For whatever reason, you find yourself standing on the precipice of a new venture. Your old business has to be liquidated and while this can be a sad moment, it can also be a hopeful one, freeing you up to embark on new adventures.
6 Things You Need To Know While Liquidating Your Business
However, first, you have to wind everything up which can be a little overwhelming. There are a few methods you can use to go about selling off everything, depending on how much time and effort you need to put into it.
Here are some tips that can help you successfully liquidate your business.
Identify and Prepare Your Assets
The first thing you need to do is figure out what exactly you need to unload. So, start off by identifying your assets and making a list of everything you need to get rid of.
There’s probably a lot more than you thought. So remember to include the obvious things like business equipment, office furniture, and vehicles. But also, don’t forget to resolve any security deposits you have with landlords, utilities, or taxing agencies.
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Plus, check to see if you can get prepaid insurance premiums refunded to you. Don’t miss out on the extra cash here!
Donate Assets for Tax Benefits
While it may make sense to sell some things, it doesn’t make sense to try and sell everything.
Some goods just won’t be worth much in the secondary retail sector after you’ve already used them and weathered them through the years. As such, it might make sense to donate things to charities and other organizations that need them.
As an added benefit to doing good, you’ll also see tax benefits that can save you tons of money and fees. So consider this option in your arsenal of liquidation techniques.
Assign Value to Your Assets
There are many available options to consider to get the liquidity you need from your assets. It can make sense to conduct an auction or just to liquidate them directly.
Regardless you’ll need to be able to assign value to everything you have and determine how much each individual item is worth. Don’t skip this step, as it can unearth hidden gold or let you know what’s not worth focusing on.
Basically, your decisions for getting rid of things will tie into their street value, meaning you should assess the state of your assets, their nature, their quality, the time you have to dispose of them, as well as a myriad of other factors that will vary and change based on what you’re selling.
Repair Items to Get Maximum Price
Sometimes you have to spend money to make money. It’s easy to just throw things out but sometimes a bit of elbow grease or a clean-up can pay off massively.
These minor repairs and fixes can be relatively cost-efficient while also significantly boosting the sale price of some of your goods. Do this so that you can get the best price on your final sale.
Obtain Premium Insurance Premiums Refunded
Check your insurance policy. It’s filled with legalese but there might be something in the policy and conditions about employees’ compensation premiums and liability premiums.
Take a close eye through all the insurance policies you have, possibly even enlisting a lawyer if there’s a significant amount at play.
Remember that businesses typically provide employees’ compensation way ahead of time-based on payroll estimates, meaning you might be paying more than you’ll actually end up needing or spending in this final time before you shut down and wind up activities.
Don’t be nervous. Insurance carriers in this field are accustomed to adjusting their accounts each year to return any overpaid money, so it shouldn’t be any hassle for them to handle the financial hoops that you’ll throw with your business closing.
If you read everything carefully and check your financial statements for accuracy, you’ll likely find that you can get a refund with no issue at all. And remember, even if it’s a little amount, that money can be insanely helpful in getting you started on your next venture.
Hire a Professional Liquidation Company
If you just have too many assets and the whole process is overly time-consuming, confusing or difficult, consider pulling in a company well-versed in this area. The time and effort it saves could be well worth the cost, especially remembering the age-old adage that time is money.
Hire such a company and they’ll optimize the whole process, get you the best value and make the whole process flow as smoothly as butter.
Liquidating business assets is a difficult task. The majority of the business owner’s lifetime savings may be tied up in inventory, making it absolutely vital that you’re able to convert this stock into valuable cash.
The tips mentioned above will definitely help you get started in this process and beyond and will contribute to your skill for handling the liquidation process smoothly.
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