There are only a few reasons that a business finds itself in a position of liquidating assets most can be avoided and most are do to poor management.
Point one is really the easiest to solve and it is more of a discipline then anything else. A business simply needs to address, early on, what surpluses are showing up in their inventories. Businesses can either increase their customer base or if the business is too internally taxed to handle more in house sales they can always hire outside sales agencies broadening their market. Through thoughtful actions liquidation can be avoided. Read More
Businesses with severe cash flow issues, to the point of desperation, are better off by filing. Depending on how bad and how big the business is filing chapter 11 to give them turn around time might be a good idea. Those businesses need to address what brought them into the situation in the first place. In this way they can reinvent themselves into an even stronger company, although it is a hard uphill climb it can be quite rewarding. The mere fact that you met the challenge and over came the crisis in it’s self is a rewarding experience. Over the years I have known several businesses that have done so and came out with a new business model and took the market by storm.
Most businesses do not plan on a rainy day and one will always come. The smart thing for any business to do is to save and plan for the rainy days. By building a savings plan into their business model they can circumvent most rainy days. To develop a good business plan or model to operate with I recommend Business Plan Pro there is a modest cost to the software but it pays for itself and will help bring those entrepreneur juices flowing again.
Department store returns:
Personally, I completely understand the logic of a business not wanting to allocate the resources to examine and re-assort department store returns. It is too costly for an active business to handle the issue of department store returns and can be good to liquidate the inventory. That said, there are other options depending on the ongoing volume of department store returns and depending on the structure of the business model. As with a service companies or a guaranteed sales or consignment companies they always have an abundance of department store returns. With this scenario it would almost serve the company well to set up a separate division to handle the re-assorting and re-sales of department store returns and or closeout surplus inventories. There is an entire market place of buyers for such inventories. If you are aiming to avoid department store returns you can read How to Avoid Department Store Returns.
Good areas for liquidation:
A couple of good liquidation areas that all business should always use to their best interest are used equipment, fixtures, and displays. All three should be liquidated by every business once the assets have reached their prime. T never fails to amaze me how businesses will throw assets away rather then liquidating them and turn them into reinvestment capitol.
Another area that should always be liquidated is salvaged merchandise. There are a host of buyers for such events that specialize in salvaged merchandise.
- The business holds onto surplus inventories too long and the surplus inventory becomes distressed and needs to be liquidated.
- The business cash flow is so poor do to poor management that it is in desperate need of cash.
- An abundance of department store returns.
Point one is really the easiest to solve and it is more of a discipline then anything else. A business simply needs to address, early on, what surpluses are showing up in their inventories. Businesses can either increase their customer base or if the business is too internally taxed to handle more in house sales they can always hire outside sales agencies broadening their market. Through thoughtful actions liquidation can be avoided. Read More
Businesses with severe cash flow issues, to the point of desperation, are better off by filing. Depending on how bad and how big the business is filing chapter 11 to give them turn around time might be a good idea. Those businesses need to address what brought them into the situation in the first place. In this way they can reinvent themselves into an even stronger company, although it is a hard uphill climb it can be quite rewarding. The mere fact that you met the challenge and over came the crisis in it’s self is a rewarding experience. Over the years I have known several businesses that have done so and came out with a new business model and took the market by storm.
Most businesses do not plan on a rainy day and one will always come. The smart thing for any business to do is to save and plan for the rainy days. By building a savings plan into their business model they can circumvent most rainy days. To develop a good business plan or model to operate with I recommend Business Plan Pro there is a modest cost to the software but it pays for itself and will help bring those entrepreneur juices flowing again.
Department store returns:
Personally, I completely understand the logic of a business not wanting to allocate the resources to examine and re-assort department store returns. It is too costly for an active business to handle the issue of department store returns and can be good to liquidate the inventory. That said, there are other options depending on the ongoing volume of department store returns and depending on the structure of the business model. As with a service companies or a guaranteed sales or consignment companies they always have an abundance of department store returns. With this scenario it would almost serve the company well to set up a separate division to handle the re-assorting and re-sales of department store returns and or closeout surplus inventories. There is an entire market place of buyers for such inventories. If you are aiming to avoid department store returns you can read How to Avoid Department Store Returns.
Good areas for liquidation:
A couple of good liquidation areas that all business should always use to their best interest are used equipment, fixtures, and displays. All three should be liquidated by every business once the assets have reached their prime. T never fails to amaze me how businesses will throw assets away rather then liquidating them and turn them into reinvestment capitol.
Another area that should always be liquidated is salvaged merchandise. There are a host of buyers for such events that specialize in salvaged merchandise.
