(Editor’s note: Most business owners know that they should plan for ownership succession, but can never find the time to do so. Busy with chasing new customers, offering promotions, cutting costs, and fighting suppliers, business owners don’t become aware of the urgency for succession planning until it’s almost too late. The first part of this two-part series discussed various strategies of ownership succession. This concluding part deals with valuation.)
One route through which a business owner can cash out his or her interest in a firm is through liquidation. The owner can stop taking new customers, finish the work currently on the books, and sell the remaining assets. Proceeds from the sale of assets are then used to pay any liabilities the company may have.