How to liquidate a business

Selling or liquidating a business is not always a cut and dried proposal. With small businesses, liquidating is almost as simple as selling a car or house. With larger businesses there are more factors to consider. Since no two businesses are the same, there is no all-purpose skeleton key that answers every question about ways to liquidate a business. Although no quick-fix answer exists, there are some general guidelines that when followed make things run smoother.

1. Have an audited financial statement done by a quality CPA firm. The biggest factor that overlooked in selling businesses is accounting. If you can’t show that you made money on paper, the potential buyer will not be so enthusiastic about purchasing your business.
2. One you have a good financial audit, then is the time to decide your options. The audit brings clarity to the decision making process. You will then see what is in your best interest, whether buying, selling, expanding or waiting.
3. Assemble a good quality team. If you are a small business owner, then select people are experienced with such transactions. If you are a medium to large company, select people who are experienced in making such deals, and know your business. You don’t need a surgeon to deal with cuts and you don’t need a general practitioner to perform a radical mastectomy. Since for many people, selling a business is a once in a lifetime event an experienced team can prevent many setbacks and heartaches. If you go to discountinvestmentbanker.com, you will obtain the quality of service you pay for.
4. Recognize that the potential purchaser will have their team, complete with lawyers, accountants and specialists to scrutinize your business.
5. Check the credentials of all the people on ‘your liquidation team’. If you do not feel comfortable with them, then do not hire them. Since the liquidation process can be emotional and stressful, it is important to be surrounded by people who are experienced that you like and feel comfortable with.

Once you decide to liquidate, there are still decisions to consider. Will you be selling all or only a portion of the company? You may be able to obtain your financial goals with only selling a portion of the company or allowing it to go public. These are the kinds of decisions a team can help you decide. There is also the matter of the timing of the liquidation and the type of company you are selling. Products that are popular or intellectual property oriented need to be approached differently than products which are service or manufacturing oriented. Each type of property has its own challenges and necessary timing.

On the bright side, although the home finance market has experienced difficulties, loans continue being made regarding the purchase of businesses. With the increased awareness of the global market, there are potential business purchasers located around the globe. This means that although no one in Kansas City wants to buy your business, there may be potential buyers in London or Calcutta. With this in mind, it behooves business owners to advertise far and wide when they are open to selling their business.