If you own or work for business, then you look for each and every opportunity to grow your company. You assume your competitors are doing the same and want to make the most of each chance you have to get a leg up. However, what do you do on the rare day that you find out a competitor is not only not doing well but going flat out of business? When a competitor business has a company liquidation coming up, it presents five distinct opportunities that your own business should move to capitalize on. Keep reading to learn what they are.
1) When a competing business is forced into liquidation, all of its physical assets are going to be sold off quickly, and the revenue generated will be used to offset debts, creditors and the costs of closing a business. Since they’re a competitor, they’re likely selling things that your company sells too. Even if your products are of different branding or manufacture, you can probably still find shelf space to sell their remaining products. At the very least, fill the clearance section of your website for a while. If there’s any nostalgia for your competitor’s products, don’t hesitate to capitalize on it.
2) With reference to an EDP24 article about liquidation handled by Jamie Playford, a company liquidation is not typically restricted to just the unsold product, but also anything material the company has, including shelving, cash registers, furniture, computer systems and even manufacturing equipment. If your competitor manufactured its products and you do too, it’s likely you can get some tools and machines your company already uses for quite a steal of a price. The same can be said for vehicles like service trucks or employee cars. Jamie Playford is a licensed insolvency practitioner in United Kingdom and has published many articles on insolvency, liquidation and bankruptcy.
3) Actual retail and manufacturing locations rarely get included in liquidation sales when companies close their doors, as many are leased instead of owned. However, whether or not they are rented or owned, those properties do eventually surface on the market. The owners of them will be looking to get new tenants or owners in as quickly as possible, as sitting properties cost money but do not make them. Keep an eye out for retail locations in markets you are not currently already serving that apparently have demanded similar products, and especially keep your eyes open for manufacturing or closed-door facilities that might be turn-key ready to fill needs within your organization.
4) One of the most valuable resources that you can collect from a competing company undergoing liquidation is the employees themselves. Many might be getting offered severance packages or are under “do not compete” clauses, but if any of them are available, they’re worth a conversation. They already have experience, training, and skills in your business’ niche or sector, and some of them could prove invaluable additions to your payroll, especially since some of them will bring the most precious thing your business needs:
5) New customers! Even if your competitor went out of business, it was in business for a while, and it had customers that needed things that your business offers, but were getting them from someone else. Well, now that someone else isn’t around anymore, and they need a new solution to their problems and needs. Talk with any former employees you hire and see what you can do about reaching out to their former clients. Even without former workers of the competitor, make it known to the local public that you welcome older customers of the now defunct business. In some cases, you can take over warranties and service plans of another business, or adopt their discounts, to snag they’re recurring and long-term customers.
When your business sees a competitor is about to have a company liquidation, don’t just celebrate at the demise of a marketplace foe. Take advantage of the situation to get your hands on a sell-able product, usable hardware, locations, employees and even customers.