be sure to let you know when I post another section.

If you are in the unfortunate position of having to close a business, I feel for you. But don’t worry – it’ll work out. As my dad keeps reminding me – “there is no debtors prison anymore”.