Month: September 2019

Part 3: What Are the Benefits of a Going Out of Business (GOB) Sale?

In my two previous messages, I shared views on whether selling a retail jewelry store to an outside party is a viable option, and thoughts you might consider in turning a business over to a family member. In this message, I want to discuss the various aspects of having a Going Out of Business Sale Event.

To begin with, if you are convinced that you want out of all involvement with the jewelry business and want to ride off into the proverbial sunset, then a Going Out of Business Sale is probably for you. You should also know that a GOB Sale will produce the absolute best return on your life’s investment, for it is common that a fine jewelry store can do a year’s plus worth of business in only two-plus months during the extended holiday selling season.

But before you decide on a GOB Sale, you need to make sure that you really can retire completely because a lot of people opt for retirement and then regret not having something to do with their time. Have you developed hobbies that excite you, travels that you have contemplated for years, grandchildren to spend more time with, and other life experiences that you want to have? Because some jewelers question whether they want to get out completely, they opt for a retirement/store closing sale and choose to open a small office upstairs to become a “by appointment only private jeweler.” We are seeing more and more of this in recent years.

The two most important issues you need to consider are financial and personal/emotional. Can you afford to retire? Can you walk away from a lifetime of work? Are you emotionally prepared for the next stage in life? Are you okay with leaving your customers, employees, and other relationships in the business? Chances are, if you can answer yes to these questions, you will be best served by having a GOB Sale because the lump sum money you will receive will be worth it.

You’ll need this because you and your spouse/partner will want to at least maintain your current lifestyle, and have the funds to travel, expand on your hobbies, and enjoy the fruits of your labor. You must also make sure that you can live comfortably well into your 90s today, and that you have the money to afford proper medical care in those latter years.

So there you have it. A Going Out of Business Sale has worked for thousands of people over the years, and it can work for you, too. If we can be of help by answering questions, setting you up with projections, and sharing our expertise, please don’t hesitate to contact us.

LINK TO PART 1

LINK TO PART 2

Sincerely,

Jeff Gordon, CEO

Part 2: Transitioning Your Business to a Family Member

In my last message, I discussed the challenges of selling your store to an outside party. It is really hard to get anything close to what you might think the store is worth, even if someone could actually write you a check for it.

In this message, I want to discuss a much more viable option in transitioning a business, and that is by selling your store to a family member (or an employee or employees) who you know and trust, and who will be able to continue the business with the values and fine name you have carried in the community for years.

First, you have to determine a realistic value for the business. There are professional valuation experts who do this for a living and I highly recommend hiring one to establish a fair value to your business. Besides the all-important financial considerations are the personal and emotional feelings you have about the business. If you have no personal or emotional ties to the business continuing, then you can almost always maximize your monetary return on investment by having a Going Out of Business Sale. I’ll discuss this in my next message, so let’s continue with how to deal with a business transition to a family member.

In order for the family member to start fresh, the person may want you to clear out your old merchandise with a retirement sale. This is a very reasonable and viable way to go because it will eliminate most of the aged and unwanted inventory you have accumulated over the years and allow your family member to take over with a more or less “clean slate.” If you opt not to have a major sale event to liquidate the inventory, the price you must receive from the sale of the business, even to a family member, must be much higher than what you would get without a sale. You need to make sure you are financially covered in retirement because there are few, if any, alternatives left after you retire.

In my next message, I’ll discuss the merits of a Going Out of Business Sale, and how I would recommend doing it if you seek this direction. In the meantime, if you have any questions or if we can be of any help to you, please give us a call.

Sincerely,

Jeff Gordon, CEO