A Love Story
Starting a business is a labor of love, a commitment comparable to the likes of getting married. A sure risk, you put your name and credibility behind your best attempt at a business plan and hope for the best. You began with a vision, a passion and invest years of hard work and dedication. Fortunately or unfortunately, the time has finally come to say goodbye.
Whether you’re selling your business or closing its doors, like a divorce, things can get pretty hairy. The small, simple mistakes many business owners make getting lost in the big picture of moving on are often hardest on their pockets. Particularly, loose ends left with creditors and service providers can wreak havoc on your bank account long after your doors have closed.
In business, as in love, going unprotected can come back to bite you in the ‘you know where.’
Protect Your Name
The most ridiculous mistake made by business owners is neglecting to contact their creditors and credit bureaus to notify them of a change in ownership when selling a business. Especially, if you have signed a personal guarantee, you NEED to make sure your name and personal liability is relieved before walking away. This concept seems painfully obvious but is a detail often overlooked until you get that special phone call or letter. If this applies to you contact all three credit bureaus, preferably in writing:
Experian 1-888-397-3742 Equifax 1-888-766-0008 TransUnion 1-800-916-8800
Each bureau has its own method of reporting.
Cancel Your Accounts
Would you sell your house and keep the utilities in your name? How about move out of your apartment in the middle of your lease? Assuming your answer is no (I’m hoping) then why do business owners get lazy about cancelling accounts when they close their businesses? Something as basic as paying attention to contract dates and billing cycles can save a huge amount of money and headache in the end.
If your payment processing company bills your monthly fees on the first of the month, don’t cancel on the third and pay for a month of services for a closed business. Or better yet, if you are being charged a large fee to cancel your contract try to determine if it’s more moneywise to just pay through the end of your lease. If you are leasing terminals or processing machines, don’t just send back the equipment and call it a day; companies will continue to charge you until you cancel your account, again, preferably in writing!
It is recommended to call your processor directly to cancel your merchant account. Although calling your provider is a good place to start, you need to call each credit card you accept directly to cancel. If your business takes American Express or Discover it’s a good idea to call them directly to verify your account has been closed.
It’s a dog eat dog world out there and so many companies will conveniently leave out little gems of information that can put a dent in your retirement fund. Some service providers, for example, will charge closure fees that can cost you an “estimated percentage” of the money they are losing by your cancelling a contract. Another reason it may be wiser to keep your account open for the duration of the contract.
Here’s a doozy: “Is there anything else I have to do to close my account?” Sounds simple huh? Then why don’t business owners ask that question!! The system, especially in the world of credit cards, and processing is a complex maze – one that can easily snag your money. Don’t get so caught up in the excitement of your new found freedom to let these trivial things rob you. Walk away with your hard-earned money and most importantly, your dignity.