Once the decision has been made to close a business, the owners need to inform their customers, suppliers and creditors as soon as possible. The best method is to send a formal going out of business letter that contains any details the receiver should know.
There may be actions required such as collecting laundry from a cleaning establishment or a laptop from a computer repair business. It may also be necessary to remind customers to pay their outstanding balance. Even though the business is closing, and the owner is moving on to other endeavors, it is important to be professional in the way he or she closes their business.
A clear and simple business letter may give the reasons for closing the business, so suppliers and customers need not wonder what’s going on, but this is not essential. If the business is a franchise, and the owner plans to open his or her own business in the same line, it is recommended to clearly state this because owners will want to keep their regular clientele.
The letter also gives the owner a chance to thank customers and suppliers for their business and say good-by to any person or establishment that helped the business during its years of operation. The letter should be tailored to fit the circumstances of the business as well as the intended recipient.
It is more professional if customers and suppliers and anyone else who has been working closely with the business learn that the business is closing directly from the owner or manager, rather than by an Out of Business sign on the door. It may not be possible to send a business letter to all customers, but if they owe payments for goods or services, or if the business is still completing orders for them, a personal letter is recommended.
It is always a good idea to keep a friendly professional relationship with all customers and suppliers and terminate the business relationship on a positive note. The main things the letter must convey are:
• A professional end to the business relationship
• A thank-you for customer support
• A thank-you for the products and services of suppliers
• A plan of action for the partners, customers, and suppliers before the last day of business
• The exact closing date
Timing is important because the owner may want to announce a Going out of Business Sale, and customers need time to settle their accounts. If the owner plans to open another business, this is a good time to inform all customers and others about the opening date and location of the new business. It is recommended that the letter for customers be sent three weeks to a month before closing one business and opening another.
A different letter should be sent to suppliers. They may need 60 - 90 days’ notice to close all accounts. Also, the timing depends on the type of business. An auto repair shop will want all cars collected by their owners and a retail shop will want to have time to sell their entire remaining inventory.
Sample Going Out of Business Letter to a Customer
Here is a sample letter to a customer:
Owner’s Name
Owner’s Address
City, State, Zip Code
DATE
Customer’s Name
Customer’s Address
City, State, Zip Code
Dear Customer’s Name,
This letter is to inform you that Name of Company will be going out of business on DATE. We are having a Sale beginning on DATE in an effort to clear out our entire inventory. We’ll be offering large discounts on all items and hope you will come take advantage of these savings.
We thank you for being a loyal customer for the past 15 years that we have been in business. If you have any questions about the sale or anything else, I can be reached at 555-123-4567 or at Name@email.com.
Sincerely,
Owner or Manager’s signature
Name Printed
Title
Sample Going Out of Business Letter to a Supplier
Here is a sample letter to a supplier:
Name of Owner or Manager
Title
Name of Business
Address of Business
City, State, Zip Code
DATE
Name of Recipient
Title
Name of Company
Address of Company
City, State, Zip Code
Dear Name of Recipient,
This letter is to inform you that Name of Company will be closing on DATE. I’m sorry to inform you that we will no longer be placing orders with you. For the next 90 days, we plan to sort out all of our accounting records and pay your invoice in full.
We will immediately confirm the amount the amount we owe you and arrange a payment schedule.
I would like to take this opportunity to thank you for your past business and say that it was truly a pleasure working with you and your team. If you have any questions or concerns about the transition, I can be reached at 555-123-4567 or at Name@email.com.
Sincerely,
Owner’s Signature
Owner’s Name Printed
Owner’s title
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