This post was co-written by Lynn Weinstein and Natalie Burclaff, Business Reference Librarians in the Science, Technology, and Business Division.
The COVID-19 pandemic has created an uncertain economic future for many small businesses. Yelp, the online review platform, recently released its September 2020 Local Economic Impact Report. It indicates that temporary closures are lower than in April and May, as restrictions have shifted in many municipalities. However, 60% of businesses, which includes more than just small businesses, have permanently closed, with numbers continuing to rise. A July 2020 poll by the U.S. Chamber of Commerce, a business advocacy organization, found that 70% of small business owners are worried about finances due to temporary closures and 58% are worried about having to permanently close their businesses. While having an exit plan can seem pessimistic, it can be helpful to consider options.
Exiting a business can refer to a variety of situations, such as selling a business to a third party or closing a business at a loss. Exits can also happen by transferring ownership to a relative or member of your management team or by distributing ownership in shares to your employees. Mergers involve agreements to combine your company with another company. Finally, liquidation is selling pieces of your company which may be worth more than the whole. Business exits aren’t failures. In these unprecedented times, business owners in many industries have been forced to close due to conditions out of their control. The unpredictable nature of this pandemic economy means that some exit options like selling at a profit or merging a company are not feasible.
Our Small Business Hub research guide has a section titled “Exit Your Business” that highlights some resources and useful search strategies and includes a section on COVID-19 resources on its introduction page. The Small Business Administration also has a business guide “Sell or Close Your Business” on how to create a thorough plan to transfer ownership, sell, or close your business.
If you have questions on researching exit strategies, you can submit a question to us through Ask-A-Librarian.