How To Liquidate A Business To Recoup Losses Efficiently

Liquidation is a stressful time for every business owner. If your revenue cycle is failing, you can run out of cash flow and bring the business to a halt. As a business owner, perhaps you’re looking to get out while you can. Maybe you’ve been forced into bankruptcy. You have to close your business and sell your assets to recoup your losses. To add insult to injury, liquidation is often a costly process. However, there are steps that you can take to make sure you get the most money possible from the liquidation process. In this article, will discuss how to liquidate a business efficiently.

Speak With Your Lawyer

Before you start liquidating your business, take time to discuss matters with your lawyer. Although it may be tempting to liquidate quickly, you need to address this process thoroughly. Your lawyer will be able to guide you through the liquidation process. This is lifesaving information because there are several liquidation procedures. You need to know what to do based on whether your company is solvent or insolvent. If you owe money to creditors, your lawyer will help you declare your intention to liquidate. The best start to liquidating your business effectively is to make a game plan with your lawyer.

Make A List Of Your Assets

The next step to effectively liquidate your business is to make a list of your assets. Business owners typically think of equipment during this step, but you may have other assets as well. You might have to become a forensic accountant during this time. Check your inventory for everything of value. It is important to be as detailed as possible with your list. Take pictures, check for insurance, record serial numbers, and write down a detailed description for each asset. The more thorough you are, the more money you will be able to recoup. An underutilized method of improving asset value is to clean everything. Try to make your assets look as new as possible to appeal to buyers. Detailed lists will help you liquidate your business quickly and effectively.

Appraise Your Assets

To efficiently liquidate your business, you must appraise your assets. Asset appraisal helps you find out how much money you can recoup. Many business owners feel that hiring an appraiser is a cost they cannot afford. In truth, you will lose more money by selling your assets carelessly. Hiring an appraiser can also help you to determine whether it may be more profitable to sell certain items on your own. With liquidation procedures, most assets are sold 20% below their retail value. Having an appraiser can help you improve those margins. Carefully consider the cost of the appraiser to the value of your potential sale. This is an underrated step for liquidating your business.

Find A Buyer

Finding the right buyer will help expedite the liquidation process when closing a business. Even if you have several assets, they aren’t worth much if no one wants to buy them. Finding the right buyer will make sure you effectively liquidate your business. Reach out to other businesses to see if they are interested in your assets. Ask your employees if there is anything that they may want to purchase. In an ideal situation, you may find someone interested in taking your assets to start their own business. You can also look at auctions to sell your assets. Auctions may sell your assets piece by piece or wholesale. Keep in mind that you may not receive the appraised value at auctions. To effectively liquidate your business, compare speed and value when finding a buyer.

Settle Your Debts

The final step you need to liquidate your business is to settle your debts. After selling all your assets and closing your business, creditors will take what they are owed. You can discuss payment options with creditors. Depending on your circumstances, you may choose to offer your assets up directly. However, this may not be the best course of action. You may also be able to pay off debts with money earned through selling assets. You also need to consider any appraisal, legal, and auction fees. Finalize all payments accordingly to finish liquidating your business.

By following these steps, you’ve learned how to liquidate a business. Hopefully, you will never have to liquidate. Should you find yourself in this position, make sure you consult your lawyer, make a list of your assets, appraise your asset, find a buyer, and settle of your debts. If you follow these steps, you will efficiently liquidate your business.