Independent Retailers: Going Out of Business Can Be More Profitable Than Staying in Business or Selling it
There is finally some good news for independent retailers and that is, going out of business does not have to mean the loss of everything.
It can actually be quite profitable and set them up for the next chapter of their life.
Most retailers realize when “things have changed” and they just aren’t able to compete and make the profit that they used to.
Or maybe they have lost their lease or the rent has gone up. Or the land they have their store on has been sold.
Whatever the situation most retailers don’t have an exit strategy in place when this occurs and are under the assumption that the end means a ton of debt or possible bankruptcy.
- There is much to think about, when considering going out of business, because every person is different and so is every business and situation.
- Making the decision to go out of business is often affected by many different factors, and it is a decision that must be made carefully with all the information.
There are some specific things that should be looked for, however, when considering whether to go out of business.
Sales, of course, are the most important issue to consider.
When a small business retailer sees that sales have been declining for some time, something must be done.
imagine your store looking like this at the start of Sale
With long lines of customers and minimal discounts
And looking like this after your GOB sale is over
Naturally, there are promotions and cash flow ideas that can be used to generate sales
But these do not always generate enough to make a real difference. Sometimes, it is just time to get out of business.
For example, if the retailer in a small business is finding that Amazon, other large chain stores with an internet reach, and big box stores are moving in and stealing the customers away, it is very difficult to compete with that.
Having this awareness might be a signal to the small business retailer that it is time to hold a going out of business sale and cut his or her losses.
This is a trend that is happening across the country.
Another growing trend is that landlords have been increasing rents and selling land that are occupied with stores in this changing environment.
Many independent business owners are finding themselves out of a store location within just a few months time and in most cases do not know where to turn.
It seems impossible to imagine but by conducting a going out of business sale, the retailer can sometimes earn more during that time period than he or she could earn if the store stayed open and tried to continue operations.
In order to do this, however, the going out of business sale must be properly facilitated and conducted.
When it is, the profits that can be generated can be very surprising…many times four to six times the normal revenue!
Unfortunately, the retailer often does not understand exactly how to conduct this type of sale because they have never gone out of business before.
This is a unique sale requiring a unique strategy.
Knowing all the ins and out of how to run a sale of this nature without guidance, the retailer can lose a lot of profit that could have been acquired through proper preparation and selling techniques.
It is difficult for many retailers to imagine how they could actually make more money by going out of business, especially one that is currently failing to make much money.
A sale of this kind would equate to bigger profits than what the company was making while staying in business.
But these profits would be for a short period of time while the business was being liquidated.
That is why the planning and preparation begins weeks before the sale even starts.
It’s not just needing to know what to mark down when but also proper customer flow and having a firm marketing plan in place.
Once a store decline begins it is critical to catch it in the early stages and not wait for another “season” to see if things turn around.
If the retailer holds on and does sell out all his newest and best merchandise and then decides to liquidate a store, the chances are high they will be left with a huge loss.
It is the strategic planning of a going out of business sale with a good mix of merchandise that ensures it will be a success.
Unfortunately many independent retailers refuse to hold a going out of business sale before the situation has gotten too dire.
Whether it is a lost lease or a decline in sales that brings an independent store owner to consider a going out of business sale, there is good news.
It is possible for the owner to profitability walk away from their business with their heads held high, ready for the next chapter of their lives with a properly run sale of this kind.