If you are the owner of a small business, what factors would you consider when deciding whether to shut down f

Question

If you are the owner of a small business, what factors would you consider when deciding whether to shut down for the short term?

Answer 1

First and foremost I'd consider the reasons why I'm contemplating doing so to begin with. Once that is clear I'd then evaluate what if anything can be done to avoid this shut down, even temporarily. Weighing that along with what reopening costs I'd be looking at mixed with the current operating expenses, inventory requirements, salaries, utilities etc., etc., leveraged against the income that can be projected (I'd probably use the previous years numbers for this and reduce it by a few percentage points if the current months have been slower than normal), if the business has been in business for over a year tho, otherwise projections of this could be based on the last 3-6 months income.

If there are employees involved, the layoff will mean the issuance of employment papers in the event they are eligible for any government unemployment benefits. Outstanding debts, invoices, purchases must also be accounted for and paid before close down. Can inventory withstand a close-down, even short term or is the product sold subject to time restrictions (foods etc) or clothing for seasons, that type of thing.

Lots of factors and one cannot be used alone unless you are insolvent and must close down...then the decision to do so is already decided.

Personally, if you can somehow float the business staying active is the best choice...inactive Vendor Permits, Numbers, Tax accounts etc may end up subject to additional fees or accounting requirements even after the business closes.

If this is a decision being determined due to a long standing business that someone wants to simply retire from but doesn't want to let go...an alternative manager of the business' affairs by a trusted person, would be beneficial instead.