How to Liquidate a Business

There are several reasons why a person would choose to liquidate a business. It could be you are ready to retire or that you plan to change locations. Whatever the reason, there are few things that you need to do in order to liquidate a business.

Difficulty:

Moderate

Instructions

1. Value your furniture, fixtures and equipment. Everything that is in your business has a value regardless of how old it is. You need to know what the current value is for these things. Your CPA can help you assess the value of items that have depreciated.

2. Cease ordering new inventory from suppliers once you know that you will be liquidating your business. Your goal is to get rid of everything in the business, not bring on additional inventory.

3. Return items to suppliers. Call your suppliers and find out what can be returned to them. Some suppliers will pick up the product and refund the money to the company. You must check with your suppliers on their return policy. Some suppliers will only issue a credit rather than giving a monetary refund to you.

4. Sell your assets in order to liquidate a business. Depending on the amount of time you plan to spend on the liquidation process, you may be able to get full market value for your entire inventory. If you are in a hurry to liquidate the business, discount your assets to sell them more quickly.

5. Advertise the liquidation. Post signs inside and outside of the business to let customers know that you are liquidating your business. You can also advertise in a newspaper or ask for a press release to be printed.

6. Protect your assets. You need to consider how your employees and customers will react to the news that you are liquidating your business. It is possible that disgruntled staff and clients will take some of your assets as compensation they feel they deserve. You can protect your assets by collecting keys from employees and installing a camera system.

7. Hire a company. One way to liquidate your business is to hire a liquidation company. The company comes in and values your assets, advertises the liquidation and completes the process for you. In return, they get their set percentage of the profit.