Restaurants haven’t had it easy – especially recently. Faced with mandated closures, reduced hours, economic uncertainty, rising costs, and staff shortages, you may be in the difficult spot of having to decide whether to keep your doors open.
If you ultimately decide that closing your restaurant permanently is the best route for you, you have various options for exiting your business, including selling the restaurant, declaring bankruptcy, or liquidating your assets. In the case of restaurants, selling your business could prove difficult if you’re unable to find a buyer who wants to take on all the challenges of keeping the restaurant open or rebranding it under new ownership.
So for the purposes of this article, we’ll focus on the benefits of liquidation as an exit strategy, as well as using a liquidator to expedite the process.
When you’re ready to move on, you’ll likely have lots of questions: Should I use a liquidation firm? How do I find one? What are they going to charge me? Can they help me satisfy my debts? Can they negotiate with my bank? Do I really need one?
Turns out that liquidating assets and utilizing those funds to pay off creditors is the easiest, quickest, and most affordable path to be able to walk away from your business.
The bankruptcy option is less desirable in many cases because it’s a lengthy and costly process where fees can add up to a quarter of a million dollars or more. As such, bankruptcy is generally only advisable for those who have significant liabilities and need the protection that bankruptcy offers.
With liquidation, you can sell off your assets for cash and negotiate amounts owed to your creditors. Buyers could include similar restaurants or used equipment dealers, or the assets could be liquidated with the help of an industry-specific auction house.
Benefits of Hiring a Liquidator
There can be many benefits to working with a liquidation firm to sell off your restaurant assets. For starters, they’ll be able to address many of the questions you have as you consider liquidating, such as:
- What happens to all of the equipment in the restaurant?
- What happens to the food?
- What happens with employees? Will I need to lay them off? Will I be liable for taxes and unemployment claims?
- Where do I list items for sale?
- How much can I get for everything?
- What paperwork is required by my state and local taxing authorities?
- How do I walk away for good and leave this all behind me?
A liquidation firm can help you answer all these questions and then some, streamlining the entire process of closing down your restaurant. It will offer expertise on everything from managing cash flow to filing the appropriate paperwork. While you could take on liquidating assets on your own, you might be better off leaving the process to an experienced liquidation firm. Here’s why.
A liquidator can help you get the best price for your assets. Liquidators are experts at getting their clients the highest possible price from the liquidation of assets. They know how to price and list items for sale in a way that attracts buyers and encourages more sales.
You’ll save yourself from the headache of trying to sell off your assets yourself. Given the stress you’ve endured as a restaurant owner, it might make sense to leave the heavy lifting to a liquidation firm. They will ensure buyers are legitimate and list your items only on reputable sites. The last thing you need during this stressful time is to try and vet every buyer who expresses interest, deal with unscrupulous buyers, or potentially lose your assets altogether if someone doesn’t pay.
A liquidation firm can handle all the complexities of selling your assets for cash. There can be various complex issues to address when liquidating a restaurant that you might not be aware of. Restaurant Hospitality notes, for example, “If you have wine and/or liquor on hand when you close, you cannot simply hold a fire sale of that alcohol to raise capital.” A liquidator can help you navigate this process and obtain any necessary liquidation permits if you need to sell off alcohol.
Your liquidator can also help you dot every “i” and cross every “t” as you work to satisfy legal obligations and business debts. You won’t want to risk overlooking important details as you complete the required paperwork and processes as you exit your restaurant.
Not only will the liquidation firm help you get out of debt and walk away from your business, but it’ll help you complete the entire process from start to finish. The firm will send all the appropriate paperwork to the state taxing authority so you can receive an official release letter stating that all taxes have been paid and all required forms filed. This includes unemployment insurance and workers’ compensation insurance.
A liquidation company can also help you pay off any debts that are owed to your employees and even help find them new jobs. This is a valuable service to your employees and may even be required as part of the liquidation process in some states.
You’ll be able to more rapidly and easily put an end to a stressful situation that may be affecting your life, your relationships, and your ability to make a living. Chances are, you didn’t choose to liquidate overnight. You may have been experiencing ongoing financial and emotional stress for months or years leading up to this decision.
If you’re worried about how you’re going to pay off all of your debt and sell off your assets before the restaurant closes, things will be much easier if you use a liquidation firm. Your liquidator will take over everything for you, so you can more quickly get the fresh start you need to move on and start exploring new opportunities.
You’ll have an organized process for getting rid of assets. Your liquidator can help you document all inventory, gather equipment data, list items for sale or auction using online sales channels, handle customer questions and inquiries, collect sales proceedings, and coordinate the removal of sold items. You’ll be relieved to have someone else handling all the details while you wait for the proceeds to roll in.
Bottom line: Closing down a restaurant is no easy task. You have to deal with customers, suppliers, employees, inventory, and much more. A liquidator will take everything off your hands so you can start planning your next steps.
Tips for Choosing a Restaurant Liquidation Company
If you are working with a liquidator as you close down your restaurant, you might be wondering how to choose a good restaurant liquidation company. In order to be able to help people who are looking for help with closing their business down, a company should be professional and compassionate as you transition away from this phase of your life.
After all, you’ve probably invested your life’s savings and endless hours of sweat equity into your restaurant. Being able to walk away with dignity—along with some cash in your pocket—will help you feel positive about your decision and enable you to move forward.
No doubt, the liquidation process can be difficult, but an experienced liquidation firm like TAGeX Brands can make the process go smoothly. We’re with you every step of the way, explaining every detail, answering your questions, and giving you the fresh start you need.
Be sure to get in touch with us if you have more questions about the liquidation process and wish to receive focused, personalized guidance based on your goals and individual circumstances.