The time may come to close your business. This can happen for a variety of reasons -- retirement, changing career path, or a poor performing business. If you are not able to sell your business and other succession strategies have failed, liquidating the assets may be the only remaining option. While this can be an incredibly stressful time, particularly if money is needed to pay creditors, it is important to take a methodical approach. Here is a checklist of items to consider during this process, based on recommendations from the Small Business Administration.
Prepare a List of Assets and Take Inventory
As you start the process of liquidation, take stock of everything that the business owns. Document the items thoroughly by describing the items, noting any reference numbers. Photographs of items can also be helpful.
Having this list will be helpful as you begin the process of selling the items. It can even help you figure if there is any value in selling the assets in the first place, and/or which items in particular have sufficient value to justify taking the time and energy to sell.
Be sure to include items such as intellectual property, contracts, or trade secrets. These can be more challenging to value, but an appraisal may be helpful in this regard.
Seek Professional Assistance
Once you have an idea of the scope of the items, it will likely be beneficial to seek professional help. There may be several professionals that could be useful. You may want to consult a lawyer, accountant, and possibly a liquidation professional. They can help you spot issues that you might not even recognize.
Obtain an Appraisal of the Assets
If you think the overall value of your assets merits the cost, obtain an appraisal of your items. Be sure to obtain a written appraisal from the appraiser. This can help as you begin to negotiate or sell the various items. Revisit your evaluation of whether the sale makes sense in light of the appraised value and what the costs of selling them will be.
Coordinate the Logistics of Your Sale
How you sell your items will likely depend on the nature of the items. Again, a liquidation professional may be helpful in determining how best to coordinate selling your items. Several different sales methods may be available, such as: negotiating with prospective buyers, turning over the assets to a dealer to sell on consignment, selling items online, a going out business sale, or an auction.
When and where you sell the items will also be important to the success of the sale, but will likely be dependent upon the method of sale that you choose. Make sure that the time and location are convenient both for the nature of the items that you are selling, and for the potential customers who would be interested in buying them. Selling the items where they are currently located may also save the cost of moving and storing the items.
Protect Yourself from Any Post-Sale Consequences
Include, as part of any sale, contract language covering yourself from any potential legal exposure arising out of the sale of the item. An attorney or other professional that you have worked with to sell your items can assist with preparing said contracts.