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A business owner may at times find that, he does not have enough cash flow and may decide to liquidate some of the business assets to boost the flow. Another reason for liquidation may be that he may want to terminate the business but cannot find a potential buyer. Whatever the case, the process should be carried out in a manner less likely to cause chaos somewhere down the line.
One of the most important things to do is to talk to a lawyer or an accountant. They will help you value the stock and explain any technicalities that may arise along the way. For example, if the cash is needed quickly, the entrepreneur may find that he may have to sell his assets at a liquidation value that is obviously lower than the fair market value.
You need to present the lawyer or the accountant with a list of all your assets, well prepared for sale. Prepare an inventory that may include photographs, serial numbers as well as short but vivid descriptions of the items. These will prove useful when the items are presented for sale. Worn out equipment and furniture should be excluded from the list and in any case should be donated. This will give you a well deserved tax break.
The next thing is that the lawyer or accountant should help you establish the liquidation value of the assets. Remember that this is a forced sale and may thus not fetch you much, but it should not be more than 20% less than the retail price if you are to fetch good return. Be sure that the sale and all you make from it is worth the while. It should be able to cater for commissions, advertising expenses, rent and labor expenses and still give you the value you are looking for.
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