April 27, 2020
Restart Your Business
Whether it’s because of a government ordered shut-down, a family emergency, or other reason, when you close a business and want to reopen it, careful planning is required.
If your business closed because it failed, make sure you’re not making the same mistakes when you reopen it. Come into the market with a revised business plan that addresses the problems you had before and how you will overcome them. Did you learn from your mistakes? How will you do things differently?
A restart is risky and expensive. You can assume your customers moved on, your vendors may not extend credit to you, and you may have trouble getting bank loans or other capital, especially if your first business failed. You will have to reignite your network and rebuild your relationships with your business community.
Even if your business was doing well before, don’t think you can simply jump back in. Your customers will surely have found another provider for your services or products. How you approach restarting your business depends on how long your business was closed and how the market for your products has evolved. For example, if you are re-launching after a brief hiatus, and you told your customers you were taking a break, you might be able to resume business rather quickly. But if you were closed for more than a couple of months, filed bankruptcy, or dissolved your company altogether, look at your business as a start-up.
Take a look at your business’s four P’s: product, price, promotion, and placement. Evaluate how your competitors are handling each one of these areas and where you would like to be in the overall marketplace. You may have to substantially change your original business to compete in the current market. After all, market conditions change. Are there still enough consumers for your products? How will you reach them? Writing a letter to your former customers to let them know you’re back in business is a must. Asking former happy customers for referrals will also help you grow your customer base.
You’ll need to file the proper paperwork with your provincial and local government. The documents will depend largely on how you closed your business in the first place. Most jurisdictions require that you dissolve your business when you cease operations. If that is what you did, you’ll need to apply for a new business license, reincorporate, and take the same steps you took when you opened the business the first time.
If you did not dissolve your business, you may be liable for penalties and back taxes. Consult with your accountant about how to abate penalties and catch up on back taxes. You will also need your accountant to get you up-to-date on tax laws and other compliance issues that may have changed during your hiatus. You’ll need to follow the same checklist for restarting as you did when you opened:
- Register your business name and trademarks.
- Obtain permits and licenses.
- Hire an attorney, accountant, and other professionals.
- File appropriate paperwork with the city, and province where you are operating.
The most important element to restarting a closed business is to look at the entire operation with fresh eyes. And keep in mind that many business owners have multiple failures, closures, and missteps before they find their success.