I love analogies. Within those little sayings are embedded a grain of absolute truth. But also, a hidden cause. For example, the old phrase, “Grin’in like a mule eating saw-briars” invokes the perceived nirvana of unbounded happiness the likes of which cannot be contained. The real issue is that the mule has a bunch of briars stuck in his gums and teeth that prohibit the equine from closing his mouth. Yet, some of these oft beloved sayings are spot on. In fact, they are so truthful, it’s scary.
Fancy this one: “It’s far easier to start a business than it is to end one.”
I’ll give you a pause to soak that in. I’m speaking to the heart and general condition to such a huge audience of aftermarket parts businesses. Businesses that have no exit strategy. My voice echoes their secret thoughts and private worries.
As independent owners, what is the next thing in your life? Are you gonna sell spark plugs until you die? Are you gonna continue to work seven days a week chasing a pay off? Are you gonna sell out for 25 percent of what your business is worth just to get out?
No kids to take over? No big guys willing to buy you out? Will you be so happy just to get an “offer” that you will sell off your assets for pennies on the dollar? Are you disillusioned, tired and brow beat? Maybe that’s nothing new really, it’s just gone on for a while, but you need to get prepared. This is about business, not emotion. Are you gonna close up? Well, here is what to plan for.
Employees
They probably know it’s coming. They are not dumb. If they are dumb, that’s a good reason you are closing up. Treat them with honesty and integrity. Have a letter of recommendation ready for them, and it would be nice if you would contact other prospective employers on their behalf after the closing. You might be financially prepared, hopefully, but they will probably not be in the same position.
If you provide health insurance, try to cover them for a couple of months. It’s the right thing to do if you can afford it. Also, pay them for any benefits accrued. They earned it, give them their due. Plus, it’s illegal not to. This initial hit to the cash available to the business may be quite large, but, suck it up butter cup. You need to think about this in your “exit strategy.”
Vendors
You will probably owe most of them some money. You gotta plan for that too. Building up to the date of closure, limit you reordering. Think a few months ahead on this. There’s no need to re-order an item you sell once a year. This will also add to your cash on hand. If you have consignment items, be sure to replenish them. If you don’t do it, you will still owe the money, and reordering will actually help you budget consignment costs of getting out of business.
If you have inventory on terms, call the vendor, let them know what is happening. Come on man, you cannot walk away from these guys. They have a vested interest, and a right to their inventory. They will come and get it. It’s theirs.
Cores and warranties should be taken care of ASAP before the closure. Keeping up to date should be a prerogative. Also, special order/new returns/stock adjustments should be taken care of likewise. Above all, be honest and available. Vendors don’t need to know your whole story, their only concern is that their concerns will be handled. You will likely see a different side of these folks. Empathy is your friend.
Inventory on hand
Prepare to take a beating. If you are lucky, you will get 50 cents on the dollar from either a warehouse return, or, another store buying selective lines. There’s no mystery here, as someone going out of business is akin to “vultures sniffing out rotting meat.” Keep your chin up and prepare. It’ll still suck, but knowing this going in should factor into the cost of closing up.
Utilities
You gotta keep the lights on. Or do you? Showing the property to prospective buyers is easier without the aid of a flashlight. But the ambiance of such with some scented candles might be the aroma therapy required. I think, if you are closed, cut the power off.
Make sure you drain the hot water tank before shutting off the power. Turn it all off within days after you close unless you have a buyer that has given you some earnest money. When I closed my business, I kept everything going. I still went to “work” every day after closing. Stupid me. Which brings me to the next heading.
Sense of worth
Have you worked there for 20+ years? If yes, you will still arise at 4 a.m., get the paper, drink a pot of coffee and go to “work.” Why? It’s what you’ve done for 20+ years. You have no employees, no business to handle and you are closed. But, you will still go in. Mostly because you still have power, water, phones and internet. You have earned your self worth. I’ll pat you on the back for a job well done. Quit pandering to an invisible audience. Go live the rest of your life. You’ve given testament on how to do it. I’m proud of you. The industry is too. Well done.
This is a brief synopsis of my experience closing my business. You will learn that business is business, your friends are still your friends, but if they are still in business with you, business trumps your friendship. Don’t think otherwise. You will be disappointed, and it’s not their fault – it’s business.
One of my newest most loved phrases is “If you don’t know where you are going, any road will take you there.” The road to Hell was paved with good intentions. The road not travelled is without potholes. I say a travelled road has turns well marked. Drive carefully and look out for the deer.
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