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How to Help a Failed Business (in 4 simple steps!)

How to Help a Failed Business

By Jamie Waggoner

It is a fact of life that most small businesses fail.

As a tax professional, you will see up close and personal what a failed business looks like, and the messes it can create.

failed business & disappointment

What can you do to help a tax client whose business has failed?

4 Simple Steps To Help A Failed Business

>Empathize

First of all, your client with a failed business needs empathy, they are going through a world of hurt and need someone to tell them, “I understand, I have been there.

empathize with failed business

This is a time when your client is at their most vulnerable and you don’t want to make their day worse.

Just listening and empathizing with the person is the first step.

Check List

Next, be practical and provide a check list for your business client on how and what to do about closing their business.

They need your guidance to help close their business properly.

strategize with failed business

You are there to make sure nothing else goes wrong especially financially because your client has already lost a lot.

If you don’t dissolve the corporation properly and do other closing steps, for example, it can come back to haunt the business owner with a bunch of more letters and penalties.

failed business help in 4 steps

You need to have a checklist on hand for helping someone close a business.

You also can consider charging for this as a service if you do the work of fulfilling the checklist.

Making the Most of the Loss

Taxes have so many elements of “reverse psychology.”

For instance, in taxes, if you lose money, it’s actually a good thing.

failed business or learning lessons?

Because that loss could deduct against your other income and reduce your tax.

If someone just lost a lot of money on a failed business, they may be wanting to “forget about it.”

But you, as the tax professional, should be hunting for ways to use that loss to their advantage.

A Net Operating Loss (NOL) is one possible method for turning a loss into a good thing.

Death Is a Part of Life

No one wants to go through the horror of a failed business, but it happens all the time.

As a tax preparer, it is your job to be there for your client when something like this happens.

not all failures are the end

You will be there to assess the damages and make sure more damage doesn’t come about on your watch.

You must be the kind of tax professional who’s very serious about your craft if you’re reading this article.

If that’s you, are you already a member of the Business Tax Verified Training Program with CPA Adam Shay?

That’s the new comprehensive training program from Pronto Tax School where it shows you all kinds of tips and tricks for working with corporation, S corporation, and LLC tax returns.

That training program is not for everyone because it’s more advanced.

But if you want to work with business owner tax clients it will save you a lot of money and hassle.  Check it out now.


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How to Help a Failed Business (in 4 simple steps!)