7 Tips to Feel Good About Deciding to Close Your Business

You’ve invested a lot of time, energy and no doubt your personal funds in building up your business. The very thought of closing it down distresses you at every level. It feels like a personal failure and stirs up a lot of emotions. And yet, choosing to wind down and close your business is the best decision if profitability is unlikely to improve. There are several ways to do this: cessation, liquidation, dissolution or bankruptcy. It all depends on your situation. Whatever the case, it’s better to act rather than wait for the situation to deteriorate and negatively affect your personal finances. Here are a few tips to help you feel good about this big decision.

1. Recognize the signs

The first thing you should do is recognize the signs that your business is in poor financial health. Our webinar on this topic will help you do just that. If you see that your SME is doing poorly and is exhibiting most of these signs, don’t hesitate to call on one of our licensed insolvency trustees. They will help you find solutions to prevent bankruptcy. However, if you see that nothing can be done, simply let go. Sometimes it’s better to know when to stop. There’s no shame in that. It’s even part of a business owner’s duty and responsibility.

2. Inform and support your employees

You must inform your employees as soon as possible because they too will have their own losses to mourn—on top of having to look for a new job. You must also meet your legal obligations, particularly with regard to either termination or dismissal notices. Make a communication plan with your HR department as soon as you know the closing date. Be transparent and don’t hesitate to hold face-to-face meetings with those who wish to attend. The Wage Earner Protection Program may cover a very large portion of wages, vacation and severance pay in a bankruptcy situation.

3. Pay your debts

If you do not have the option of bankruptcy, you must of course settle any debts before the final closure. You must also make sure that you have paid all amounts owing (taxes, deductions and contributions, income tax, etc.). If you have too many debts and are unable to repay them, contact one of our licensed insolvency trustees. They will be in the best position to help you.

4. Inform the authorities

You can use several business closure solutions. Whether you opt for a cessation of activities, business dissolution, or commercial bankruptcy or liquidation, you’ll need to:

• Notify the Registre des Entreprises and the Commission des Normes, de l’Équité, de la Santé et de la Sécurité au Travail (CNESST) that your business has closed.
• Notify both levels of government and your creditors (for more information, visit the Revenu Québec and Canada Revenue Agency websites).
• Cancel your registrations for taxes, source deductions, contributions and income tax.

5. Call in a specialist

Closing a business can be complex, and depending on the procedure you choose, the legal and tax formalities may vary. To make sure you comply with them, we strongly recommend that you consult professionals such as a tax lawyer, chartered accountant or insolvency expert.

6. Take care of yourself

• You may feel that closing your business means you’ve failed. But try not to feel guilty or think less of yourself. Instead, try to understand why you’ve reached this point. As we all know, failure is part of entrepreneurship and can be very constructive.
• Take time to mourn your loss. You’ve invested so much time and energy in your business over the years that suddenly losing it can create a void in your daily life. Take it one day at a time and embrace your emotions without judgment.
• Take a measured look at the future. Once you’ve taken stock, ask yourself what you’d like to do now.
• – Make time for yourself. Perhaps in recent years you’ve taken little or no vacation and fatigue has set in. Have you found yourself on the brink of burnout? It’s time to rest, get a good night’s sleep, do sports and activities that make you happy, and spend time with your family and friends.

7. Ask for help

You’re going through a difficult period and feeling a lot of negative emotions. Consulting a therapist could help you regain your serenity. This will help you in your personal life and also in your entrepreneurial life. And to help yourself through this financially stressful period, don’t hesitate to enlist the help of one of our financial recovery consultants. Whether for your business or your personal finances, they will guide you every step of the way, without ever judging you.