Closing down a restaurant or any other business is never an easy decision to make. Unfortunately, it has become increasingly common over the past year.
The strict social distancing and quarantine measure necessary due to the COVID-19 pandemic has dealt a heavy blow to the restaurant industry. With consumers restricted from going out and gathering in public, many restaurants and cafes failed to keep their businesses afloat. Over 10% of restaurants have closed down permanently since March 2020.
Many foodservice businesses still struggle financially, even as pandemic measures slowly ease up. Months of little to no business have put many restaurants in the red.
In such cases, restaurant liquidation is likely their best course of action. This remains true regardless of whether they choose to power through or to cut their losses. Liquidating inventory gives them the cash they can use to either start over or revitalize the failing business.
If you have decided on liquidating your assets, here are several ways to prepare and plan for it.
1. Clean the Place Up
Perhaps the most important part of preparing for a restaurant liquidation is to conduct a general cleaning of the whole place. This entails cleaning not only the dining space, cutlery, and glassware but also the kitchen and large cooking equipment.
It’s also important to go through any storage rooms and warehouses kept for the restaurant’s inventory. In some cases, it may be prudent to conduct basic repairs and refurbishing, like minor paint jobs, on some items to help you sell them later.
Cleaning the entire place of business and related areas will give you a proper look at your entire inventory. This would help you determine which items to be sold, which ones to hold on to, and which ones are no longer serviceable.
2. Clear Out Perishable Items
Make sure to clean out your restaurant fridge and chiller. This preparation step is crucial regardless if you’re planning to close permanently or temporarily. Restaurant liquidation firms may help take care of your equipment and tools but not the perishable food items.
In such cases, decide on what to do with the items and products before clearing out your fridge and kitchen pantry. You may still be able to sell them, though it may be harder and would have to be done as soon as possible.
Here are other alternative solutions to help clear out perishable items:
- Take them home for yourself
- Sell them online directly, such as through eBay
- Sell them at low prices to surrounding restaurants
- Sell them at below market value to employees or staff
3. Take Stock of All Assets
Once the restaurant, its related storage facilities, and its perishable goods are all cleaned up and cleared out, it’s time to take stock of all the available assets.
It’s crucial to organize and document your inventory for restaurant liquidation. Be as detailed as possible in preparing your current inventory of assets. This means taking note of the make, model, condition, and a brief description of each asset.
Having an organized list of items, equipment, and other supplies you want to sell will help later on in appraising and selling them.
As you take stock of all your assets, you can also take this opportunity to explore other ways to turn excess inventory into cash or marketing opportunities. You can also take this chance to offer your employees or staff the opportunity to buy any of the restaurant’s tools and equipment in case they want to set up shop themselves.
Doing so will help you keep a strong bond with your former employees, even after your restaurant closes.
4. Get the Items Appraised
Ensure that all the inventory items you plan on liquidating are properly and correctly appraised. Establishing the value of your assets up for liquidation will give you an accurate view of what you stand to earn from it all.
Take note that restaurant liquidation appraisal value is generally around 20% less than their retail value, both today and back when you bought them. Make sure to hire a qualified inventory appraiser to safeguard your interests.
Before entertaining any buyer offers, it’s also best to get a written liquidation value appraisal. Familiarize yourself with the appraisal well and ask questions to ensure you understand everything.
5. Take Pictures of the Items for Liquidation
Whether you work on your restaurant liquidation by yourself or hire the services of a seasoned inventory liquidator, you should prepare photos of all the products to be sold.
Taking photos of the items up for liquidation may make it easier to sell them. Digital photos will help in designing any marketing materials and advertisements. More importantly, the pictures give your liquidator firm and potential buyer a better idea of the overall condition of your product.
If you’re working with a professional restaurant liquidation firm, sending a couple of photos during the initial inquiry may also be helpful.
6. Choose the Type of Sale
There are many ways to sell surplus or redundant inventory during restaurant liquidation. It’s important to choose one that would give you the highest possible earnings. The speed of the sale is also an important factor.
Here are some types of sales you may consider:
- Negotiated sales: Buyers involved in this type of sale are often your competitors, suppliers, customers, and your landlord. You sell and negotiate directly with the interested parties.
- Consignment sales: A consignment sale may not be the best option if you are in a time crunch. Consignment sales are advisable only if your inventory is easily movable and you have the assistance of a local dealer specializing in selling your type of products.
- Auctions: Auctions, both in-person and online, are popular sales solutions when liquidating assets. They are also often the best option for most business assets. Auctions usually sell a single item to the highest bidder. However, there are cases where it is possible to do aggregate auctions or sell packaged or grouped items at a higher price.
- Internet sales: This type of sale is growing increasingly popular. It can also be particularly helpful for smaller foodservice businesses with much less inventory. If you decide on selling your inventory online, it is important to familiarize yourself with the FTC’s Internet Auction guide. It is also a good idea to approach a traditional auction company for a consultation.
- Sealed bid sales: Sealed bid sales are for businesses that require utmost confidentiality. In this type of sale, the bids are submitted in sealed envelopes to maintain secrecy and are only opened together at the same time and in a set place.
- Retail sales: Retail sales are recommended only for smaller or consumer items. This includes products like appliances, such as toasters and microwave ovens, and electronic gadgets, such as tablets and computers. Retail sales are also a good way to dispose of perishable or food items in your inventory.
7. Schedule Your Sale Appropriately
The time you sell your inventory is also an important factor to consider when preparing for a restaurant liquidation. Unless you require immediate sale and cash, it is best to schedule your sale according to your merchandise and market trends.
For example, if your restaurant had snow shoveling or snow blowing equipment, these would likely sell better during the fall and winter months, rather than in summer. If you’re holding a retail sale or in-person auction in your restaurant, it’s better to schedule it based on the workdays of your target customers.
Making it easier for your target customers to attend your sale raises your chances of getting higher bids and revenue.
8. Hire Inventory Liquidation Experts
Restaurant liquidation can be a long, tedious, and highly stressful process. Hiring liquidation experts and working with an experienced liquidation firm can eliminate a large part of the stress involved.
Professional liquidation firms can help with all parts of the liquidation process. For instance, TAGeX Brands offers a comprehensive suite of liquidation services.
Aside from the selling part, we can also assist in organizing, documenting, packing, and marketing all your inventory assets. We can liquidate your inventory through different sales channels to ensure maximum returns and high sales success rates.
Additionally, the TAGeX team can readily take care of customer inquiries, sales collection, and item removals.
Finding New Lease on Life with Liquidation
If you are closing your business permanently or temporarily due to the unprecedented situation brought on by the pandemic, liquidating assets can help get you back on your feet. Use this list as a guide in preparing for your restaurant liquidation. Doing so can help ensure you get the best value for your assets.
Selling restaurant inventory and assets is a genuinely good solution to help you pay off creditors, landlords, and employees. Moreover, any money left over can be used to start anew.
Contact TAGeX Brands today and let us help make your restaurant liquidation a much smoother and easier process.