What is Liquidation?

Despite its name, liquidation doesn’t involve any water but is instead an economical term where hard assets are transferred into cash. Much like water, cash is extremely versatile and easy to move around without any trouble, and liquidation is often used by businesses who need help getting some money.

Commercial clean-out houston tx

If you are still confused, think of it this way. Ice represents a hard asset (goods, services, cars etc.) and let’s say your business sells a lot of ice to customers on hot days. Then one day, the temperature drops and people no longer need your ice anymore. You start losing money, and in order to gain some you have to liquidate your ice goods into water (Which represents cash.) Then you can use the water for many different purposes, unlike the ice where its only purpose was to cool people down.

When you only sell cars, you are selling to a niche audience of drivers, but when you have cash you can use it for many things.

All items have different liquidity values, which translates how easy they are to turn back into cash. A business with a lot of high liquidity items has a ready supply of cash on hand, which is a great buffer should things go bad for them.

Commercial clean-out houston tx happens when a company needs to quickly liquidate everything they own, usually for economic purposes. Companies come to them and help them turn their solid goods into cash, which will then be used to help the company recover.

If you are a small business owner, then understanding which of your items have high liquidity can be a useful piece of knowledge. No one ever wants bad times or a recession to happen to them, but if it does, you’ll know that you have cash on hand.