What is a Four Letter Word That Rhymes With Retail?
February 9th, 2011
If you guessed “jail”, you have either owned a retail store or worked in one. In my 25 years of being a business broker, I cannot tell you how many hundred times a buyer prospect has said to me, “I want a light manufacturing company or a distribution company but not retail. If you wonder why owning and working in retail is like a form of jail, keep reading.
With retail, you are faced with periods of inactivity and loneliness interspersed with periods of extreme activity. There is no way to know when you will be inundated with customers or left staring at cobwebs. Even taking a bathroom break can cause you to lose valuable business.
With retail, you have decisions to make as to what days you are open and what hours you work each day. If you are in a mall, those decisions are made for you by the warden or more affectionately known as the property manager. Even if you know from experience that on certain days and during certain hours, there will not be enough business to justify paying employees and keeping the store open, you are forced into hard labor regardless of the expense.
Then you have the issue of store openings and store closings. Most new business owners start out opening their stores early in the morning and closing them late at night. Then over time, they try to find an employee they can trust to do one or the other or both. But if that employee calls in sick or doesn’t show up for any other reason, the owner has to stop whatever they are doing and head back to the store.
This means those dinners, movies, sporting events, children’s activities, social events, etc. will be unexpectedly interrupted and quite a bit of disappointment will occur. Thus you never know when your life schedule will be thrown out of kilter. This uncertainly takes a toll on all family members.
Of course you have the issue of the lease agreement. The lease is a form of handcuffs that binds you to a commitment regardless of personal or business circumstances. The restraints are made tighter by way of the personal guarantee that is required where one or both spouses figuratively and literally imprison themselves. Should you ever try to seek relief from the lease agreement, it is solely in the hands of the landlord or property manager to determine whether your sentence is made shorter or if you can be paroled.
In the fourth quarter of every year, you have good news and bad news. For the most part, retail businesses live or die based on fourth quarter results. This is after enduring and trying to survive the first nine months of the year. And you always have to watch your back to make sure the competition doesn’t manhandle you.
Then we can deal with public failure coupled with embarrassment and humiliation. Your credit record will be severely damaged if you file for bankruptcy or break your lease. Items other than bankruptcy will damage your life for 7 years, and a Chapter 7 bankruptcy will hang over your head for 10 years. You will have a record that will haunt you for a decade and affect the cost of anything else you attempt to buy, finance, lease or rent. Your record will be expunged after 10 years, but the scars will last a lifetime. Applying for a job, renting an apartment, buying a car, obtaining different types of insurance, buying a home, etc. will always be constant reminders of your incarceration.
So in conclusion, anyone considering the purchase or startup of a retail business needs to fully understand everything that’s on the line. One false step by you or an employee can have life long and devastating circumstances for you and your family members. Now, I hope you understand why you should think jail when the word retail is mentioned or suggested.
Even though there maybe challenges as outlined in the article having the right tools such as using a business broker will not only help you avoid some of these pitfalls but will help make the sale or purchase of a business a smooth and successful one.
The most important reason to use a business broker is to have someone who routinely must “think outside the box.” Someone who has worked in this industry for over 20 years has probably seen almost anything imaginable. They have been called upon to mediate transactions in order to help sellers and buyers put their egos aside for the benefit of the deal. Creativity can save a transaction that has been stopped dead in its tracks. The business broker brings this creativity to the equation to help solve the problem and make everyone a winner.
Most people will purchase or sell only one business in a lifetime. You’ve got to get it right the first time. Let Bottom Line Management, Inc. show you what we can do for your bottom line. As leaders in business sales, acquisition, valuation and management services for over 25 years, Bottom Line Management, Inc. has accrued experience in over 200 industries and exceeded the expectations of hundreds of clients.
Beginning in March 2011, a FREE 2 hour seminar will be offered monthly to help people sell and buy businesses. The seminar is entitled “What You Need to Know When You Are Ready to Sell or Buy a Business.” Registration is required and attendance is limited. Stay tuned for more details – visit our website for updates.
Loren Marc Schmerler, CPC, APC is President and Founder of Atlanta based Bottom Line Management, Inc. He has been a business consultant for 40 years, a business broker for 25 years, and a public speaker at Inc. Conferences, BellSouth Symposiums and STAPLES new store openings. During the early 1990’s, Mr. Schmerler was the first and only business advice columnist for Sam’s Club where he used actual case histories to illustrate business problems and their solutions. Mr. Schmerler has experience in more than 200 types of businesses and/or industries. Bottom Line Management, Inc. offers both Seller and Purchaser representation.
If you guessed “jail”, you have either owned a retail store or worked in one. In my 25 years of being a business broker, I cannot tell you how many hundred times a buyer prospect has said to me, “I want a light manufacturing company or a distribution company but not retail. If you wonder why owning and working in retail is like a form of jail, keep reading.
With retail, you are faced with periods of inactivity and loneliness interspersed with periods of extreme activity. There is no way to know when you will be inundated with customers or left staring at cobwebs. Even taking a bathroom break can cause you to lose valuable business.
With retail, you have decisions to make as to what days you are open and what hours you work each day. If you are in a mall, those decisions are made for you by the warden or more affectionately known as the property manager. Even if you know from experience that on certain days and during certain hours, there will not be enough business to justify paying employees and keeping the store open, you are forced into hard labor regardless of the expense.
Then you have the issue of store openings and store closings. Most new business owners start out opening their stores early in the morning and closing them late at night. Then over time, they try to find an employee they can trust to do one or the other or both. But if that employee calls in sick or doesn’t show up for any other reason, the owner has to stop whatever they are doing and head back to the store.
This means those dinners, movies, sporting events, children’s activities, social events, etc. will be unexpectedly interrupted and quite a bit of disappointment will occur. Thus you never know when your life schedule will be thrown out of kilter. This uncertainly takes a toll on all family members.
Of course you have the issue of the lease agreement. The lease is a form of handcuffs that binds you to a commitment regardless of personal or business circumstances. The restraints are made tighter by way of the personal guarantee that is required where one or both spouses figuratively and literally imprison themselves. Should you ever try to seek relief from the lease agreement, it is solely in the hands of the landlord or property manager to determine whether your sentence is made shorter or if you can be paroled.
In the fourth quarter of every year, you have good news and bad news. For the most part, retail businesses live or die based on fourth quarter results. This is after enduring and trying to survive the first nine months of the year. And you always have to watch your back to make sure the competition doesn’t manhandle you.
Then we can deal with public failure coupled with embarrassment and humiliation. Your credit record will be severely damaged if you file for bankruptcy or break your lease. Items other than bankruptcy will damage your life for 7 years, and a Chapter 7 bankruptcy will hang over your head for 10 years. You will have a record that will haunt you for a decade and affect the cost of anything else you attempt to buy, finance, lease or rent. Your record will be expunged after 10 years, but the scars will last a lifetime. Applying for a job, renting an apartment, buying a car, obtaining different types of insurance, buying a home, etc. will always be constant reminders of your incarceration.
So in conclusion, anyone considering the purchase or startup of a retail business needs to fully understand everything that’s on the line. One false step by you or an employee can have life long and devastating circumstances for you and your family members. Now, I hope you understand why you should think jail when the word retail is mentioned or suggested.
Even though there maybe challenges as outlined in the article having the right tools such as using a business broker will not only help you avoid some of these pitfalls but will help make the sale or purchase of a business a smooth and successful one.
The most important reason to use a business broker is to have someone who routinely must “think outside the box.” Someone who has worked in this industry for over 20 years has probably seen almost anything imaginable. They have been called upon to mediate transactions in order to help sellers and buyers put their egos aside for the benefit of the deal. Creativity can save a transaction that has been stopped dead in its tracks. The business broker brings this creativity to the equation to help solve the problem and make everyone a winner.
Most people will purchase or sell only one business in a lifetime. You’ve got to get it right the first time. Let Bottom Line Management, Inc. show you what we can do for your bottom line. As leaders in business sales, acquisition, valuation and management services for over 25 years, Bottom Line Management, Inc. has accrued experience in over 200 industries and exceeded the expectations of hundreds of clients.
Beginning in March 2011, a FREE 2 hour seminar will be offered monthly to help people sell and buy businesses. The seminar is entitled “What You Need to Know When You Are Ready to Sell or Buy a Business.” Registration is required and attendance is limited. Stay tuned for more details – visit our website for updates.
Loren Marc Schmerler, CPC, APC is President and Founder of Atlanta based Bottom Line Management, Inc. He has been a business consultant for 40 years, a business broker for 25 years, and a public speaker at Inc. Conferences, BellSouth Symposiums and STAPLES new store openings. During the early 1990’s, Mr. Schmerler was the first and only business advice columnist for Sam’s Club where he used actual case histories to illustrate business problems and their solutions. Mr. Schmerler has experience in more than 200 types of businesses and/or industries. Bottom Line Management, Inc. offers both Seller and Purchaser representation.
