My husband has owned a small (about $350,000 per year in revenue) retail business in a small town for 5, nearly 6 years now. It has survived but he has put everything he has into it, including all of his financial resources to keep it alive. He’s not a man accustomed to failing so he’s dedicated to the end but the strain of keeping this store going is killing him yet he really has no idea how to get off the merry-go-round. He’s 46 and we have four kids so having the business collapse wouldn’t be good for him or the family. No, he didn’t major in business in college and this is a second career venture which may make the pressure greater. Any experienced business folks out there with advice on what to do in this situation before he doesn’t have any other options? I’ve asked him if he’s thought about selling the business but he has no idea how to do that. As originally stated, what are the graceful ways to exit a situation like this? Thanks in advance for all thoughtful replies
Look, you’ve poured almost 6 years of your life into a business that is generating $350k in revenues. Whatever your do, you do NOT walk away from that. I don’t know the details of your particular situation (are your products unique in your town? are they complimentary to another store’s products? are there additional revenue streams that can be generated through services? etc) but I would guess you could sell your business for at least a 2.5x multiple on next year’s projected earnings. That means you should be able to sell your business (there are business brokers that will help you with this, just like real estate brokers help you sell your house) for somewhere around $1M. You might have to stay on as management for some period of time to train the new owner, assure a successful transition, etc but that should allow you to feel more like an employee for a few months until the transition is complete.
If you don’t want to sell, you should remember my favorite saying: Owning is different than running. How can you create additional leverage? Can you hire and train a trusted manager to run the store? Can you merge with another store, in exchange for some cash and ownership in the new venture, and negotiate your new role to be less intensive than your current one? Are there family members who would buy into the business and relieve some of the load?
The last option you might consider is this: can you re-purpose your existing investment (building/lease) to a business that has higher margins or requires less personal time? For example (not necessarily a recommendation), a store specializing in helping people list items on eBay in exchange for a percentage. Maybe import/export. Maybe gourmet food products. Think outside the box. Take a look around you, talk to your customers, find out what people want. The best guiding principal I’ve found in starting and running successful business is this: Find a way to help as many people as possible…the money will come.