What are the first steps when you have to close your business suddenly?

Secure immediate income, communicate with clients, vendors, and lenders, handle debt, and take care of legal and administrative obligations. Always document every communication and decision.

Do I need to dissolve my LLC if my business closes due to an emergency?

Yes, you should file the proper dissolution paperwork with your state to avoid ongoing tax or legal obligations. Consult your Secretary of State or an attorney for specific steps.

Can I negotiate with creditors after closing my business?

Yes. Many lenders and vendors will work with you on payment plans, deferments, or settlements if you communicate early and honestly about your situation.

Emergency Business Shutdown Guide

Emergency Business Shutdown: What to Do When a Crisis Forces You to Close Your Business

If you found this article because you have an emergency that will likely close your business, I’m sorry you are facing this. Big Hugs.

When an unexpected crisis forces you to close your business, the experience can feel overwhelming. It’s hard to know where to start, what steps to take, and how to navigate the financial and legal aspects of shutting down. But you’re not alone—I’ve been through it, and I’m here to provide practical guidance and a free downloadable checklist to help you through this process.

When Mike fell off a ladder 18 feet on concrete in 2013, our business closed in that 3 second fall. I learned so much through the navigation of the immediate instant emergency, and the climb up into renewed entrepreneurship almost 9 years later. I had to figure it all out- but I’m going to tell you exactly what to do.

But before we talk about anything else, you need to breathe. You can do this. There is a checklist to help you. But please, take a deep breath and make sure that you are regularly taking a moment to breathe. Deal? Okay. Here we go. (Imagine I’m holding your hand if you need it)

🎥 Watch: What to Do When a Crisis Forces You to Close Your Business

In this short video, I share the steps I took — and wish I’d known — when an unexpected event closed our business overnight.

Emergency Business Shutdown Checklist

Step 1: Secure Immediate Income

Before making any decisions, ensure you have a source of income to cover personal expenses. This might mean taking on freelance work, selling existing inventory, or tapping into emergency savings. The goal is to stabilize your finances so you can manage the shutdown process without added stress.

Step 2: Communicate with Clients, Vendors, and Lenders

Once you’ve made the decision to close, transparency is key. You need to talk to everyone who you touch with your business. If you are not the owner, say a spouse was injured, make sure you have a power of attorney so you can access accounts, client lists, etc. Then you call and speak to everyone. Inform clients and customers, address outstanding contracts, and communicate with vendors about final payments or inventory returns. If you have loans or leases, reach out to lenders to discuss payment plans or settlement options. Keep notes, send confirmation emails, have excellent records of your communications and the agreements that have been reached.

Step 3: Handle Business Debt

Unresolved debt can create long-term financial challenges. Prioritize which debts to pay first—secured debts and essential contracts should take precedence. See who will take smaller payments, like the electric bill may accept half now and the other half in two weeks. Be creative, and DO NOT be afraid to ask for support, such as a grace period or to put payments at the end of the loan term. Negotiate with creditors where possible and explore options like structured repayment plans.

Step 4: Legal & Administrative Considerations

Do not overlook the regulatory and administrative business items. You may need to cancel business licenses, dissolve your LLC or corporation, and settle tax obligations. Be sure to check your state’s specific requirements and consult with a legal or financial professional if needed. Make sure you get these items addressed. And remember to keep copies of all business records for the time required, I hold ours at least seven years.

Step 5: Planning for the Future

It doesn’t feel like it now, or while you are going through it, but you will be stronger on the “other side.” It took 39 months to pay off the business debt, and the IRS lien on our house when we lost our business in 2013. We were focused on my husband’s rehabilitation journey, our family journey with the new normal, and figuring out our lives. We never contemplated a future business. But we were focused on the future. It may feel like you are drowning right now but keep at least one eye on the future- you will get through this. Shutting down a business doesn’t have to mean the end of your entrepreneurial journey forever. Take time to reflect on what you’ve learned, reassess your goals, and plan your next steps. Many successful entrepreneurs have rebuilt stronger businesses after setbacks.

Final Notes

Take it one step at a time—progress over perfection.
Reach out for help—there are support systems available for business owners.
This is not the end—many entrepreneurs rebuild and thrive after challenges.

I’ve created a free Emergency Business Shutdown Checklist to guide you through this process. No email required—just download it.

You are not alone. You can get through this. If you know someone facing this challenge, please share this resource with them.