Effective Retail Business Exit Strategy and Profitable Closing
It’s probably a fair assumption that since your reading this article, one or more of the following is applicable to you, a small retail business owner.
- You’re broke.
- You’re on the way to being broke.
- You need more cash flow.
- Your business is dying.
- You’re business is already dead.
- You’re ready to retire, looking for a business exit strategy.
- Your property is worth more than your retail business.
- You’re tired & frustrated.
- You’ve got an abundance of inventory.
- All of the above.
Alright, I know it’s pretty harsh, but this article is not about being nice and proper.
It’s about reality and helping you generate immediate cash flow and visibility for your store by liquidating your inventory and assets with a professionally conducted, high impact, Retail Sales Event.
An effective retail business exit strategy.
If the inventory in your store is not constantly moving out the door, then it’s putting a strangle hold on you and holding back the cash flow you want and need if you plan to stay in business.
It’s important for me to clarify, too, that to liquidate does not necessarily mean to go out of business as it’s commonly perceived.
I tell my clients all the time that in order to succeed in retail at any level your inventory must be in a constant state of “liquidation”.
A high impact Liquidation Sale can take many forms and have many variations such as an Inventory Reduction Sale, an End of Season Clearance, a Store Closing Sale, a Retirement Sale, a Going Out of Business Sale, and the list goes on and on and on.
However, my focus – and my company’s focus – has always been geared more toward the liquidation of an entire inventory including fixtures and equipment.
Why? Because the reason I got into this business is because of a personal experience.
You see my dad used to work for Sam Walton before Walmart ever existed. He learned everything about retail from Sam.
Like it or not Walmart is one of the most successful retail businesses on the planet, so I’d say he had a pretty good teacher.
When the opportunity came my dad went out on his own and opened his own small retail businesses.
I was right there helping my mom and dad as we worked on our family business together.
Many years passed and ironically my dad’s stores began hemorrhaging cash as a result of Wal-Mart moving into the same small towns where his stores were located.
imagine your store looking like this when your exit sale starts
With long lines of customers and minimal discounts
And Looking like this when your Business Exit Sale ends
We went through the same process you are likely going through as you read this: looking for solutions and “help” to make sure we liquidated our businesses correctly and profitability.
We called and interviewed several companies that offered liquidation and store closing services.
After analyzing the various methodologies they used to promote a GOB Sale, I recognized a problem with the available solutions: they were all cookie cutter programs, but our situation wasn’t cookie cutter.
It was unique.
We had invested years of hard work and dedication to develop relationships with our respective communities, and we were forced to follow the cookie cutter program that offered nothing to accommodate for our unique circumstances if we were to have any chance of success.
Some told us they would not work with us unless we had a certain amount of inventory, others refused to quote a fee range unless they sent one of their representatives out to “analyze our inventory”.
Which we had to pay for (although it would be deducted from our contract if we signed on with them), and others informed us we’d have to invest in several thousand dollars worth of prizes (televisions, vacations, etc.) which were part of an elaborate “game” designed to get people into our store.
Many even had elaborate re-pricing systems requiring us to retag every single item in our store EVERY week, which would cost more time and money.
We wanted the best, so we were thorough.
Bringing reps from several different companies in to meet with us and “analyze our inventory”.
After reviewing contracts and fee structures from various programs and finding miscellaneous fees and charges they didn’t mention to us on the phone.
We settled in on one particular company we felt would be the best fit and provide us with the best results.
We had little idea of what we were really in store for the weeks to come.
As I watched the process unfold and take place with the company we had contracted I realized, too, that there will be a LOT of retailers HURT with the available options for liquidation in the market for small and medium sized independent retailers.
The seed of the idea to start my own company and become the renegade consultant that not only stood up for what was right, but also implemented CUSTOM solutions based on each individual circumstance.
With the company we contracted, we paid for the expenses of a random consultant they assigned to our project who “showed up”, but there was a disconnect we were unable to define at the time he arrived on site.
Disconnect being herein defined as clearly not being fully interested in producing best results for our Sale.
He was going through the motions, yet every single week we were contractually obligated to write a substantial check to them for services rendered.
Marketing has always been a passion of mine since I was a kid and started my first business, renting out my Big Wheel after being openly struck by a speeding car, unable to ride it myself for nearly a year.
So as I watched this liquidation process unfold in my dad’s first store I wondered why they weren’t implementing certain marketing strategies.
But we followed along because we knew it made no sense to hire someone and not follow their suggestions.
To make a long story short.
I learned from first hand experience how everyone in the marketplace conducted liquidation sales, the process itself real time, and most importantly how to improve it.
So I started my company shortly thereafter and now, almost 20 years later (as of this writing) I still work with select clients helping them liquidate assets effectively and efficiently with marketing strategies and systems that WORK.
But more importantly I listen and customize my program based on their particular situation.
So, can you liquidate ‘part’ of an inventory and not close your store or business entirely?
Of course, but often attempts to do so are futile attempts to stay in business when closing is the best option.
I’ve provided free consultations to hundreds of potential clients over the years and have had virtually the same dialogue in most instances.
Challenges retailers face tend to be very similar…it’s the SOLUTIONS to these challenges that should be unique.
I use the same principles to liquidate part of an inventory as I do for an entire inventory for a Store Closing Sale.
We simply make adjustments to the process for clients that wish to stay in business and conduct an Inventory Reduction Sale to liquidate some inventory and rejuvenate cash flow and market visibility.
Having been actively involved with retailing for as long as I have there is one major lesson that I have learned:
No matter what, at some point in time.
EVERY retailer will have to close their doors for good and be completely liquidated.
It may be because of a lost lease, retirement, box stores becoming too difficult to compete with, poor health, real estate becoming more valuable than the business itself, or a host of other reasons, but at some point every retailer will have to completely liquidate at some point.
Until that time happens for a retailer it’s vital that they either conduct themselves or have conducted for them a high impact promotional Liquidation Sale at least twice a year to generate fast visibility and traffic to the store, which erupts the cash flow, and liquidates large amounts of inventory in the process.
And if the process is done correctly there should be a substantial amount of profit for you, while you expand the size of your contact or customer list substantially.
This will be a critical asset when you do decide to exit your business for good.
Believe it or not the question of how to liquidate a small retail business is a complex one and not for the faint of heart if you decided to do it on your own.
Keep in mind that liquidating a business is like starting a new business while you are running your current one. And you only get one shot to do it right. One.