Company Liquidation: How to avoid business liquidation
Author: John Coorey
The threat of company liquidation can be very difficult to manage. Not only will you have financial concerns to occupy you, but you are likely to have an unhappy staff base and a list of creditors who are contacting you regularly to talk about payments. Don’t panic. Insolvency is only ever a last resort and you probably still have more options that you think you do. Take a step back and look at your business liquidation options, your expenses and your position. You may well find that there is another solution.
First step to avoid a company liquidation
One of the first steps in pulling yourself out of financial problems is to look over your current assets and identify any potential cash flow. If you are in possession of high cost items, such as property or vehicles, consider whether or not you can sell these items in order to release their monetary potential. In many cases you may be able to sell the physical property where your business is located but retain the lease from the new landlord, meaning that you don’t even have to relocate. If you own a fleet of cars or trucks, consider selling them and using hire vehicles temporarily. A smart decision of this kind could result in the release of enough cash to pay off some of your debts, allowing you to continue operating as a company.
Second step to prevent business liquidation
Similarly, if you currently have excess stock or products that have not yet been sold then you have a mountain of credit that is waiting to be realised. All stock is worth something, so no matter how big or small your inventory, so consider selling it quickly and freeing up the money that is tied up in it. Try looking carefully at your balance sheets to identify the stock that is not making profit. Once you have sold this stock you can use the money to buy more successful, profitable stock that will help you avoid business liquidation.
Sell stock in wholesale quantities to avoid a business liquidation
You can often sell stock wholesale or in smaller quantities. For an idea of how much your stock might be worth try contacting a professional excess stock seller. At Coorey and Co we are able to find buyers for all types and quantities of stock and we will do extensive market research to give you an idea of how much your goods are worth. Remember that once you go into company liquidation, control of your stock and other assets will be completely out of your hands, so start thinking about releasing the investment value sooner rather than later.
Once you have released some of the monetary value stored in your business assets, it is crucial that you use them correctly. Do plenty of research into the market that you are operating in and start to source new customers and suppliers. This will help you to spread your risk and avoid facing business liquidation once again if your precious contacts have become nervous and decide to terminate their relationship with you.
Crucially, if you find yourself in the unfortunate position of facing business liquidation you should certainly look into finding a professional Insolvency Practitioner who can help and advise you. They will be able to take a close look at your business and your accounts to give you targeted, personalised advice on how to proceed with your company liquidation.
Company Liquidation: are you sure you’ve tried everything else?