Should I liquidate the company in the current environment?

I was asked this question recently and there are two options.

Firstly let’s look at the figures and then let’s look at what really can be done.

My advice would be to determine what liabilities are in the company first of all. This can only be done by getting an up to date set of accounts. Then look at what liquid assets are in the business ie cash in the bank and money that is owed to you. Is there stock in the business that can be converted to cash quickly?

Now is there an excess of liquid assets over the total money that is owed in the short term? Depending on the gap, you have a fighting chance in my opinion. If a lot of the liabilities are held with personal guarantees such as office leases and bank loans (which a lot of them are, if they were taken out in recent years) then if you liquidate the company, these liabilities still follow you. If there are a lot of personal guarantees then liquidation may not really be an option as it won’t solve the problem. You’re best way is to trade out of it.

Now let’s look at what really can be done. When you’re in what appears to be a desperate situation that you’re considering liquidation the mindset is constantly looking at the negatives. If it’s focused on seeing negatives – that’s all you will see and that’s all you’ll get. It’s very hard in that situation to see the positives and therefore impossible to see the opportunities. And yet there are so many opportunities out there. Whatever course of action that is taken the positives have to be looked at constantly. The mind can’t be creative and see opportunities when it’s not in that frame of mind.

Although it appears very difficult to do, it is possible. You may be still looking at doing business the same way you’ve always done business. But the complete environment has changed – therefore your business has to change. When I go into a business to turn it around, I don’t just look at what has been done in the past, I look at how different the business could be done in the future.

Recently I lost somebody that I used to work with years ago when he took his own life. It still haunts me to think what was going through his mind and how he could have been helped. I was always brought up to believe there is always a solution to everything. It leaves so much devastation around and although it is just a ‘moment of madness’ I still wish he was here today.

If anybody is thinking that there are no other options for their business – think again, Get out, shake yourself down, remove yourself from negativity immediately, rent a few comedy movies and then get back into the business and start looking at all the opportunities that are out there.

I live by the philosophy that I take responsibility for everything I have. It’s not the environment, it’s not the fault of somebody else or something else – it’s my responsibility, my environment. I may have to adapt my business if my environment changes – that’s fine – it’s my responsibility and therefore within my control.

There was a speech give by Russell Conwell that I read years ago. It’s called ‘Acres of Diamonds’ and was written back around 1890. There are so many messages in this speech that you have to read it a number of times. It is so prevalent today as it was back in 1890. Take the time to do a Google search (or Yahoo or Bing whatever you fancy), read the book and then start to see what you can do with your own business.