Deciding to dissolve your partnership and close your business is one of the most challenging decisions you will face in your career. Closing shop is not only stressful for you as a business owner and partner, but it can also weigh on you as you consider the effects on customers when ending a business partnership. However, with the right timing, messaging, and legal support, you can dissolve your business partnership and continue to maintain your relationships with vendors, clients, and other companies. This is especially important if you or your partner want to start a new, similar business.
At BrewerLong, we help Florida businesses at all stages of their lifecycle. Read on to hear our tips for dissolving your partnership and minimizing the customer impact when terminating a partnership.
Collect Accounts Receivable
One of the first steps to take when dissolving your partnership is to collect outstanding accounts receivable. Typically, this is one of the most significant ways how dissolving a business partnership affects customers. Where they may have been given ample time without pressure to pay their bills, customers can be impacted by sudden pressure to settle their accounts with you.
Companies usually prefer to collect accounts receivable before announcing a dissolution, knowing that some of their customers owe them for goods or services received. Once customers know that your partnership is dissolving and your business is shutting down, they may refuse to pay.
Strategically Time Your Dissolution Announcement
Again, even if you are preparing for a partnership dissolution, you will still need to keep paying bills and generating income until the day you close your doors. For instance, you will want to time your announcement so that it does not impact continued income, like announcing a dissolution after the holiday season, so as not to interfere with Christmas sales. While this will obviously impact your customers, you do not want your clients heading elsewhere before you close up shop completely.
One of the most common ways to announce your partnership dissolution is to send a letter to your customers and vendors. You can use this as a way to thank them for their support of your business while minimizing the customer impact when terminating your partnership. This will likely be your last communication with your clients, so be sure to keep a line of communication open if you or your partner plan to start a new business.
Working with a trusted lawyer can help you craft the most effective dissolution announcement. The BrewerLong team has been helping Florida entrepreneurs with business issues like these for years and can help you too.
Provide Customers with Specific Information
Be sure to keep the tone of your partnership dissolution announcement letter straightforward and professional. By providing your customers with the exact date, the business will wrap up. If desired, you can provide a contact for a similar business that can now meet their needs. Doing this can minimize the effects on customers when ending a business partnership. You can also provide future contact information so customers, vendors, and others can get in touch if they need to reach you after the closing.
If you operate a physical storefront with your partner, another way to communicate the business dissolution to clients is to post signage around your premises. Include details about the business partnership dissolution and closing on your social media pages if you have them. Keeping these communication channels active even after your business shuts down can help customers keep in touch.
Have a Going Out of Business Sale
One of the most significant ways your partnership dissolution can impact your customers is if you make a unique or hard-to-find product. If you have inventory left to sell before your partnership dissolution is finalized and you close your doors, be sure to let your customers know about liquidation sales. If you can sell off any remaining inventory, you can put that money toward settling partnership debts and winding down the company.
You can also donate your leftover inventory to charity. Depending on the structure of your business, the deduction may accrue to you or to the company itself. You can speak with a knowledgeable tax professional to confirm your tax status and the impact of any charitable deductions under the CARES Act or similar laws.
Let BrewerLong Help You Explore Options When Dissolving a Business
If you need help understanding how dissolving a business partnership affects customers, we can help. At BrewerLong, our experienced team has worked with small businesses across Florida and the United States to make dissolving your business partnership a smoother transition for you and your customers. As attorneys focused on small business law, we give every client the close personal attention they deserve so we can provide clear and practical guidance through their most complicated legal situations. Contact BrewerLong today.
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