Most businesses can be successfully liquidated for cash in a matter of weeks, and sometimes sooner. However, doing so requires excellent planning, strategic marketing, and a network that extends beyond a business’ existing customer base. Rarely are these conditions present when sellers attempt to liquidate a business themselves. Fortunately, there is an effective alternative.
The most common business liquidations include business inventory, furnishings, and equipment. Almost any business assets can be sold in this manner, including, for example: those of a manufacturing plant, distribution center, retail store, service business, restaurant, or any number of other businesses.
The faster assets are sold, the quicker expenses stop
Business liquidation is typically handled in one of three ways:
■ Business assets are sold to one buyer, usually at a substantial discount.
■ Assets are sold in an extended, liquidation sale process with ongoing discounting and multiple buyers.
■ A competitive auction is conducted, generating the highest prices the market will produce, relatively quickly. In fact, the U.S. Small Business Administration (SBA) says that an auction is “appropriate for most business assets.”
It can be especially risky for a business owner to attempt to broker assets on their own. Doing so can create two unique problems. The first is that true market value is seldom realized by soliciting random offers. To get true market value, buyers must be brought together collectively in a competitive bidding scenario. In other words, a professional auction. Secondly, brokering a portion of the business assets early reduces interest in what remains, because there is less volume of goods then being offered. This ultimately results in even less cash realized from the sale.
There are a number of essential steps required in any business or asset liquidation. These include:
1.) An accurate inventory is needed. A good starting point will be invoices or other business paperwork, which can be used to properly identify and provide specifications for goods to be sold.
2.) Assets should be appropriately prepared, sorted, and grouped. This is especially important when buyer inspection is required, and to enable suitable access for buyer load out. There are also elements of psychology utilized here, which can enhance the results.
3.) Goods to be sold need to be free of liens and encumbrances. This will be of concern to all buyers. If you are utilizing the services of a professional auction liquidation firm, they can help point you in the right direction.
4.) Your liquidation buyer pool is likely to extend beyond those customers your business may have had in the past. To reach these buyers will require a multi-pronged effort, with well thought out marketing.
5.) A predetermined, fixed schedule will be key to a successful business liquidation. Assets must all be sold and removed by a known date to prevent incurring additional fees and expenses. This is where an auction liquidation can be particularly helpful: you will control the sale date, and can make future plans accordingly.
A professional liquidation firm can help you address all of these requirements and more, some of which you might not anticipate.
The skills and expertise needed to successfully liquidate a business are entirely different from those required to operate a business. This is why most business owners tend to seek the guidance of a professional business liquidator to handle such a project.
A professional liquidation auction can bring true market value
In order to achieve true market value, successfully liquidating a business will almost always necessitate a professional auction. With an auction, buyers must compete against each other, and there is no price ceiling as there is with priced sales. There is also a known sale date, which gives you more control over the process. An auction liquidation can be scheduled, arranged, and conducted in a very short amount of time, further helping to eliminate expenses.
If you are considering a business liquidation, you’ll want to start as soon as possible. With an auction, virtually any business assets, including real estate, can all be sold for true market value.
To best determine your assets’ auction potential, simply contact professional auctioneers, Juris Auctions, today. They can help you quickly convert assets into cash from start to finish. This includes inventory, furnishings, and equipment, as well as real estate. A free property evaluation is available on request, without cost or obligation. To reach Juris Auctions, call 1-901-254-8200.