Business Recovery

Please contact us to request an appointment with an SBDC advisor to assist you in addressing the impacts of any market downturn or if you are considering closing your business.

The information below is provided for your consideration and should be evaluated carefully. As local, state and federal agencies continue to roll out new assistance programs, your best course of action may change.

Downloadable pdf: Business Survival Strategies handout


  • Staffing reductions
    • Current relief options may provide funds to keep employees.  Check with and an SBDC advisor for options. If necessary, assess your minimum staffing needs and make appropriate reductions in personnel and or hours worked.
  • Cash controls
    • Eliminate any expenses not essential to business survival
    • Stop buying inventory unless you can sell it with quick turnaround
  • Leases
    • Contact your landlord immediately to discuss reduced rent or rent abatement, in which suspend payments now that are added to the end of your lease. Any changes would need to be documented in a lease amendment. Dealing with your Landlord? Blog from
  • Loans
    • Talk with anyone you are borrowing from about the possibility of a loan deferral or contract extension. A deferral will have a balloon payment at the end. An extension will extend the term of the loan.
    • Look at your debt load and see if it is possible to restructure your debt to decrease payments.
  • Vendor contracts/payments
    • Talk with suppliers immediately about whether you can delay payments or other ways you might be able to reduce costs.
  • Utility costs
    • Some utility companies are offering COVID-19-related fee reductions. Go to their website or call to find out what relief is available.
  • Taxes
    • Seek emergency relief from both state and federal government
      • WA Department of Revenue disaster relief
      • IRS emergency relief

NOTE: In reducing staff hours and/or furloughing employees, employers must take the lead with WA state Employment Security Division in assisting employees with benefits. There are several options available for unemployment. See the flyer in this link:

Employment Security Department information for workers and businesses affected by COVID-19


  • Traditional or disaster loans

Realistically assess whether your business can take on additional debt.

  • Traditional SBA loans, express loans, lines of credit, etc.
  • Alternative lenders, i.e. Craft3, Mercy Corp, Business Impact NW, Evergreen Business Capital, WAFD, etc.
  • Personal loans (proceed with caution)
  • Same day loans (proceed with extreme caution!)
  • Business interruption/continuity insurance
    • Contact your insurance broker to see what your policy provides
  • Accounts receivable
    • Collect any/all outstanding accounts receivable, but try to preserve important customer/client relationships for future business
  • Inventory control
    • Take a full inventory and secure it as much as possible. Any perishable inventory that can’t be sold could be donated and listed as a charitable contribution for taxes.
  • New markets
    • Determine if your business can move any product or services online, or if this current environment offers any opportunities for new revenue streams.

The goal is to improve the company’s overall cash outflow to preserve cash in the bank and extend the company’s ability to survive.


  • Talk to your employees
    • Do they know and are they following new health and safety guidelines? Are any of them able/willing to reduce hours voluntarily? How can they use technology to increase productivity, especially in this new environment?
  • Talk to your customers
    • Their needs have changed, what can you do to meet those needs? Look for new opportunities, markets and solutions. How can use you technology, including social media and other digital platforms, to engage and attract customers.
  • Talk to your lenders and landlord
    • Be realistic about the current situation. Can you defer, extend or lower payments in exchange for a longer loan or lease term or balloon payment later?
  • Talk to industry colleagues
    • What are they doing that seems to be helping in the current situation? Crowd-sourcing solutions may be helpful.

Your Business in Challenging Times: Controlling Your Cash Flow


a. Analyze

i. What business are you in?

ii. What products or services do you offer?

iii. What do you do best?

iv. What should you focus on?

v. Look at your business from your customers view

b. Profit margins per segment, department or product

i. Check your margins for each product separately; look for products that aren’t profitable and rob profits from others

ii. Get rid of unprofitable segments, departments or products; clean house -they take time and money away from your business and affect your customers’ view of your business.

iii. Review employee structure -consider cutting hours or jobs; hard to do, but sometimes necessary for your business’ survival

iv. Use roving CFO’s and temporary help as an alternative to full-time or part-time help you would have to pay regularly even during slow times

Question: How do I close a business?

Making the decision

While every aspiring business owner starts a new enterprise with dreams of success and growth, it’s wise to know how your small business ownership story may end before you begin. When and how you plan to exit can make a big difference in how you manage your new company throughout its life. Closing a business need not be a negative experience. It can mean new opportunities, a long-awaited retirement or the chance to gear down as an employee for someone else, leaving the management and ownership challenges to your employer. Or, a business closure can be the result of less pleasant situations involving the health of the owner, an economic downturn or increased competition. Whatever the reason, being prepared for a closure with a sound exit strategy ensures you can enjoy business ownership knowing that if an exit becomes necessary, you’ll be ready. When the time comes, you’ll have several options.

How do you know it’s time?

There are several warning signs that may indicate to you it’s time to change or close your business. One is if your debt-to-asset ratio is on the rise. Every business occasionally has to borrow money to purchase equipment or other assets. However, if your debt as a percentage of your assets is consistently on the increase, you could become over-leveraged. Some experts say the magic number is 50 percent. Likewise, a rising level of debt-to-shareholder-equity indicates that a company’s leverage is increasing. While a wise use of leverage is a part of standard business practice, the greater your leverage, the more unstable your business and the less equity you maintain in the company. Another red flag is when you are losing money in ever-increasing amounts. Showing a tax loss is not necessarily a devastating blow, but if your company is losing money in “real terms,” you may have a problem. It’s not uncommon for businesses to lose some money in their early years, but if those losses increase rather than decrease in time, you may not be able to overcome them. Another sign is when your inventory turns over more slowly as time passes. If items remain on your shelves too long, you may be heading for trouble. And, if you’re having trouble raising money for your business, it may be a sign that things are going as well as you’d like to think. Your banker may be attempting to help you see the writing on the wall and stay out of deeper trouble. The final sign—and some might say the most important one—that you may need to consider transitioning the business is when you stop having fun running it. You must enjoy what you’re doing, or you will resent the enormous sacrifices that business ownership demands. If you’re finding it hard to go “to the shop” every day, then you might want to reflect on your future with the business. Life is too short to spend it doing something you don’t enjoy.

So, what are your choices?

One is to pass the business to children or other family members. Or, you may want to sell the company. You could choose to liquidate it and sell the business assets. Or, in the worst-case scenario, you could end up filing for bankruptcy to deal with substantial debt. As you plan your strategy, consider how what you plan to do tomorrow affects your business today. For instance, you may want to hand the company off to a family member, but is that person qualified? Does she need training? Does he have the interests and innate abilities to be successful? Will you truly be able to hand the reins over to someone in the family without feeling as if you need to maintain some control? If your plan is to sell the company, you will want to take steps to constantly enhance the value of the company in terms of facilities, assets and networks. Selling to a partner or even a competitor who already has systems in place might mean you want to put your investment in product lines and increasing the customer base.

Preparing from the beginning

like most things in life, timing is everything. Remember that you opened the door to your business so you could have the independence, autonomy and pure enjoyment that come from being your own boss. The day that business ownership ceases to be a pleasurable experience (even with its innate challenges) is the day you should begin your exit strategy. Starting your business wasn’t an easy process. But as challenging as that was, exiting may be even more so. It will depend on whether or not there is a market for the company and whether or not the price that the owner believes to be fair is considered fair in the marketplace. This, of course, puts a great deal of emphasis on the valuation of the business prior to a sale. Since there are many approaches to valuing a business, it should be done in a way that is fair to both buyer and seller. From your first day of business, bookkeeping should be clear, consistent and comprehensive. Your records should be something you’d be proud to show to a prospective buyer. With a good set of books in hands, valuation is much easier. Be wary of undervaluing the business—a common mistake. An important element of your exit strategy should be your personal plans. Give serious thought to the first day you awake and don’t have to report to the shop for work. How will you feel? What will you do? Chances are the separation will be a gradual one that involves training and transitioning of intellectual capital. In some cases, if you particularly excel at one facet of the business and would enjoy continuing to perform that function, the new owner might welcome your experience in that role. To avoid confusion and bad feelings, negotiate an arrangement that clearly delineates where your duties end and the new owner’s begin. If you intend to keep the business until you literally expire while working the counter, make it simple for your heirs and employees to continue through a transition. Insure the company and its assets sufficiently to function while the valuation and final disposition of the company are settled. Although planning an exit strategy is important and should be as specific as possible, remember to stay flexible. Shifts in the market or in the community, changes in your personal goals, family situation or health or even the appearance of a better opportunity could change your strategy and timing. Much like keeping your home presentable when it’s on the market, managing your business everyday as if you are preparing to sell it will guarantee you are ready to seize the right opportunity at the right time.

The nuts and bolts

If you decide to sell or close your business—just as when you opened its doors—there is paperwork and there are certain procedures you must follow. The process can take anywhere from one week to several months or years, depending on the business size, its complexity and what you plan to do with it. If you have partners, the process may take longer. Your first step is to vote to close the business. If you are a sole proprietor, this step is easy. There is only one vote, and it’s yours. There are others with whom you might want to consult, such as a spouse or other family member, but in the end, you must make the decision alone. If you have been doing business as a corporation, limited liability company (LLC) or partnership, you and your business associates must agree to dissolve the entity by following either the procedures set out in your organizational documents or the rules set out in the state’s business statutes. Usually, these rules require at least a majority of the owners to agree on dissolution, but they could require a two-thirds majority or even unanimous vote. Make sure you record your decision with a resolution in the minutes of a meeting or with a written consent form. If you have been doing business as a corporation or LLC, you will need to officially dissolve your entity so that you are no longer liable for business taxes or filings. Officially dissolving your business also puts creditors on notice that your entity can no longer incur business debts.


Necessary forms will indicate the disposition of your company’s debts and liabilities, how the business assets will be distributed and how you and your co-shareholders elected to dissolve your business. For Washington residents, the forms you need to complete your dissolution of a company can be found on the Washington Secretary of State’s website at and the universal Washington State business access site For-profit corporations need to complete the following: Articles of Dissolution by Voluntary Action, Request for Termination and Resolution to Dissolve. LLCs must complete Articles of Termination for a Limited Liability Corporation. Limited partnerships also require the Certificate of Cancellation of Limited Partnership, and Limited Liability Partnerships require the Notice of Withdrawal for a Limited Liability Partnership. Of course, there are some federal forms you will need to complete as well. If you are a sole proprietor, this includes Schedule C: Profit or Loss from Business and Schedule SE: Self-Employment Tax. If you sell any of your assets, you will need to complete Form 4797: Sale of Business Property. If you sell the business, you’ll need to submit Form 8594: Asset Acquisition Statement Under Section 1060. Form 1099-MISC: Miscellaneous Income is required for each person to whom you paid at least $600 for services. If you’re required to remit excise taxes to the IRS, you will need to submit Form 720: Terminal Operator Report with your final tax return. For businesses with employees, two forms are required: Form 940: Employer’s Annual Federal Unemployment Tax Return and Form 941: Employer’s Quarterly Federal Tax Return. These are due in the quarter in which you pay your employee’s for the last time. You should also provide W-2 forms to your employees for that calendar year. Finally, you are required to file Form W-3: Transmittal of Income and Tax Statements. Most of the federal forms can be found on the IRS site at

More forms and closing details

You will need to submit forms to the state of Washington regarding sales tax and pay the amount owned. Washington State Department of Revenue is You’ll need to notify your local government office that your business is closing since you hold a local business license. Since each community or county is different, check to see if there are other forms to file or procedures to implement to complete your closure. As one final protection from liability, you will want to put an announcement in your local media that you are closing or selling your business. This will ensure you are not held accountable for any future acts by a business with the same name. Pay all of your bills, and request letters from your suppliers indicating that you have paid in full. And if you have any outstanding receivables, you’ll want to collect on those before you close the business. It’s much harder to do after you close the doors. If you aren’t successful in collecting those accounts, weigh the cost of legal action with the amount you are owed before pursuing.

Washington Small Business Development Center

Supplied in cooperation with the Missouri Small Business & Technology Development Centers

 Washington State

WA state small business guide chapter on ‘closing your  The guide gives a comprehensive list of who must be contacted depending on the industry.


Close or Sell Your Business includes information on bankruptcy and liquidation.


Closing Your Business Checklist with links to various forms that might need to be completed.

One minute video from the IRS with an overview of what must be done.

The page also has information to help business owners who are declaring bankruptcy, selling their business and terminating retirement plans. For easy access, they can reach the page at

How to close a sole proprietorship: fact sheet and e-poster, (Spanish version)

How to close a partnership: fact sheet and e-poster, (Spanish version)

How to close a corporation: fact sheet and e-poster, (Spanish version)

Non Governmental Resources

QuickBooks Guide How to close a business: A 10-step guide for small business owners


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Contact Washington SBDC

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