Closing the business
- yes or no? – the expert tips
Coronavirus crisis was not an easy time - many things did not go as planned. In order to continue, drastic changes are needed but he option of quitting is also on the table.
Our Project Partner WIFI WKO have prepared expert tips for this situations to support covid-19 affected companies. So, what to do? Try to answer this questions to yourself.
- Are you increasingly thinking about closing your business? What do the numbers say? What does your gut say? How strong is your emotional attachment to your business and being an entrepreneur?
- Check what options are open to you personally in the event of an exit: Pension? Change to a dependent employment relationship? Concentrating on other businesses you own?
- What changes are necessary to successfully continue the business? Are the prerequisites (e.g. financial resources, know-how, machinery) in place to implement the individual measures?
- Which exit barriers have to be considered (credit liabilities, long-term contracts, approval of partners depending on the legal form, etc.)?
- Draw up a business plan - a consultant can help to check the economic viability from a neutral perspective. Calculate the minimum turnover and the minimum profit that must be achieved in the next 3 - 5 years.
- Talk to your bank advisor - about the prepared business plan and up to what amount necessary investments could be financed through the bank.
- Contact your tax advisor - discuss the tax consequences of closing the business (repatriation of assets to private assets, tax treatment of sale proceeds, etc.).
- Are there strategic partners who could support you in a re-start (cooperation with other companies, taking on new shareholders, dormant holdings through investment companies, etc.)?