Every entrepreneur hopes their business thrives for the indeterminate future, but the harsh reality is that most businesses eventually fail. Learning how to turn that failure into swift recovery and future opportunities is essential if you want to move on to success, the way countless successful entrepreneurs before you have. In fact, you’ll be hard-pressed to find a successful business owner who didn’t experience a stinging failure early in their career.
Aside from dealing with the psychological turmoil of watching your business slow to a halt, the first step to finalizing the close of your business (and therefore, the first step in moving onto your next venture) is liquidating your remaining business assets.
You have several options here, and you may need to utilize many of them for different assets throughout your business.
Your first responsibility will be paying off any debts you owe. If you have enough cash to break even, your assets will remain in your business’s possession. However, if you’re filing for bankruptcy, you may need to sell some or all of your assets to cover the debts your business owes. If that’s the case, the court may put a lien on your assets and their fate will no longer be up to you. In other cases of bankruptcy, or if you’re selling assets to avoid filing for bankruptcy, you’ll need to sell the assets yourself.
Bulk Selling the Assets
One option for selling your assets is to sell them in bulk, usually through a contract, to another company. If you have a close competitor, or a company similar to yours but bigger, they may be interested in securing most or all of your assets in one fell swoop. This could be advantageous if you’re trying to complete the process as quickly and efficiently as possible; just be aware that you’ll probably end up selling these items for a loss.
Selling Assets Individually
If you don’t like the idea of mass-selling your equipment and assets to another company—especially one you’ve been competing with—you can sell your assets individually, in almost any manner you choose. This can be time intensive, but depending on what assets you have, it may also be more profitable. For example, you can list certain products on online marketplaces, and ship them off to individual buyers. You might even consider hiring a professional auctioneer, who can sell most of your big-ticket items (and even some smaller items) for reasonable prices.
If you plan on selling some of your assets individually, make sure they’re substantial enough to justify the time you’re going to spend on the selling process. Otherwise, it’s probably better to sell in bulk, one way or another—even if that means hosting a garage sale-style open sale of your equipment.
For items that you can’t sell, consider recycling. Some recycling programs can give you a decent return on your equipment based purely on the components it’s made from. For example, if you have a company car that doesn’t run especially well, you can probably get at least a few hundred dollars out of it. If you have electronic equipment, like computers, phones, or even fax machines, you can sell the items to an electronics recycler in bulk for a good chunk of change. Recycling is also an environmentally friendly choice—so try not to just throw everything away.
If you have full ownership of the business,or are one of a handful of partners, you may be able to retain ownership of your assets, even when the business is closed. For example, if there are computers left over after closing your business, you can keep them for yourself and use them as you see fit—maybe even to start another business.
If there are lots of assets, you may need to consider renting a storage unit, at least temporarily, until you can figure out what you’re doing with them. If you have a new idea for a business, consider leaning on your already-acquired assets to provide its foundation. If not, you can sell them at any point in the future that you choose.