Should I sell my business or close it?

Many owners near retirement assume nobody would buy their business, so they plan to close the doors. It is worth checking that first. Here is how to think it through.

What closing usually means

When you close, you sell off equipment, vehicles and stock, collect what customers owe, pay your final bills, end or hand back your lease, and file final tax returns. You usually get only what the physical things are worth, and second-hand equipment often sells for much less than you paid.

What selling can add

A buyer is paying for a working business: the customers, the phone number, the name, the trained staff, the suppliers and the way things are done. That is often worth more than the equipment alone. It can also mean your staff keep their jobs and your customers keep their service.

Questions that help you decide

• Does the business make a steady profit after paying a fair wage to whoever runs it?
• Would customers keep coming if you weren't there?
• Is there someone nearby who might want it: an employee, a competitor, a supplier, a customer?
• How soon do you need to be out? A sale takes time. Read how long a sale takes.
• Does your lease run long enough for a buyer to take over?

A middle path many owners use

Give a sale a fair try first, with a firm date in mind. Get a rough value estimate, write down how the business runs, and list it free. Mention it quietly to the people most likely to buy. If no serious buyer has come forward by your date, you can still close in an orderly way, and you've lost very little.

If you do close

Closing has its own steps, depending on whether you are a sole proprietor, a partnership or a corporation. A lawyer or accountant can guide you, and in Alberta, Business Link has a free guide to closing a business. In BC, Small Business BC offers free and low-cost help.

Leaning towards selling? Start with how to prepare your business for sale and how to find a buyer.