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There may be several reasons why you’ve decided to close your manufacturing plant. Financial troubles are, unfortunately, a common reason. Another aim could be a simple desire to retire. Or perhaps you wish to stop the daily grind that goes with owning one’s own business and return to the stability of the traditional workforce.
Whatever the reason, once you have decided to close things down and liquidate your machinery and other equipment, it’s essential to assess the value of each item you’ll be putting up for sale so you can get the most money back.
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Here are some actionable steps to take to set up the liquidation of your manufacturing plant efficiently.
Conduct a Complete Inventory of Everything in Your Factory
Make a complete list of all your assets—everything from manufacturing equipment to office furniture. Take photos of each item in your factory, write a brief description, and include serial numbers where applicable.
Having this record will come in handy when sorting out your taxes and answering any IRS questions.
Work with Creditors
If you still owe money on some equipment in your factory you may need to get permission before selling any of these items. Get together with your accountant or lawyer to get negotiations underway regarding monies owed and where certain things should end up.
Make Returns to Suppliers
Raw materials, extra packing, and even excess office supplies throughout your factory should be returned to suppliers if possible. In most cases, the supplier will give you a refund on unused items so long as they are in good condition. Even if you only get a partial refund, it’s better than nothing.
Make sure to look over each supplier’s return policy for any special conditions.
Place a Value on Each Asset in Your Manufacturing Plant
Assign a value for each inventory item. Everything in your manufacturing plant has value. This includes, for instance, office chairs to injection molds, die-cut machines to office laser printers. Find out what each item is worth by checking auction websites or classified ads to see the going rates. You might also consider hiring a professional appraiser to come in to assist.
Assign a Status to Each Asset
Before you begin selling everything off, make sure it’s yours to sell first. Return leased items to the actual owners. You might have some equipment in which you owe more than you could reasonably sell them for. In that case, your only options are keeping them, paying them off, or surrendering them in a formal repossession.
Sell off Manufacturing Equipment and Other Plant Assets
Once you’ve got everything sorted and evaluated, sell as many of your factory’s assets as you can. Post items for sale online or reach out to other businesses that could be interested in your items. Let them know you’re selling items at a significant discount.
If time is an issue and you need to liquidate quickly, offering considerable discounts will help you sell items faster.
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Make the Best Exit
Closing up shop can be challenging—especially if it’s not the path you would have preferred. To save yourself some grief and hassle, you may want to consider hiring a liquidation company to assist you in closing up your manufacturing plant. They will come in and evaluate all your assets, help you determine their status, and take care of all the sales in exchange for a percentage of the profits.
While it can be disconcerting to see how quickly a business such as a manufacturing plant can be liquidated after years, even decades of being built, it’s good to know that the process can be done and fairly.
You may be walking away, but you can walk away feeling right about it.
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About the Author
This article was brought to you by VX LLC, an industry-leading buyer and seller of used industrial equipment. Contact us if you need help liquidating your manufacturing plant.