4 Steps to Make Business Asset Liquidation a Breeze
How to get started with a liquidation
Okay okay, we know what you’re thinking – “liquidations, a breeze? Who are they kidding?” We know that an asset liquidation can be an extremely trying and stressful time, but we wanted to share a few things you can do to make the process easier. We know the process is difficult, closing your company legally is enough of a hassle, but we want to make sure that you recover the most money possible from your assets in order to pay back yourself and your creditors. The tips below will help you get a handle over all that you have to do and will give you a good place to start – which can sometimes be the hardest part.
1.Know what you want to sell
Depending on your industry it might be hard for you to determine exactly what you want to try and liquidate. There are three main types of assets that you will want to consider:
First, take a look at any inventory you have. Inventory refers to any finished goods that would be able to be directly sold to your customers. For example, a clothing store would consider inventory any shirts, pants, dresses and jackets on the rack or sitting in the back inventory.
Second, assess assets that are used in the production of inventory or other goods. This would include most machinery and heavy equipment that is used during the specific production process. An example would be the machines in a tool and die shop, or construction equipment used on a job site.
Third, consider assets that are valuable to your business but aren’t necessarily used in the production of final goods or services. For pretty much every company this will be your office furniture. Your furniture isn’t actually used to produce profits like other assets do. After all, your employees are much more productive sitting at desks, but your company would probably still profit if all your employees sat on the floor. You just wouldn’t have very happy employees.
After categorizing your items go through and make a comprehensive list of everything you plan on liquidating. Organize your list by types of equipment, rooms of your building, or whatever other way makes sense for your company.
2.Create descriptions and assign values
Once you’ve decided what you will be liquidating, write out descriptions for each asset and assign a dollar value to it. Including descriptions of each item with its past use and maintenance will give a buyer a better understanding of the working condition of each item and the care it received. You will also want to assign each item a dollar value. This can be done by consulting depreciation amounts on your balance sheet, ballparking estimates, or by hiring a professional appraiser. An appraiser will be able to tell you exactly what you should receive for each of your assets and will especially help with any heavy machinery and equipment.
3.Consider who you want to sell to
Heading into a liquidation you will want to make sure that you know who would be interested in purchasing your items. Again, this will vary depending on your industry. If you are in retail, your normal customers would probably love to buy up your inventory for a marked down price. If you are a tool and die shop, consider other shops in the area that may be interested in purchasing your equipment. Contact others who are in your relative area and industry to see if they would want to buy your assets.
4.Decide how you want to sell your assets
Again, this will depend on your industry. If you are in retail, your current customers would probably love to buy up your inventory in a mark down sale. Simply drop your prices and open your doors and people are sure to come flooding in. If you have larger items to sell that the general public most likely won’t be interested in, consider contacting an auction house or asset management company (like us) to help you sell off your property. Not only will it make your life easier, but the professionals will have their own experience to help make your sale the most successful it can be. Whether you choose a mark down sale, a general open house sale, or an auction, make sure that you inform the proper people. You want to make sure the people who would be willing to pay the most for your items know about your sale!
All in all, we hope that these tips have helped you get started in your business liquidation process. If we could emphasize anything else, we would highly recommend using a professional liquidation or asset management service. They will know what they are doing and will be able to guide you through everything. Afterall, they do this every day and will be able to bring you the most money possible from your liquidation.