Whether you’re permanently closing your doors, renovating your existing location or moving to a new location, carrying too much inventory, or need to raise cash to pay your creditors, at some point you might need to consider liquidating your business or inventory.
Depending on your particular reasons and circumstances for liquidating and your timeline, you might or might not be able to get full value for your assets and inventory.
Here are some strategies to get the most value for your assets:
1. Clean House
Stop ordering inventory, and if possible, return any new items to suppliers, manufacturers, or distributors. Be sure to check the return policy outlined in your contracts.
You can sell your inventory at a discount in a “liquidation sale”. Use low-cost methods to advertise your liquidation sale, such as posting a notice on your website, putting signs up on your premises, placing a notice in your local paper, or using word-of-mouth.
2. Valuate What’s Left
Take an inventory of all your remaining assets and assign a value to everything, including all fixtures, machinery, equipment, furniture, and vehicles. If you aren’t sure what the current value is (especially on capital assets that depreciate over time), you can contact an accountant, broker, or business valuator for assistance.
3. Hold an Auction
Consider hiring an auctioneer or a liquidation company to auction off your inventory. The company would value your assets, advertise the liquidation, and sell your inventory, in return for a pre-determined percentage of the profit.
Make Sure You Don’t Have Any Outstanding Contractual Obligations
Check all of the agreements you signed for your marketing campaigns, such as ad insertions in trade magazines or newspapers, or radio spots.