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In today’s dynamic business environment you’re either Growing or Going…out of business that is! If you’re part of the latter contingent and have made the decision to get out of a business but are unable to transition your business internally or sell it as an intact entity, full or partial liquidation of assets may be an appropriate exit strategy. Asset liquidation can provide quick cash and assist in diversifying equity. However, before you terminate your lease, sell a key piece of equipment, or disconnect your utilities, make sure you have a well-thought-out plan.
Getting out of business successfully requires careful planning from start to finish. If you are looking at asset liquidation as a part of your exit strategy, consider incorporating the following recommendations into your plan to increase your chances for success.
1. Talk to your lawyer and accountant.
2. Establish the liquidation value of your assets; remember liquidation vs. retail value can differ substantially.
3. Identify the best venue and timetable to sell your assets.
4. Arrange the sale at the most appropriate location with an expert.
5. Use a non-recourse bill of sale.
Understanding and incorporating these steps into your exit plan will not only help you recover as much money as possible, they may also help you achieve the freedom needed to pursue new endeavors.
It is important to note that the recommendations discussed above are intended to serve as a general overview to assist with the asset liquidation process. It is not a substitute for case-specific advice that only your lawyer and/or accountant can provide. Also, depending on the situation and necessity of business divesture, the cooperation of creditors may need to be considered. Cover your bases and talk to the experts before liquidating any assets that may be in question.
Initiate the process by preparing a current inventory of your business assets. Include photographs, serial numbers and a brief description of the condition of each item if possible. A thorough inventory will save considerable time and expense as you navigate the sale process and can be invaluable if you are asked to provide documentation for creditors or the Internal Revenue Service.
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Liquidating your Business Assets Can be an Efficient and Prudent Exit Strategy
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