ADVICE ON WHAT TO DO IF YOU THINK CLOSING IS THE ONLY OPTION

No matter how well you run your business, it is possible that closing the business is the only option.

Your landlord may not be prepared to negotiate on rent.

The area around you may be moving away from retail due to major development.

You may be ready to return and unable to find a buyer.

Your local population may be falling below what is sustainable for you.

Regional economic circumstances may have changed.

The lease situation is the most common. There is no point in signing a lease you feel you cannot honour. So, closing at the end of the current leased may be the only option. If this is the case, ensure you clearly articulate this to your landlord, well in advance, without emotion, with evidence to support your claim.

The advice here is designed to help you exit in the most beneficial way possible. Part 2 of this advice has a plan B option for you to consider.

The earlier you know you are closing the better. Our recommendation is six months out or more.

Here are options for you to consider. Note, you may want to scroll down to Plan B where we consider options outside of closing the business.

1. Know your key goal.
   • If it is maximize your cash position then everything you do must be about that ahead of everything else. To some, this may mean discounting to get cash now while to others it may mean maintaining the highest margin but pitching products differently to gain the maximum margin.
   • If it is to gently farewell the location without too much concern about cash then have fun.
2. Have a date. Knowing the date you will close is vital. This is the drop dead date by which the shop needs to be empty of stock. Everything you do from hereon in aims to have you ready for that date.
3. Set key dates.
   • The date you stop ordering stock.
   • The date you advise magazine distributors.
   • The date you setup your last LayBy.
   • The date you cancel any advertising commitments.
   • The dates on which you farewell staff members.
   • The dates on which you return fixtures provided by suppliers.
   • The date you lodge your mail redirection.
   • The date you cancel the phone lines.
   • The date you cancel business insurance, and claim a refund.
   • The dates of your planned sales (see below).
   • The dates from which you no longer order stock from each supplier.
4. Know your liabilities. Get all your records up to date: debtors, creditors, payroll, long service leave, termination pay, supplier fixture obligations, your copier contract, any vehicle lease, supplier forward orders, supplier stock return obligations, future charity commitments and the lease – what you have to do when you leave as leases are usually very specific about the state of the premises when you vacate. This will guide you as to what you need to have a clean exit that does not damage your credit rating or your standing as a company director.
5. Clear the decks. Sell, give away or throw away anything you will no longer need in the business. De-cluttering is vital to you having a commercially successful shut down. Now is the time to get rid of anything you will not need in the last months of trading.
6. Get all your stock into one location. Many businesses we see have stock at home, in storage and elsewhere. As the business prepares to close, all stock needs to be in only the location from which customers can purchase.
7. Be radical. Make shop floor changes you have been too scared to make over the years. You have nothing to lose now.
8. Prepare a plan to quit stock. Know what you will discount and when. Do this over a staged process. If you have not communicated the decision to close, use other reasons that make sense for the discounting and sales.
9. Establish a communication plan. Know when you will tell people you are closing and what you will say. Our advice is to stick to the facts. Keep emotion out of it. If it is because of higher rent, be careful to not bag the landlord. Stick to the truth as that is less likely to harm you.

Plan B. Establish a second location.

The moment things look tough in a lease situation, consider a Plan B alternative, something that could give you another business location, providing you with options if the main location does not work out.

Being a Plan B and considering that you probably have no or very little capital available for another business, this second location needs to be approached differently, with an all bets are off approach.

Here are some ideas for consideration. Many of the ideas are do nots. This is designed to get you thinking of what the new business could be by not doing what you are doing today.

1. Seek a location away from your current location. This helps you connect with different shoppers.
2. Cheap rent.
3. Easy access an easy parking are important.
4. The space must require little to get the doors open and trading.
5. Do not spend a cent on the shop fit.
6. No lotteries.
7. No tobacco.
8. No agency lines.
9. Choose at least three major traffic drivers, categories for which this business will be known in the region.
   1. Homewares – the full model line from key suppliers.
   2. A full line of plush from birth to retirement.
   3. Pop culture – beyond Pop! Vinyls and way beyond.
   4. Fun, fun and fun. So people come to you for fun and good times. IS, MDI and more.
   5. Guy gifts. Yes this is tough but fi you think it is tough how tough do shoppers think it is.
   6. Inappropriate gifts. Be known as having the naughtiest and funnest gifts.
   7. The biggest range in the region.
   8. But a carefully curated selection of captions.
10. Look at secondhand shops similar locations for furnishing items for the store. Ideally you have a long table down the middle with chairs on either side. This is where people can sit and play with what you sell, including doing jigsaws.
11. Keep your opening hours tight and your labour costs low.
12. Don’t put anyone in this shop who has newsagency experience.
13. When you are in this shop you are not a newsagent.
14. Throw everything you can at this. But be smart as you gave no money to spend.
15. Create a separate profile on Facebook, Instagram and elsewhere.

This Plan B idea could start as a pop-up. The goal is for you to have fun and see where it takes you. That is the key – let it take you to places you would otherwise not get to.