Article Written By: Clayton Arnold
There are many reasons why companies liquidate assets. More often than not, some companies need to sell off their assets to satisfy creditors when they are unable to pay their debts. However, liquidation doesn’t only happen in this situation. Sometimes, companies need additional capital to keep the business going. Or they simply don’t have a need for some of their assets and may sell off used equipment, vehicles, or other physical property and possessions. In such cases, companies opt to liquidate assets and convert them to cash. Is your business considering liquidating some of its assets, and you’re unsure of the process? Here’s an overview of the asset liquidation process to guide you:
The first thing to do is make a list of the things the business can or has to sell. You may have to make a list of all your assets and decide one by one if you can sell the asset or not. Note that assets aren’t just physical items like used equipment. They could be other things like trademarks, proprietary software, corporate intellectual property and other intangible assets. Your list should include a description of the item, information about the purchase, a photograph, warranties, conditions, and service records. You might also want to make a note if you need to make repairs or if the item needs repairs. Keeping good records is important, as you want to document the process for tax purposes or in case your creditors come after you later.
There are different ways to sell assets, from liquidation sales to auctions. Each method has pros and cons and if you have several items, you may want to use different methods for each, to ensure you can get the most money for your items. Consider online industrial liquidation marketplaces like Aucto that provide multiple selling options under one roof.
Next, you’ll have to establish the value of your goods, specifically, how much you can get for them in the current market conditions. Take note that liquidation value is typically far less than an item’s fair market value. There are many factors that can affect the price. Usually, how motivated you are to sell, how much time you have, supply levels in the market, and the actual value as established by an appraiser.
After determining the liquidation value, determine if you can still recover some of the asset’s value. Identify costs that may come with disposing of the asset, such as listing fees, commissions paid to brokers, and costs of storing and maintaining the asset while still in your possession. Next, you need to get organized and make a plan of action. Establish an ideal timeline of events, and maybe a Plan B if your first plan doesn’t work out.
Finally, it’s time to proceed with the liquidation of your assets. You have to keep an eye on the process to make sure everything goes smoothly. If some of your assets are too old or worn out, consider selling them for scrap value. You might be able to get more money just scrapping your used equipment, instead of waiting for it to sell.
Liquidation can be a difficult time in a business or a natural and regular function for a company. Follow these 5 steps to structure and organize your asset liquidation process. Visit Aucto for more information on selling on industrial liquidation marketplaces.
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