Frontier -- Smart Answers
Q: I need to shut down my 50-year-old, family-owned travel agency. How do I do this properly? --M.G., Fairfield, Conn.A: Every business needs an exit plan. Strategies vary according to a company's legal structure, so you'll need to enlist an experienced lawyer.
Even if you can't find an outright buyer, a lot can be sold in pieces--your customer list, business name, Web site, and fax and phone numbers. "Expect to get between 50 cents and 70 cents on the dollar for your receivables," says Martin Pichinson, an asset liquidation specialist at Sherwood Partners Inc. in Los Angeles. A business broker can help you value each of these assets.
If you have a long-term lease, your rent may be less than market value, and your landlord may be happy to release you. Or, you may be able to sublet to the company that's buying your assets. But be careful about subleasing--if the new tenants default, your personal assets could be at risk.
Tell all your suppliers and customers, in writing, that you're closing (make sure your lawyer clears the letter first). By stopping rumors before they start, the transition will be much less complicated and far more pleasant.Have a question about running your small company? Send an e-mail to firstname.lastname@example.orgBy Karen E. Klein