When is the time to close a business and how to leave the game without loss

When is the time to close a business and how to leave the game without loss

Business liquidation sounds intimidating. Few entrepreneurs, starting their own business, think that the moment may come when they will have to “close the shop”. And if this very moment has come, only a few are ready to admit, even to themselves, that closing a business would be the most sensible step. Most entrepreneurs tend to struggle for the survival of their company by refusing to realize that they are actually trying to ride a dead horse. And they come to their senses only when everything has come to a complete collapse.

How to close a business and what documents are needed for this is not a problem to find out in our time. The laws that govern such things are not difficult to familiarize yourself with. It is easy to find lawyers and accountants who will prepare the necessary papers in the best possible way for a reasonable fee.

We are talking about something else today. About how to understand in time – it’s time to close the company, so as not to suffer further yourself and not to torment employees and partners. How to do it without loss. And at the same time about the mistakes that an entrepreneur risks making while even turning to experienced specialists for help.

Business according to the mind

Zhazhda’s experts are sure that often the imminent closure of an enterprise can be predicted at the very beginning, in fact, before the company even started to work.

As Evgeny Zhigalov notes, many Russian entrepreneurs forget that their business should not only be to the liking of the owner – there should be a high demand for the goods or services offered by the company. Moreover, the demand should be exactly “here and now”, otherwise it often happens that a businessman at one time successfully “started”, and calmed down on that. The market is changing, but it doesn’t want to notice it. It is not far from here to closing. Especially, the expert notes, small business suffers from this.

Evgeny Zhigalov: “It is impossible to give a clear and unambiguous advice on whether to close a business right now. It is necessary to analyze the niche, the field of activity and the current situation in terms of demand. Most entrepreneurs try by hook or by crook to keep and protect their business. But if demand falls, you need to revise your business model and study the market: what is in demand here and now? If, say, telecom operators today began to actively advertise and sell pagers, for which there was once an increased demand, their companies would go into a deep minus. And this example is applicable to any area of ​​business. “

Sergei Zhitinsky also agrees with Zhigalov. He also believes that it is not easy to “catch” the moment when it is time to shut down the business. Especially if an entrepreneur has painted for himself a certain ideal picture of “how everything should be” and does not pay attention to the fact that in reality something is going wrong.

Sergey Zhitinsky: “I have been in entrepreneurship practically all my life, and experience has allowed me to deduce several criteria that a business is in a critical state and it is better to close it. If this is a startup and within several months the entrepreneur cannot even remotely approach the intended results (there is no expected consumer interest, financial indicators are far from planned, it is not possible to hire good specialists) – this is a clear indicator that business has gone in the wrong place and there is no point in continuing … If this is a business that has been working for a long time, then, according to my feelings, the “black streak” that lasts one and a half or two months and absolutely cannot get out of it is also a reason to think and make a decision. At the very least, analyze what was done wrong. The maximum is to suspend work. Of course, You won’t be able to close the company overnight – there are people who work with you and with whom you need to settle accounts, there are other kinds of legal issues. But it’s better to do everything on time and not aggravate the situation. “

To prevent this from happening, experts advise to constantly monitor competitors, market trends, dynamics of supply and demand. Evgeny Zhigalov mentions the Internet services wordstat.yandex.ru and trends.google.com/trends/explore as simple and effective tools for this: they will allow you to assess the growth or decline in a particular area.

“And if the market is declining, it is necessary to urgently change the concept, business model or product offer, and not wait, but act,” Yevgeny Zhigalov is sure. – “If the market is growing, and the company’s sales are falling, it is necessary to look at the” internal kitchen “and look for reasons why everything is going uphill in the competitor, and our closing day is approaching.”

In our time, the expert is sure, “salvation” of business can bring segmentation of the target audience, narrowing of activities (hairdressing salons only for men, beauty salons only for women, VIP salons, sports nutrition, etc.).

“Many people are afraid to narrow the audience, thinking that they will lose profit, but this is a deepest mistake, since it is easier to reach your target audience when a detailed client avatar is registered. It is cheaper and more effective to advertise a product to a potential consumer, and not to the whole world, ”Zhigalov says.

But, as a rule, our expert notes, it is very difficult for a person to see the problems of a business on his own, especially to admit his mistakes. It is easier to blame the state, partners and the whole world for everything. Not everyone is ready to turn to a consultant either: well, of course, these are costs.

“In fact, these are investments that justify and recoup investments in the business and allow raising it to another level. But no, many entrepreneurs prefer to close with a huge minus, ”notes Evgeny Zhigalov.

However, it also happens that the situation requires the most decisive steps. Simply because there is nowhere to pull further.

Sergei Zhitinsky: “I adhere to the“ rule of three ”. If I three times invested in the project everything that I had in terms of finances, and three times made all the necessary efforts for its development, and the return turned out to be lower than expected, the project must be closed unequivocally: it is not viable. But that’s just my opinion. It happens, after all, as in that parable about the miners, when one of them quit working, literally half a meter before reaching the gold … “

… and a business to heart

Both experts also note the following moment: no matter how “thoughtful” the business is, but if interest in it has gone, replaced by emotional burnout, it means that the business is coming to an end. Indifference to his business is unlikely to force an entrepreneur to develop it, look for new approaches, expand the capabilities of the enterprise, etc. In such situations, it would be good to sell a business, but, again, it is necessary to “catch” those circumstances when it will be beneficial for both the seller and the buyer.

Evgeny Zhigalov: “Several years ago my wife and I had a business in the beauty industry. We bought an already operating tanning studio and were actively working on creating a brand and promoting it. The business brought income and pleasure, and gradually we increased our volumes and our client base. But the moment came when we needed to scale and open branches in different parts of the city: this was requested by our clients. We monitored competitors, demand in the market, which was growing, but not as dynamically as several years ago. In addition, due to the birth of a child, we focused on other things, our priorities have changed. It was interesting for us to travel with the whole family, it was important for us that we were our own masters, had free time. But this would not have allowed to fully meet the expectations of customers, and in the branches the quality of services was no longer what we wanted. That is why, despite the fact that our business processes were built and required minimal control, we decided to sell the business. At the time, it was perfect. Otherwise, soon we would just start our business, and we would have to close with a big minus. “Evgeny Zhigalov: “Several years ago my wife and I had a business in the beauty industry. We bought an already operating tanning studio and were actively working on creating a brand and promoting it. The business brought income and pleasure, and gradually we increased our volumes and our client base. But the moment came when we needed to scale and open branches in different parts of the city: this was requested by our clients. We monitored competitors, demand in the market, which was growing, but not as dynamically as several years ago. In addition, due to the birth of a child, we focused on other things, our priorities have changed. It was interesting for us to travel with the whole family, it was important for us that we were our own masters, had free time. But this would not allow to fully cover the expectations of customers, and in the branches the quality of services was no longer the same, as we wanted. That is why, despite the fact that our business processes were built and required minimal control, we decided to sell the business. At the time, it was perfect. Otherwise, soon we would just start our business, and we would have to close with a big minus. “

What to hide, so many entrepreneurs, who, in general, it is clearly time to close, are worried (and therefore stops them from taking a decisive step) and the thought: what will people say? It seems like a man “got a shot”, did not pull, although he put a lot of money and effort into the business. This makes them “fight to the last” – in fact, contrary to common sense.

Our experts are absolutely unanimous that in such cases all emotions should be pushed aside, turned on your head and remembered that others, by and large, do not care what you have opened or closed there. And the closest people will support you in any case.

And in the end, we are not living for the last day – perhaps, soon after the closure of one business, it will be possible to open another and act taking into account the previous mistakes. Or maybe, after a bad experience, a person will understand that entrepreneurship is not for him at all. Which, in a certain sense, is also not bad.

At one’s own risk

But, let’s say, all internal doubts have been overcome, resuscitation measures have not worked, and the decision has been made. In principle, as already mentioned, many legal companies are now undertaking to provide services for the liquidation of a business. But nevertheless, some things must be foreseen by the entrepreneur himself, and no one will do this for him.

Artem Kardanets: “First of all, one must remember that an entrepreneur, be it an individual entrepreneur or the owner of a legal entity, is a certain legal status, which implies the existence of rights and obligations. For some reason, a considerable number of businessmen lose sight of this. And they forget that the failure to fulfill some obligations, for example, in settlement of accounts with employees and full payment of all compensations to them at the closure of an enterprise, may entail criminal liability. There are also a lot of those who, with the closure of their business, gave up on their rights. And completely in vain. “

Artem lists difficult situations that can end up with serious consequences for “closed” entrepreneurs. Problems with bank loans, for example, are not uncommon. They seem to be issued for the company, and not for the businessman personally. And the company closed down precisely because it could not pay off loans. The bank will not let the bank simply “forget” about this debt … And for the former owner, this may turn into a criminal article on deliberate bankruptcy or fraud.

An entrepreneur who has not brought relations with counterparties to a logical conclusion can also be accused of fraud. For example, a company received a product for sale, and after a while it closed.

“It seems that there is no body – no matter, many think so,” notes Kardanets. – In fact, in this situation, the businessman can be accused of fraud. As in cases where the company was transferred to another person. No matter how trite it may sound, in the most difficult situation you have to remain a decent person and follow the law – then the problems will gradually recede. “

As for the rights of ex-owners of enterprises, as the expert says, they often do not take into account that the liquidation of a business does not put an end to the collection of debts from counterparties.

“It happens that a person closed the company, and then remembered that he delivered the goods to his partners, but they did not pay. Do not forget that the limitation period in such cases is three years. And, for example, such a practice as the assignment of the right to claim a debt to another company will be useful in this situation, ”notes Kardanets.

Before the closure of the company, the expert reminds, one should not forget about the withdrawal of movable and immovable property registered to the organization – the founders have the right to it and can rewrite it to themselves. “A separate issue is equipment received on lease. It worked and works, payments were made for it. I do not want to lose either money or equipment. And that is why the only way out here is to re-register it to another person, ”comments Artem Kardanets.

Difficulties often arise when the property needs to be divided between partners who have invested in the business.

Artem Kardanets: “Each case is individual, and so that everything is legal, and the interests of all parties are respected, it is worth contacting a lawyer, and not when everything has already happened, but in advance. In our country, for the most part, it is customary to go to specialists when the problem not only arose, but also took a serious turn. There is a joke that in our country everyone considers themselves to be literate doctors, teachers, economists and lawyers. So people are pulling to the last, they say, the financial situation is worse than ever, and then there is also a lawyer to pay. And thus they only aggravate the situation. “

Artem Kardanets recalls such examples from his practice: the closure of the business was associated with the divorce of the spouses-entrepreneurs, and it was too difficult for them to share a common cause. In another case, a business woman took a large loan, but did not pull out with payments, and the bank filed a lawsuit for bankruptcy of the company. It is in such situations that entrepreneurs, as a rule, seek advice, the expert notes. And in cases of “easier” – it is extremely rare.

“But it’s not for nothing that when we talk about business, we turn to the formulation of the legislator. And it says that entrepreneurship is an activity at your own peril and risk, – emphasizes Artem Kardanets. – This implies, among other things, that a person himself and only himself is responsible for his decisions: when and to which specialist to turn for help, whether to take a loan from a bank and in what amount, on what conditions and to what extent to conduct business with partners ” …

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