Pros and cons of liquidating assets
Setting clear, hard deadlines and proceeding in a business-like manner toward a closing is the best policy.
A business liquidating voluntarily and in an orderly fashion will almost always discover that its creditors, customers, and vendors will be cooperative. If in the midst of such a process the miraculous turn-around event actually takes place, reversing course will also be easier.
If an experienced firm has been engaged, it will be low-balling the assets but accurately valuing them in the current market.
The owner facing such an appraisal, however, must brace him- or herself because prices named will seem extraordinarily low.The assets of a running business include its clients and their purchases.Machinery, equipment, shelving, and communications systems arranged complexly for a purpose are more valuable as a group than taken individually.This is sometimes difficult to do and requires early arrangements.Vendors and customers must be notified after the layoffs are accomplished. Finally, the owner should take his or her own inventory before third parties become involved.And to liquidate a business effectively is itself a business skill. Good timing and sober judgment are important aspects of "success" in times of failure.The earlier the owner realizes that liquidation cannot be avoided, the more resources will be present to liquidate with least pain.Bankruptcy; Business Failure and Dissolution; Selling a Business Liquidation means turning fixed assets into liquid assets, namely into cash.Thus an owner selling his or her business for cash as a going concern is technically liquidating it—but in usual parlance the term is applied only to a situation where a business is closed and all of its assets are sold.It's a good rule unless the business is actually losing money and cannot be turned around.There is no particular magic involved in this valuation.