For every thing there is a season, and a time to every purpose under heaven.

A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted.
Ecclesiastes 3:1-2

Most business owners, from the time they start up or take over a business, are consumed with cultivating their venture and watching it thrive.

There comes a time, though, whether by choice or necessity, that each of them will have to let go of the enterprise — sometimes by passing it on to younger members of the family, sometimes by selling it, and sometimes by simply closing up shop.

It can be an emotionally wrenching experience.

"It wasn't [hard] for me until the first day of the sale when the merchandise started zooming out the door," said Jere Bortzfield, who closed his family's Sayres, Scheid & Sweeton clothing store in downtown Lancaster in 1995.

Bortzfield's grandfather and father had both run the store, and he had worked there nearly 50 years, starting as a stock boy when he was 12.

It had become tough for a shop like his to compete with the department stores, Bortzfield said.

"Since I was the owner, if things didn't work out with a customer, the buck always stopped with me," Bortzfield recalled. "I said, 'This isn't worth it.' "

During a stockholders meeting, which included his mother and brother, the decision was made to close it up.

Making the decision wasn't difficult, Bortzfield said. But the process that followed was.

"I'll tell you the truth," he said. "At that time, the way things fell in place, I got so mad."

For one thing, he said, he was angry at Lancaster Newspapers, which, like most advertising venues, has a policy of requiring upfront payment for going-out-of-business-sale ads.

For another, he was angry at the city for making him write a check for a percentage of his inventory before allowing him to proceed with the sale.

"I hold no animosity toward anybody," Bortzfield said, "But it was an experience, a very trying experience."

Getting help
Business owners considering calling it quits are wise to turn to experts to help them assess their options, said Jeff Maddow, a certified public accountant who volunteers as a counselor for Lancaster SCORE and has his own consulting firm, Lancaster Acquisition and Divestiture Group LLC.

"Getting expert help very early on is very important," Maddow said. "The key, No. 1 thing is to make sure a competent attorney is involved and a consultant."

Business owners usually go through several stages before deciding to get out of business, he said.

If the business is struggling, they might first try to work themselves out of the problem.

If they don't have enough cash to make the changes necessary to turn the business around, they might look for a loan, take on a partner or turn over a portion of the ownership to a creditor.

If none of those avenues appear viable, they may come to the conclusion that their only opportunity is to either sell the business or simply close it up.

"It's very rare that they close up shop and walk away from it," Maddow said. "Why would they do that if they have an asset that can be sold?"

The process of selling a business is similar to buying one, but in reverse, Maddow said. It involves coming up with accurate cash-flow projections and putting a value on the business's assets.

"Knowing the cash flow of that business is critically important," he said. "You've got to analyze the cash flow and what the needs are."

A consultant and lawyer can help put together an offering package and work with the owner on finding prospective buyers. They'll also keep the owner focused on the process.

"A lot of the time, [the process] is not enjoyable for the seller," especially when the business represents a life's work, Maddow said. "Oftentimes, the seller knows who might be the best buyer, and I can be their intermediary."

That may very well be the business's competition, he said, which makes it critical for a lawyer to be involved to draw up an agreement to spell out what happens during negotiations to protect the seller from having employees hired away or having confidential information used against the business.

Many issues also come into play that require the assistance of a lawyer besides coming to an agreement with a buyer, Maddow said, especially if the business operates in more than one state.

For instance, there can be issues with leases, employee benefit plans, equipment-purchase agreements and other contractual obligations, he said.

"The worst thing is going into a transaction without an attorney having reviewed those things and having litigation afterward," Maddow said. "Attorneys have checklists and can cover all the terms and conditions."

Sometimes, the business won't sell because a buyer can't be found or negotiations break down over price or emotional issues.

"Some people look at the business as their earnings — that's the money they live on, and the money they sell it for is what will sustain them through retirement," Maddow said.

That may make the business worth more to them than someone else, he said, and may prompt them to continue running it rather than sell it.

Sometimes, the press of creditors or the expiration of a lease won't allow enough time for the sale of a business.

And sometimes, an owner such as Bortzfield simply wants to close the business rather than sell it.

Bortzfield opted to hire a liquidator to help conduct a going-out-of-business sale before closing the business and selling the building at 28 E. King St.

The building has since changed hands several times and now houses Annie Bailey's Irish Pub.

Bortzfield said he had contracts with several clothing suppliers, whom he immediately contacted, and they all agreed to cancel his orders.

He said he'd also advise anyone going out of business to notify the credit card companies before the sale so they don't become alarmed by a sudden surge of transactions and freeze the business's accounts.

Going-out-of-business sales are big events that draw a lot of customers, and some municipalities, including Lancaster and Lititz, require a special license to hold them.

Bortzfield said the liquidator guaranteed that the sale would recoup the cost of his inventory, and that proved to be correct, although the sale continued almost a month longer than planned.

The auction route
Some owners elect to liquidate their businesses by auction rather than prolonged sales.

"The liquidation route is chosen for a variety of reasons," said Steve Barr, an auctioneer and partner at Barr Davis Auctioneers in Gap.

"The location's lease may be expiring, and an auction is a way to get rid of everything in a day," he said. Or the business "may have been on the market for some time and doesn't sell."

Barr Davis, which also handles real estate, has sold everything from hardware stores to construction companies to food stores to kitchen manufacturers, Barr said. Its next business auction is Oct. 14 — for a small welding shop in Chester County.

The auction company handles the advertising and marketing, sending out notices to e-mail lists and posting the inventory on such Web sites as auctionzip.com.

"If there are [secured] creditors, we provide a 30-day advance written notice," Barr said.

Commissions on sales vary with the type and value of each item.

"Seldom does something not sell," he said.

Loose ends
Selling the business or selling out the inventory and equipment is not the end of the process. There are still loose ends to tie up.

"One thing one must realize is when the company doesn't exist anymore, there are still a lot of statements and reports that have to be filed," Maddow said.

It's important to make certain that all taxes are paid — payroll, state, local and federal.

Once that's taken care of, the owner can apply for a clearance certificate from the Pennsylvania Department of Revenue and ask the Internal Revenue Service to cancel the employer identification number.

If the business is registered with the state under a fictitious name, the owner can simply file an amendment form and identify the filing as a cancellation, according to the Pennsylvania Department of State.

All other types of business must first obtain clearance certificates showing they've complied with all the requirements of both the Department of Revenue and Department of Labor and Industries.

"That could take 18 months," Maddow said. "Just closing the doors is not the end."

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Dennis Larison is editor of the business section and can be reached by telephone at 291-8753 or by e-mail at dlarison@lnpnews.com.