Some small businesses quitting while they're still ahead

Wendy Whitaker says she and her husband Chris are done trying to weather the COVID-19 storm, and have decided to shut down their small business while it's still solvent.

The couple owns Mississippi Mills Musicworks, a musical equipment shop and music school in Almonte, Ont., where a "going out of business" sign now hangs in the window.

They're trying to sell off their remaining instruments before closing for good on Thursday.

I didn't want my business to turn into a detriment financially. We don't know what's ahead.- Wendy Whitaker, Mississippi Mills Musicworks

"We decided it would be better to wrap it up now and let the business go, which is sad, but it means we're walking away in pretty good shape to get involved in another adventure someday," Whitaker said.

In addition to offering one-on-one music lessons, Musicworks hosted open mic sessions for up-and-coming artists and staged performances at nearby nursing homes. But physical distancing rules have put an end to both those activities for the foreseeable future.

"For three years it's [been] absolutely amazing," Whitaker said. "But I didn't want my business to turn into a detriment financially. We don't know what's ahead, and we have four teenage girls. We just wanted to leave ourselves in a safe place to take care of our responsibilities."

Bracing for bankruptcies

Brian Doyle, a licensed insolvency trustee in Ottawa for 40 years and president of Doyle Salewski Inc., said he's bracing for a wave of filings like he's never seen before.

"I think they're going to be substantial because even before the pandemic there was a rising tide of insolvency filings," Doyle said. "We see substantial filings in Canada, including in Ontario and Quebec, throughout 2022."

‘The tide was rising’: Experts prepare for wave of bankruptcy filings as pandemic continues

5 years ago

Duration 1:17

Brian Doyle, licensed insolvency trustee with Doyle Salewski Inc., says the pandemic has pushed some Canadian families and businesses over the financial edge, leading to one week in March where his firm saw its highest ever number of insolvency filings.

Doyle said he's not surprised some small business owners are choosing to close shop rather than risk bankruptcy by holding out for an economic recovery that may not be right around the corner.

"When it comes back it's not going to come back full-blown," he said. "This will not be a V-shaped recovery. It's going to be more gradual because people are going to be changing their buying habits. That's the hallmark of a depression, not a recession."

While bankruptcy is one option for businesses big and small, Doyle points to other ways to get out from under debt including drafting a proposal to present to creditors.

"More people are finding their way out of debt without going bankrupt by paying a portion or all of their debt without interest over a period of five years, and that's worked out very well for them," Doyle said.

"Creditors are going to have to be patient and are going to have to work with their debtors who are not paying them. It's going to take some time to work everything out. Everybody is going to be understanding, hopefully."

Small business owners close up shop to head off financial loss

5 years ago

Duration 1:04

Wendy Whitaker, who owns Mississippi Mills Musicworks with her husband Chris, says they made the decision to close the business before the pandemic caused serious financial hardship.