Are you planning to shut the doors of your business? Before you go for a business auction, it is crucial to know how to liquidate the business assets so that you can recover the maximum amount possible. Here are a few steps that you can follow:
If the liquidation involves insolvency formally, you will need the services of an insolvency practitioner (IP) to help with the liquidation plan. The plan has to be accepted by a majority of the remaining creditors before the liquidation process can begin.
Take account of the Inventory
Even before you dispose of any assets, you should carefully document everything that you have. This information is needed to help you keep track of the assets. During the process, ensure that nothing is stolen or is missing. It is essential to satisfy the tax authorities as well as creditors who may want confirmation of the assets before disposing them.
Consider What to Sell and What to Not
Not all the assets may be worth selling. You might be better off donating the furniture which is not in the sellable condition. When you donate the low-value items, you will also get the tax-breaks while filing the returns. If you have items on credit, or lease with an option to buy, you will have to buy them first, and then resell to recover more money.
Assess the Value of Assets
You can get the value of the remaining assets when you attend liquidation auctions or visit business liquidation online sites. Intangible assets have to be dealt with separately as you may need to get in touch with the interested parties for better results. If you have a lot of assets to sell, you’ll need a qualified appraiser or liquidation company to help you with everything.
Choose the Best Type of Sale
Going with the best way to sell the assets will make a big difference in the final worth. Internet auctions have become popular, and they can reduce the costs significantly. Then there are public auctions and ‘closing down sales’ to liquidate the assets. But, the sale must be as short as possible to limit the overhead expenses, and you might have to wait for the proper time as well.
When you are organizing a sale, don’t forget to advertise. You should also choose the most suitable day for the buyers to make the most of the sale or auction.