Whatever the reason behind closure is, as the owner of small business it is your responsibility to close the business formally and fulfill all regulatory requirements involved in closing a business.

How to Close a Small Business – The Most Important Items

1. Deposit your final Federal taxes through EFTPS or 8109-B

2. Issue information to employees about final wages and withholding using Form W-2 and report information from W-2 issues to IRS using Form W-3.

3. File the appropriate employment tax form relevant to your business type for the quarter or year.

4. Report your capital gains/losses

5. Report the sale of business assests

6. Report the shares held by the shareholders or partners

7. File the final employee pension/benefit plan

For detailed information, you can refer to the checklist provided by IRS for closing a business.

There may be some local or state government requirements that you will need to fulfill.  Please visit your state and local government website before finally closing your business.

The SBA also provides helpful information on how to close a small business that you should refer to before locking the doors of your business.

In the end, we want your small business to be successful and hope that the reason you read this post is because you are planning to close your small business for a good reason.

There are various reasons for individuals and organizations being silent business investors such as:

1. Not having time to participate in management activities
2. Not being able to culturally fit into the organization
3. Not having the understanding or core competency to run a certain type of business
4. Not willing to come out publicly as being associated with a particular organization
5. Maintaining confidentiality of financial capabilities and status

Often investors provide more than just money; they provide leadership support, guidance, connections etc.  It is said that if you are an organization which lacks capabilities in terms of leadership, networking, business guidance etc. you should look for business investors who will be available for help with more than money and whenever you need them.  However, if you have everything to run your daily business, you can leverage silent business investors to fund your efforts.

In my view, funding is never bad, if it comes at a right cost.  Even if you do not have organizational capabilities and you are only able to get silent investors to put money, go ahead and take it.  Once you have money, you should be able to build those capabilities in business by hiring the right set of people and the money will help you do that with ease.

Both Ben and Jerry have had an association with ice cream during their study days as they worked as ice cream truck driver and ice cream scooper respectively.  However, they shifted to other areas of work after their education only to meet later and deciding to go for an ice cream business.  The idea of ice cream business was not by choice but because of the fact that the equipments for making bagels were very expensive and at that time, unaffordable for them.  Both of them took a correspondence course in ice cream making for $5 each from the Penn State University.  Finally in 1978, The first Ben and Jerry’s store opened up in a Burlington’s abandoned gas station which they got renovated.  The business touched $4.4. million in sales within 6 years and in 2000 the company finally got acquired by Unilever for $326 million.

Some of the take aways and tips for budding entrepreneurs from Ben and Jerry’s story are:

1. Be Creative: Ben and Jerry’s didn’t go after making usual flavors and rather brought into the market, the flavors which people never expected and creative names they never heard of.  Apart from the products, their way of marketing the products was also creative with the use of “Cowmobile” to tour the entire United States and distributing free scoops.

2. Be Socially Responsible: Ben & Jerry’s always tried to connect with the community and be environment friendly company.  The establishment of Ben & Jerry’s Foundation for funding community projects, paying Vermont’s dairy farmers a premium of half a million dollars to offset losses due to volatile prices, using recycled material to build an ice cream shop etc. are some of the examples of social responsibility demonstrated by Ben & Jerry’s.

3. Have Fun: Business doesn’t need to be serious all the time.  Celebrate each and every event, holiday, festivals etc. along with the employees and if possible, involve your customers.  This is what Ben & Jerry’s did; never lost an opportunity to connect with your employees and customers.

1. Prepare an Elevator Pitch:  When a potential customer wants to know about your product or service, he should not be required to go through loads of information before making a conclusion about what it actually does.  Elevator Pitch should summarize information about your business, product or service and what it intends to do in not more than two sentences.  As Sequoia Capital puts it, businesses should be able to describe themselves on the back of a business card.

2. Prepare A Paying Customer’s Case Study:  If you have a paying customer, prepare a case study detailing the problem that the customer had, how your solution helped solve the problem, and what were the quantified benefits that your customer had using your solution.  If possible, try to include customer testimonials and reference information by taking an approval.

3. Customize Your Presentation:  Try gathering as much information about the customers, their business, problems and opportunity areas in business and any other information which is related with your product or service.  Use the web, reports, press releases, newsletters, industry journals to find information and then use this information to customize the sales presentation for making it more relevant for your customer.

4. Use Appointment Call Effectively:  The call for fixing appointments can be effectively used to establish rapport with the customer on the basis of common background, contacts, interests etc.  The call can also be used to find useful facts and information about the customer which can later be used during the sales meeting.

Once you have done all of the above depending on your business, you can be sure of making a great first impression because you are already prepared for explaining your business, product or service and that too which is highly customized for them.

1. Eliminate activities and services that your customers do not value

It is said that almost 90% of the activities conducted to deliver a product or service, in a normal business, are non-value adding for customers.  Find out all those activities that would have a become a regular part of your business over a period of time.  An easy tool to find out all those non-value adding activities in your work is process maps.  Create an end-to-end process map of all your business activities and qualify each step as a value adding or non-value adding activity.  Once you have identified the non-value adding activities in the system, try eliminating them.  Since all non-value adding activities add to the cost of final product or service, you will be able to realize more profits by eliminating them.

2. Align your process with that of your customers

You should know what is the problem that your customer faces and how your product or service fits in for resolving the problem.  Work with your customers to understand their processes, requirements and problem areas to improve your offering.  By aligning your process with your customer’s, you will be able to offer a product or service that your customers will value and will be ready to pay more for the same.

3. Don’t Offer Value Adding Services For Free

While serving customers, businesses offer various types of allied services without any charges.  Repeat the activity of identifying value and non value adding activities in your process and focus on value adding activities this time round.  If you come up with activities which are valuable to your customers but you are not charging for them, it means you are losing on both additional revenue as well as associated profit.  Start charging for all those activities and your customers will be happy to pay for them if they find them valuable.

Before jumping on to eliminating activities or start charging your customers, you should understand that the above suggested activities cannot be carried out in isolation and requires working with your customers constantly.

Starting April 1, B.E.T.A. Daily will provide articles on building your own business.  So, whether you are interested in Freelancing, Online Business, or Home Business, you will get resources that will aid you in doing what you want.

I already have certain thoughts in mind; but if you wish some sort of business to be covered in particular, do let me know through a comment on this post or by dropping me an email at vikrantsharma1 (at) gmail dot com.

B.E.T.A. Daily is looking for your active participation for this series so please help us help you in being your own boss.

As per the book, there are seven different types of messages (triggers) which, when passed on to your customers, will get them to saying ‘Yes’. These triggers are:

• Authority – Messages that will get acceptance because of proven expertise in the field.

• Consistency – Creates positive perception on the basis of historical performance and successes.

• Contrast – Messages comparing your offering to those of others and proving it a better alternative.

• Friendship – Personal relationships and networks leading to acceptance.

• Hope – Building confidence and expectations that deliver agreement.

• Reason-Why – Providing reasons leading to an automatic Yes.

• Reciprocity – Simple Give and take philosophy where agreements are reached on mutual benefits.

While preparing a sales pitch for you products or service, you can include these messages to better convince your customers. I think that in most of the scenarios, these messages will not work in isolation and have to be clubbed with each other to make a successful sales pitch.

Recession, if well prepared for, can prove to be beneficial for businesses. Smart entrepreneurs see opportunity for gaining market share in the downturn. Here are specific action items for businesses to survive recession and thrive later.

• Create Cash Reserve This is the first and foremost requirement. Every business needs money to survive and since cash inflow often declines during recession, a cash reserve will give you a shield against the unforeseen. Startups are often cash crunched and can fall into recession trap because of low cash and minimal or near zero sales. They should try to raise enough capital from angels and VCs.

• Diversify While running your core business tightly, try to build multiple income streams which are independent of each other so that failure of one does not affect the other. For example, if you are a web hosting provider, try selling Managed services or support for certain applications.

• Build Operational & Cost Efficiencies With declining sales, it becomes essential to cut costs to turn the bottom line green. Go and find out the areas where you can cut costs, reduce wastes in the process, improve productivity and negotiate contract with your vendors for better pricing. Building operational efficiencies will keep your organization lean thus impacting the overall profitability.

• Improve A/R and A/P Practices During recession, the first hit on your business comes from prolonged A/R cycle as your customers will seek more time to make payments. If your business is heavily dependent on monthly receivables, it will directly impact your sustainability and growth. A prolonged A/R cycle will also extend your A/P cycle and will lead to double stress. To solve A/R related problem, work with your customers and offer innovative and flexible payment plans according to what they can pay. You can also look at restructuring past due balances as long-term debt payable as per agreed schedule. If you face problems on A/P side, try to get these solutions implemented from your suppliers.

• Network & Build Relationships Build as many contacts as possible both online and offline. If you are well networked, chances are that you will get good business leads from contacts. You should also work on building long term relationship with your existing customers. Try meeting your customers in person once in a while or use innovative methods like sending a thank you card so that they can remember you. No other method can beat repeat and referral business in profitability.

• Focus on Service You should continue to provide outstanding customer service to all the customers and don’t let staff reduction impact your responsiveness and service levels.

• Maneuver to Lead If your business health allows, drive yourself to pick up market share by keeping your marketing and advertising activities intact or even accelerate them. It is common for most businesses to cut on marketing and advertising expenditure during recession. It can be a good time for you to keep sending your marketing message out to the customers; you will be remembered by your customers more than the competition when the recession ends.

• Survive Last but perhaps the most important, try to survive. Do whatever you can to survive because once the tough times are over, you will find yourself in a better position as some of your competition would have succumbed to the pressure.

What other aspects can you think of which can hep businesses keep away the effects of recession?