Retail is taking a beating. Over the past three years bankruptcies have accelerated, from mall staples to anchor stores. While others simply continue to close more stores and hope for the best in their online sales. Even Walmart has closed over 150 stores in the last year and now focuses on its supercenter and e-commerce sales. It’s easier for a large business with resources on hand to decide when to close up shop. For a small business, the decision is both more emotional and difficult. It is possible to retrench and become a predominantly e-commerce operation, but that takes a lot of time, effort, and a serious amount of expenditures on web presence, advertising, and website.
Considering closing retail business? Here are some factors you need to consider:
- Profitability. It can take years for a business turn a profit, but if you are hitting or past the five-year mark and are not profitable, you may be riding for a fall. It may be better to take a small loss instead of a much bigger one later.
- Return on investment. What you are investing in business is more than money, it is time. If you are investing more and more time for less return, you may be spinning your wheels and digging yourself deeper. If you find that you have no time anymore for anything but the business, you need to look at how that decision may be costing you regarding quality of life and happiness.
- Customer retention. Customer retention is more than foot traffic; it’s customer loyalty that brings them back again and again. If you have customers that you have not seen in a while, it may be a sign that they have moved on – and so should you.
- Foot traffic. E-commerce is invading every aspect of the old retail relationship. People find it more convenient to have regularly purchased items delivered to them. If your foot traffic is falling, it may be time to scout a new location, put more effort into an e-commerce site, or put up the liquidation sale sign.
- Too much competition. When you look around your area, how many stores are there that are selling the same products, and close to the same price? You may be racing for the bottom and hemorrhaging money as you sell your stock for less than you paid for it.
If you need an objective opinion on whether or not it is time to close your business, we can help. We can take a look at your paperwork and help you to plan. If you decide that closing the business is the better idea, there are some steps that you need to take. We can help you with the orderly dissolution of your company, resolving tax obligations and debts, and letting you know how to maintain your legally required records. Our offices are open seven days a week in both Fort Lauderdale and West Palm Beach, and your first consultation is free.