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Liquidation 101

There are many reasons why a small business owner might choose to liquidate his or her business assets – and not all of them are because of a failing business. An owner might simply need to get out of the business for personal or financial reasons. And if a buyer for the business isn’t on the horizon, as many owners interested in selling these days are discovering, liquidation could be the best option. 

Before deciding to liquidate, a business owner should attempt to make sure that liquidation would be profitable. The first thing you should do is assess your assets. Make a list of everything the business owns. Honestly consider whether older items will sell, and if not, consider making charitable donations for the tax deductions. Next, engage an equipment appraiser to help you determine the fair market value of your assets. Once you know the value of your assets, take into consideration the cost of selling. Will you have to pay storage fees for your equipment? What will you have to pay professionals helping you sell? Once you know your sales costs, subtract them from the total fair market value of your equipment, and make sure that your liquidation will be profitable. 

Then comes the actual sale of your assets. Consider whether you want to sell your assets yourself or hire a professional to help. Many owners interested in receiving a large number of bids on their equipment choose to hold an online auction. And keep in mind the timing of your sale. You’re the expert in your industry – is there a particular time of year when others in your industry would likely purchase the type of equipment you’re selling?

Liquidation sounds like a straightforward process, but there are actually a lot of intricacies and details to be considered. Consider hiring a professional to help so you know you’re selling your business assets in as profitable a way as possible. 

Present Value LLC is a nationwide appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value 

Additional Reading:

Equipment Auctions

To Sell or Not to Sell

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