Liquidation as Exit Strategy for Startups
Ever wonder why an exit strategy is included in your business plan? Because whether you like it or not there may come a time when you have to pull the plug and end your business.
Aside from financial losses, the emotional aspect of losing your business is very excruciating. In spite of everything, you must learn to control your sentiments and think objectively for the last time.
In case you do not have an exit strategy at this time, read Small Business Info’s tips for planning an exit strategy.
One of the common exit strategies for small business is liquidation. This is used when you do not have enough cash to repay your creditors. It involves selling all your assets to pay off all your financial obligations. If there is any money left, you can divide it amongst your business partners.
In this strategy, you do need not worry about transferring ownership control and engaging in further negotiations. However, do not expect to gain much money out of this approach because you will get the current market value of your company assets. There might be some situations wherein you will be forced to sell lower than market value.
