Imagine this: You've just had an amazing, much-needed vacation. You're recharged, and ready to go back to work. You get to the airport and find that your flight has been canceled--because the airline has gone out of business.
That's the situation for passengers of Wow Air, the Icelandic low-cost airline company that abruptly ceased operations on Thursday. The money those passengers spent on their tickets is likely gone, and they'll now have to buy new tickets at higher prices to get home. And, any compensation they might eventually get won't cover lost days at work--so that vacation could become very costly indeed.
It's a drastic illustration of what happens when a business stops running. Customers who have put their faith and money into a product or service have a reasonable expectation of delivery. In the age of Kickstarter, our patience for delivery dates has been extended somewhat, but your customers still believe you'll make good on your promises.
When fitness watch company Pebble closed shop, its intellectual property was purchased by rival Fitbit. Pebble also made the decision to open-source its development tools, which allowed customers to create an online ecosystem that supported the existing hardware.
Wow Air can't do that. It's been operating at a loss for years, and struggled to find a buyer to help it remain operational. A last-ditch offer by the board reportedly failed to go through.
As a business owner, you always need to have an exit strategy. You never know when it might stop working out. Here are three guidelines to help you prepare for that unpleasant possibility:
1. Take a breather.
Dealing with the loss of your business can be an emotional experience akin to grief. You'll need to remain as calm as possible to deal with it all.
If you find yourself getting too overwhelmed, take a break and clear your head to get yourself back in check. I like to focus on my heartbeat and count to 100 beats. By the time I'm done, I've relaxed.
2. Be communicative.
Your initial instinct may be to hide away from everyone. That's probably the worst thing you could do. As soon as you have made the decision that you're indeed shutting down--with as much advance notice as possible--you should announce it.
A good message explains the timeline of what services are ceasing and when. It details who should contact for help during the transition. In short, it answers all the questions Wow Air customers probably have right now.
3. Have an "out."
You probably have a million other things on your mind during a business liquidation. It's easy to forget to ensure that you give your customers as much assistance as you can.
That includes calling your competitors before you make your announcement and ask for "transition rates" that you can provide in a FAQ, along with instructions on how to use their services. In the case of Wow Air, at least one airline has publicly given passengers "rescue fares" to get home inexpensively, with others likely to follow suit.
Whatever you do, by mentally preparing for the eventuality, you'll bring order to the chaos of a business closure.