Closing a business can seem stressful and overwhelming, as business owners must find ways to get rid of equipment and inventory in a short amount of time.
There are various methods for selling business assets, with each varying in the amount of effort and time required. But liquidating business assets is a great way to maximize your return and regain as much money as possible during the close of your business. Here’s how.
Select a liquidation company
Choosing a reliable partner is paramount when liquidating business assets. While it’s possible to sell all equipment and inventory by yourself, it takes a great amount of patience and effort. Instead, consider working with a professional liquidation company to eliminate stress.
There are a number of important factors to consider when choosing the best liquidator for your business. Make sure your liquidation company knows the average market cost for liquidation. Your liquidator should be also trustworthy and transparent regarding the price and level of service offered.
But if you can afford the service, it’s often worth it. A liquidation wholesale company can handle the marketing and selling of business assets while allowing you to recoup money from excess inventory and equipment.
Perform minor repairs
In order to maximize liquidation sale prices, consider cleaning up and repairing used or depreciated items. If equipment requires minor, inexpensive repairs, it might be worth it to get it fixed. Fixing items will increase the value of the final selling price.
For example, if your business sells electronics, repairing units can significantly raise their value. Instead of throwing away broken units, consider performing repairs using parts from other broken units. Minor repairs can be as simple as replacing a broken phone battery with a working one, and can help you maximize your profits in the long run.
Although donating assets won’t have an immediate payoff, donating can help you obtain tax benefits. Some items simply aren’t worth selling secondhand or to liquidation companies, so donating is your best bet for getting rid of them.
In order to figure out how much you’ll be able to deduct for donated assets, you’ll need to determine their fair market value. Fair market value is determined by estimating the amount you can obtain from a willing buyer at the time of donation. It’s also important to consider the condition of each asset, comparable sales, and the amount your business would spend replacing the asset into account.
In addition, it’s necessary to subtract depreciation deductions taken on the asset. For instance, if your business is selling quality modern furniture, your tax deductible will decrease depending on how old the piece of furniture is as well as the amount of wear and tear.
Before donating, make sure speak to a tax attorney to discuss your options and how much you can get back during tax season.
It’s difficult to successfully liquidate business assets if you’re too emotionally involved in the process. Although you worked hard to build your business, becoming emotionally invested makes it harder to maximize your profits.
In order to stay level-headed, remind yourself that you’re starting a new chapter and that liquidating assets is the best way to move forward. Don’t hesitate to reach out for support from friends, family, or even a professional if you need to.
The successful liquidation of business assets can help you recoup money after the close of your business. While finding the right liquidation partner will help you obtain the most money, performing minor repairs and donating inventory and equipment can also help you maximize profits.
All in all, staying rational throughout the process will help eliminate unnecessary stress.