Small Business Real Estate Guide to Business Closure – Checklist and Questions to Think Thru by Chris Condon, Vice President, john greene Commercial Chris Condon Vice President john greene Commercial 1311 S. Rt 59 Naperville, IL 60564 chriscondon@johngreenecommercial.com 815-693-3005 mobile
Small Business Real Estate
Commercial Property Sales, Simplified
Shutting down your business so you can move on to your next chapter can be an overwhelming and stressful situation. There are many emotions that come up as you contemplate what’s next. Most often, this has been your life’s work for decades. There are many relationships that will be affected. There is so much stuff that you will no longer need. I have helped several business owners make this transition the last few years. Each one has approached it a little differently depending on if they are a service or manufacturing business. Like all the projects you have accomplished over the years, it begins will a clear set of objectives and a date to have it achieved by. The most important date to set is when you will close the doors of the business. With that, you can start planning before that day and after that day to achieve your goal. For most businesses, once they stopped doing business, they still needed 30-90 days to clear out the property so the closing can take place.
Considerations: Clients/Customers-
When will you tell your customers you will be ceasing business? How will you go about stopping business? Will it be a gradual wind down? Or, will you just close and liquidate? For many this is their biggest concern. These are relationships you have had for a long time. They likely depend on your business, and you feel an obligation to do right by them.
Employees-
When will you tell your employees? How will you tell employees? What will you do to keep the most important ones around as you make this transition?
Raw Materials-
How much inventory do you need on hand to allow you to finish your existing orders? If this material isn’t used, can the excess easily be sold and converted back to cash for your next chapter?
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Small Business Real Estate
Commercial Property Sales, Simplified
Finished Inventory-
How much inventory do you need to fill your current orders or future orders between now and closing the doors? If you have excess inventory, what are you willing to offer in discounts to move this inventory?
Tools/Equipment-
How much is your production equipment worth? Do you have buyers lined up once production ceases? What is the timeframe to sell this equipment, and have it removed from the property? Is special moving/rigging equipment required to transport it?
Building/Property-
When is it appropriate to list the property for sale? How much time will be needed after business ceases to be able to empty the building?
Tax Implications/Preparedness-
I would highly suggest having a conversation with your accountant and financial advisor on the potential tax implications when you sell your property. For the real estate especially, if you have own for a long time, you will want to explore what options are available minimize capital gains taxes. You will also want to figure out how this capital can best be invested for additional growth or cashflow. With answers to these questions, you can begin establishing a week-by-week plan for you and your team to execute on. Keep in mind this is a process not an event. It took you many years to build your business and acquire all the stuff. It’s likely going to take some time to wind down and sell all your equipment.
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Small Business Real Estate
Commercial Property Sales, Simplified