Is it best for a small business owner to liquidate the assets of his/her business or sell the business?

Pros of Liquidation:

• Cash in hand. ?Liquidating can allow the business owner to transfer assets into cash quickly.
• Time. Selling a business can take a significant amount of time and energy, especially if the business is not performing well and the value of the physical assets owned by the corporation are close to the determined value of the business itself. ?If the owner is trying to liquidate all of the physical assets on their own (without the assistance of an auctioneer or a company that manages the liquidation process) then time may not be an advantage.
• Substantial Debt. If you’re potentially headed toward bankruptcy, liquidating a business can help settle outstanding debts and obligations. Please consult with your business attorney and accountant to help determine tax implications.

?Cons of Liquidation:?

• Significantly lower net value. Liquidating assets usually means you’ll receive the lowest net value. The Seller is missing out on value assigned/allocated to the goodwill of the business.? This can amount a significant loss to a business owner/Seller wanting to benefit from the sale of his business.
• Time and effort. While liquidating assets can be simpler than selling your business, it can still take time and effort. You will still be required to evaluate, market, and sell each asset or find someone to help you.
• Loss of employment for employees. ?Closing the doors to a business post-liquidation will probably mean that the employees will need to go find gainful employment.? Buyers would much rather purchase a business that has skilled/qualified personnel to continue helping operate the business.
• Unpaid expenses to clear. ??In most business liquidations the owner/seller is still required to clear debt and settle ongoing expenses.

It’s important to note that the pros and cons of liquidating your business can vary depending on your specific circumstances and goals. Seeking professional advice from a professional business broker/ intermediary can help you make a wise decision.

Thinking of liquidating?? Please reach out to Business Transfer Specialists before you do.? We’d like to perform a free business valuation to help you determine the best decision for YOU!

Business Transfer Specialists, LLC

?? Web:? www.biztsfr.com

?? PH:??? (614) 559-4515

?? FX:??? (614) 559-4562