how to shut down your business
today’s question from asa in sweden may not pertain to you directly, but i have a hunch that whether or not you plan to shut down your company, there’s learning in this lesson for you, too. she asks:
“i have decided to shut down my life coaching business (after 5.5 years) and focus my efforts on my passion project. i started a podcast and am enjoying the process and learning more and meeting new cool people who have opted out of the rat race and sharing my journey and learning from others. i know you have shut several businesses down in the past and i guess my question is how do i do this?”
i’m a big fan of anyone who follows a path that feels aligned for them, on their terms. so kudos to asa for doing that. one point of clarification, i’ve never closed my businesses. i’ve either systemized them to a point where they run passively (by training someone up and turning the day-to-day operations over to a member of my team) or sold them. that said, i’d like to address some options to shut down a business:
consider what assets you have in the business (for example: email subscriber list, physical inventory, intellectual property, audience demand, a well-oiled team, repeatable revenue, courses or programs, etc) which might be saleable in part or parcel. this could allow for some or all of the business to continue without you and keep serving your existing customers. it also can result in you getting paid out for your efforts to build to that point. here’s an article i wrote on simple steps to sell a business, no matter its size.
if selling isn’t the route for you (perhaps you know in your gut that you’re complete with this endeavor and you’re ready to cease efforts towards it quickly and/or there isn’t anything saleable), you can decide if and how you’d like to alert stakeholders. if you have teammates and/or investors, you’ll want to share the news with them first. then, consider vendors, partners, and clients/customers. if you’re a solopreneur and currently have no clients, you could make the choice to quietly close. (were you to choose to share more broadly, there are opportunities for others to learn with you and normalize endings as part of the journey.)
there’s also a middle path where you train someone/others to take over but you remain full or partial owner. in the case of a business like life coaching where it’s dependent on you, this is likely only an option if you have an infrastructure that another coach you trust would benefit from stepping into without dissolving your business or selling it (a win-win like shared equity because you have ongoing client demand and pipeline, for example).
close out the financial end of your business: credit card(s), bank account(s), taxes, and federal tax id. consult with your accountant to make sure you do this in an appropriate order and timeframe, not before your final payments are processed.
not required but highly recommended: take time to do a personal post-mortem. what did you learn? what energized you? what depleted you? what do you want to take from this moving forward? what do you want to leave behind? what did you learn about yourself? how do you want this to inform your next steps? what do you want to celebrate? where do you see areas for growth going forward?
the end of anything, including a business, can cause grief. give yourself the time, space, and support you need to process that.