Tuesday, May 29, 2012

Steps to Closing Your New Home Building Business

If you have fought the good fight but realize that maybe getting out of the new home building business is the right decision for you, here is a list of important things that you should do before you turn off the lights and walk out the door for the last time. 

Talk with your accountant and attorney before you begin working on a closing plan.

Here’s what you need to do:
  • Collect any outstanding accounts receivable from new home buyers, banks and remodeling jobs that you have completed but not received payment.
  • Notify your suppliers, lenders, service providers and utility companies as soon as possible.  Make sure you send certified letters telling them when you are closing, requesting credit of any used inventory on you have on hand and a final statement.
  • Notify your customers.  If you are in the middle of building a home and find you can’t complete it, get legal counsel immediately.  Failure to do this could find your butt sitting in jail.
  • Terminate any leases you have for equipment and rental space.  Give your landlord the required notice stated in your lease.
  • Notify and pay your employees.  Your state may require you to give your employees an advance notice and also file paperwork with local and state agencies prior to notifying employees.  Failure to make payment in full to your workers will get you many lawsuits.
  • Liquidate your business assets.
  • Make your final Federal and State payroll deposits.  These taxes if unpaid will accrue interest and penalties until paid and both can attach your personal assets and bank accounts.  This is serious stuff.  Don’t forget to file your final employment-related tax returns.
  • Cancel your county and state permits and licenses. Don’t forget your fictitious name registration.
  • File your county, state and Federal income tax returns.
  • If you have any monies left over (doubtful), distribute them to yourself and any other owners.
  • If incorporated or have a partnership, file the required forms for dissolution.

While the majority of small business owners can wind up their business affairs (and protect their personal assets) without filing for bankruptcy, if you have a heavy debt load and creditors who won't settle for less, bankruptcy may be your best, or only, option. If you do file for bankruptcy, it will be your first step in the closing process; the rest of the steps discussed above will follow, shaped by the bankruptcy process.


Anonymous said...

Filing bankruptcy is the worst thing to do. If you are incorporated and did not sign a credit application with a persoanl guarantee then just let creditors take useless judgements.

Consult an attorney and protect your family assets.

Anonymous said...

A real sign of the times when your articles have gone from increasing market share to closing your business. Maybe builders should just recoqnize that delivering value at a fair price is the only way to survive.

Coach said...

My articles are realistic. Builders close up shop in the best of times because of low sales, retirement and better opportunities. I wrote the article for them.