How to shut down a small business?

I've spent the past 4 years operating a small website design business out of my home. Things started out promising, but the situation has been steadily declining. The business has a small amount of debt, which can be paid off fairly easily over the next few months. My biggest concern is my clients and how... show more I've spent the past 4 years operating a small website design business out of my home. Things started out promising, but the situation has been steadily declining.

The business has a small amount of debt, which can be paid off fairly easily over the next few months. My biggest concern is my clients and how to handle paperwork and such. I have a few clients who I am will to continue working with on a part-time basis, but I was wondering what is the best way to go about informing these clients of the change, as well as how to shut everything down without short-changing anyone.

Shutting down was a very difficult decision to make, advice from someone who has gone through a similar situation would be greatly appreciated.
Update: Sorry, it is structured as a sole proprietorship.
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