If you found yourself in a situation where you had to close your small business but you are ready to give it another go, there are steps you can take to reopen. Learn more about what it means to dissolve a business, how different political factors can influence business closures and different ways you may be able to not only keep your business open, but allow it to grow.
The good news is that you may be able to reopen your business if financial circumstances have forced you to close. Call your state tax authority and the IRS to see if your final tax return has been processed. If the dissolution has not been finalized, you will be able to stop the process and begin using your existing EIN. However, if the paperwork has already been processed, you may not be able to reopen the same business.
Tips for rebooting after a closure.
1. Revisit your business plan, re-evaluate priorities and prepare for the worst.
If you are ready to reboot your business after being closed for some time, there are some things you can do to ensure success. First, revisit your business plan. What adjustments do you need to make based on the current markets and evolving customer needs? What parts of the plan did and did not work out for you the first time around? Also, spend time considering what caused you to close in the first place and how you can be better prepared for a similar situation in the future.
2. Update your goals and find a team that will help you achieve them.
Now is the time to set new goals. Also, look at hiring new talent who can help take your business in the right direction. As the company leader, it is important to make sure that everyone on the team has a shared vision and is working together. When it comes to marketing, take full advantage of social media to engage with existing and potential customers.
3. Consider a business loan.
Another great tool for rebooting a business is to take out a business loan. Currently, this may be more difficult as a result of the partial government shutdown that has put around 800,000 workers in financial trouble due to COVID-19, but eventually it will get easier. Firstly, these workers represent consumers who won’t be spending as much at small businesses. They are also responsible for processing and approving loans, which means that small business loans will be delayed. If you are counting on a loan to reopen your business, you may be left waiting longer than expected.
It is also important to remember that political events can influence loan interest rates. The government adjusts rates in order to fight off inflation. If the rates have to be increased, it becomes more expensive for businesses to borrow money. In the wake of the COVID-19 pandemic, the US has cut interest rates to try and jump start investments and keep the economy as strong as possible. For the right business, now is an inexpensive time to take out loans.
The COVID-19 pandemic is presenting new challenges to small business owners all over the world. Before you make the final decision to close down, consider trying a few of the strategies mentioned above to help reboot your business. If you still decide to shut down, you may be able to reopen after a certain amount of time. Be aware of your options and what is involved in reopening a business before you commit to closing.
FAQs
Can I reopen a closed business?
It depends, if your articles of dissolution have yet to be processed, you may be able to withdraw the paperwork. When a business is dissolved, it has to file a final tax return and then the IRS officially closes the account. You may be able to reactivate the business and use the same EIN, but you will need to contact your state’s tax office and the IRS to see if you are eligible to reopen.
How do you reboot a business for success?
Rebooting your business comes down to taking an honest look at your business. It may be time to revise your business plan, hire new talent and refocus on old and new business goals. Your entire team needs to be on the same page when it comes to working towards the same goals. Now is also a good time to reach out to old customers and use social media to increase visibility and nurture leads.
Can you put your business on hold?
Yes, but it is a decision that can come with consequences. Ultimately, putting your business on hold will affect you, your employees, your customers and your vendors. A lot of workers live paycheck to paycheck, so they will have to move on quickly and find new employment. Once you are ready to reopen, you may have to hire a totally new workforce. In addition, if you stay closed for a long period of time it may be difficult to rebound. It is a good idea to plan for worst-case scenarios and see if your insurance policy includes any helpful provisions.
How did the government shutdown affect small businesses?
During partial government shutdowns, over 800,000 government workers are faced with temporary financial losses. For small businesses, consumer spending drops and businesses lose out on lucrative government contracts. In addition, the Small Business Association closes, which means that all small business loans are put on hold.
How do interest rates affect small businesses?
Government policy decisions also affect interest rates. As rates increase, it becomes more expensive for small businesses to borrow money and consumers spend less. Lower interest rates can jump start investments and allow businesses to increase production. Interest rates are often adjusted to fight inflation, which is hard on businesses.
How can a business overcome losses?
Ensure that you understand why your business is suffering losses and the changing needs of your customers. From there, reinvest in marketing efforts, refresh your business model, and boost your business with new funding while also cutting costs.
How can I bring my business back to life?
There are a wide range of strategies that can put new energy into your business. Finding the right strategy depends on your business and your goals. Options vary from increasing cash flow and hiring new talent to outsourcing tasks and building customer loyalty.Running a small business is hard work and it will inevitably involve some challenging times. However, shutting down may not always be the right decisions. With the right strategies, you can adapt to changing marketing, evolving consumer needs and outside factors that affect the economy.
