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Business Liquidation Basics

Understand business liquidation basics

By Carol Francois
Review your financial statements to determine if you have overstock inventory. These materials can be sold to improve the cash flow of your business and save in storage costs. Run a detailed inventory report and identify exactly what materials should be included in the business liquidation.

Investigate the quality and overall condition of the surplus inventory and determine what items are suitable for sale. Make a list of these items and determine your cost. This is the minimum price you can accept without losing money on the liquidation sale. Calculate a second value with minimal profit margin to help you during negotiations. Follow the three steps below to learn more about business liquidation basics.

1. Identify business liquidation services firms.

2. Locate business liquidation consultants.

3. Research business liquidation.

 

Look for business liquidation firms

Research business liquidation firms for your industry or type of good. Talk with business associates and colleagues to determine the local reputation of business liquidation services. Read the information provided on the websites for these firms to help determine if they have sufficient skill to assist.
Try: Schedule meetings with business liquidation solution companies to come and appraise the value of your goods and issue a quotation for their services. The Hilco Organization, Power Retailing and Liquidity Services are well known firms that specialize in business liquidation services.

Hire business liquidation professionals

Determine the size and scope of the surplus inventory to determine if business liquidation services are required. Business closure due to retirement, sudden illness or death typically requires the services of a business liquidation consultant. They can appraise the value of the goods and arrange for the sale and distribution of materials.
Try: Review proposals from at least three different firms before selecting one. Look at the price, level of service, timeliness and reputation. Ask for and follow up on references from prior customers to confirm the level of service provided. Quitting Business and NW Merchandisers are both business liquidation service providers who can assist you.

Read about business liquidation

Increase your knowledge of business liquidation by reading books and publications on this subject. The time invested will be well spent in discussions about inventory overruns, excess goods and the effectiveness of business liquidation services with your accounting services provider. Look at appropriate stock levels for your type of business and work with the inventory manager to keep the values at the appropriate levels.
Try: Select books to increase your understanding of this industry. There are many techniques used to increase the value of a business liquidation that can be completed without outside consultants. Read Liquidation Biz to gain further understanding of this industry. Life after Liquidation addresses the impact on the business owner. Learning from others mistakes is a great way to avoid business liquidation.

 

  • Reduce your risk of business liquidation by closely monitoring your stock levels and avoiding any excess inventory. Reduce production to ensure stock levels are at the minimal level possible for customer satisfaction.

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