Liquidating a Business Does Not Mean Closing

Dr. Lancesa Clausheide
Victoria Wiederkehr

There is no better time in business than now to up your game in your operational landscape. Liquidating anything you don’t need, or use is just plain smart. It is a tool for financial gain as well and being lean is always smart in any business or even residential operation. There is a time and season for everything, and letting go of valuables brings about new opportunities for sunk cost or investment originally made. Return on Investment (ROI) is a goal of all business owners, and circulating assets throughout the year is a strengthening tool that helps all businesses survive in downtimes.

For a business, liquidating is not the END in every situation. It is a way to generate working capital, free up space and bring a plan for a new business birthing whether your model is shifting or just preparing for the financial demands of this quarter or an asset purchase.

Working capital, it can come to you in many ways. The smartest ways are from sales and profit, and no doubt cash flow. Debt is another option as well as investment dollars. Sales of assets or equipment is often a tough topic since not every operator has protocol in place to make these sales happen. Cardinal Selling Services was founded in a time where many people in rural communities had wonderful assets to sell, but didn’t understand at all how to sell using online selling tools. Today, most of our new clients come to us who are professionals, do not want employees dealing with their cash for selling assets and want options to get the highest ROI.

When thinking of the term liquidating, people often interpret it to mean a business is struggling financially. While this might often be true, liquidating unused assets is a great way to collect cash flow and clear out space for new inventory. Using strategic marketing words can help the public distinguish between liquidation for businesses that are closing v/s businesses that are liquidating and clearing space for additional inventory to arrive. The ability to distinguish the difference might be just what is needed to bring more customers to your business.

During the unprecedented times of the pandemic sweeping across the globe, companies of all sizes have had to find creative ways to continue their operations. While large companies might struggle, they are often able to borrow from reserves and continue on in some fashion. Small companies on the other hand do not always fare so well. They are less likely to stay afloat without the regular cash flow found in typical daily operations, and finding an alternative source for that cash flow is paramount for survival. Rarely can any business be ready for such extreme circumstances to arrive unexpectedly, but a small business is especially vulnerable. Many companies have completely closed, and many have dwindled down to a small staff and a fewer hours of operation. These techniques to save money do work, but they also inhibit the company’s performance and the opportunity for customers to buy, which means sales suffer as well.

When faced with these tough times and the consideration of closing, small businesses should realize that is the moment to look around and find assets they can liquidate. The addition of liquidating surplus items can cause the transfer of cash where it seemed there was none available, and that might be what it takes to make the difference to survive.