Economic issues often provide a backdrop for business bankruptcy and the need to liquidate property. Such a process can be anxiety-inducing, especially without the proper resources. Having a solid plan is an easy and effective way to lessen stress and close faster while also accumulating the highest profit possible.
1. Deciding When to Close
When a store is slated for liquidation, it only has so much time to finish the process. While many businesses may try to wait until the last minute to liquidate, some businesses decide that sooner is better. By liquidizing quickly, a store saves a lot of money on operating expenses which allows for higher profit at the end of the liquidation process.
2. The Process
Liquidation can be voluntary or forced. With a voluntary liquidation, the owner has a lot more flexibility regarding when and how the inventory is sold. Enlisting the help of a Retail Liquidation Expert will lessen the chances of steps being missed and will raise the overall profit.
Under a forced liquidation an assigned liquidator is in charge of the closing process. In both cases, it is the liquidator’s job to maintain all pertinent documentation of the process and evaluate the value of the store’s accumulated assets. The liquidator is also in charge of announcing and overseeing any final sales.
While liquidation is often used during the bankruptcy of both “Mom and Pop” small businesses and large retail chains, there is one other use. A large chain can liquidate only select stores in places where popularization of the brand is lacking. By liquidizing those stores, the chain is making money off of their product and no longer has to pay expenses for a store that has no value to them.
When closing down a store, it is beneficial to make money off of any leftover product. By liquidizing, it is possible to pay off creditors and other people of importance without issue.