Going out of business and shutting down a warehouse a difficult thing to have to do. Nobody ever goes into business with thoughts of liquidating inventory and shutting down, but businesses don’t always make it, or at least they don’t make it forever. Your company may have been successful for years, but times change and perhaps your priorities have changed, too. Here is a checklist with the most important “Must Do’s” if you are going out of business and shutting down your warehouse.
1. Sell off inventory. If you were in business for a long time you have likely built up inventory. While you should have been getting rid of old merchandise and selling excess inventory all along, you probably have more merchandise that you even expected. You can contact closeout buyers who specialize in liquidating inventory and offer advice on a going out of business sale.
2. Collect outstanding receivables. You will want to collect all or as much as possible before letting your creditors know that you are shutting down your warehouse. If you slowly sell off your closeouts and surplus merchandise they probably won’t notice. But it you suddenly start getting rid of all your inventory quickly it may raise a red flag. Also, if you start telling customers your plans then word will spread and customers will all know you plan on going out of business. Now, this does not necessarily mean they won’t pay you; but there will be those who may take advantage of the situation.
3. Terminate commercial leases. If you have a standard lease commercial lease you may have personally guaranteed any responsibility so you will to have your going out of business sale coincide with the lease expiration. If you are on a month to month lease, you should start liquidating inventory at least 90 days prior to when you expect to make your final payment. If you plan to be selling excess inventory, get a jump start on the process and offer closeouts and overstock to your existing customers early in this process.
4. Notify and pay employees. Give employees as much notice as possible. If you need one key employee to help wind up the business, offer the employee a bonus to stay with you until the very end. Plan to pay employees their last paychecks on their last day, with the value of accrued, unused vacation days included. If you just have an office to close, the process may be relatively easy. But if you are shutting down your warehouse and need to liquidate inventory, you may need to keep a few key workers until the end.
5. Dissolve your corporation or LLC. Be sure you file any required State and Federal forms, including a final tax return, certificate of dissolution, etc. If you are selling off old inventory and excess merchandise, be sure to get final receipts from your customers and closeout buyers. Try to clean up all loose ends as much as possible so you don’t leave yourself open to any liability or exposure after you have shut down your warehouse and gone out of business.