How to Close a Retail Store

So, how DO you close a retail store? That seems to be a common question among retailers these days with the economy in a tailspin, but the more important question is this: “How do you close a retail store PROFITABLY?”

And that is a question that doesn’t seem to get one good answer. Well, for most independent retailers, if the economy has really beaten you down and you haven’t been able to establish any sort of marketing plan to accommodate for the economy, then closing your business is definitely the best answer to your woes.

With the question being simple in context, the answer is somewhat complex, but this is an area of consulting I’ve been doing for quite a while now, so I’ll lay it on the line with you.

First, do your research. I’ve never been one to candy coat anything for anyone. I tell it like it is.& So, go to Google, Yahoo, or your search engine of choice and search on any term(s) you can think of pertaining to this topic. There you will find plenty of companies and consultants that provide this service. This is where the fun begins.

Just like any other service provider you would seek out, you’re not going to hire the first one you contact regardless of what they say or how good they seem, which is why I always tell people that contact our offices, “Call all the other guys first, THEN get back with me”. This may seem pompous to some and maybe even stupid to others, but the reason I do this is because I know that, A.) I won’t work with everyone, and B.) No one else in the market place offers what we do. There, I said it.

So, back to the question at hand: How to close a retail store. It all centers around a solid marketing system. Well, unless you are wanting to close your business because of old age, retirement, divorce, death in the family, or any other reason NOT related to poor sales and slumping economy, then you may not know exactly what a solid marketing system means, otherwise, you probably would not be wanting to know how to close a retail store in the first place. Make sense?

Any and all successful businesses revolve around one simple, yet complex, principle: solid marketing systems or what I like to call the Retail Marketing Triangle: Marketing, Merchandising, and Salesmanship, all of which play a very important role in a solid marketing system for retailers.

Here are some questions you need to ask yourself to get started:

1. What kind of relationship do I have with my existing customers?

2. Do I have the contact information of all my existing customers?

3. Have I been staying in touch with my existing customers with direct mail, email, and phone calls?

4. Is my inventory good? Is my store full? If so, of what?

5. Have my sales been declining? If so, why?

6. Am I always actively seeking new customers?

There are literally dozens of other prevalent questions, but these are some of the main ones that help you determine where to start. By the way, closing a business is NOT something you want to do yourself UNLESS you have a system to follow. I’ve written a book about it, but I’ll provide a link for that at the end of the article. The book I wrote tells basically how we set up for and manage a successful retail liquidation Sale, beginning to end, and most times get a 90%-140% return on inventory cost for our clients. Does that happen every time? No.

Anyway, the reason you must ask yourself all these questions is that the answers will play an important role in how successful your Sale is. For example: if you have no customer database, then what we do is strategically build a database saturated for your close proximity area based upon who your ideal customer would be. Then we send out a very unique, custom sales letter about your store and your Sale, which is presented in an oversized invitation format. The key here is the copy of the sales letter. Writing copy is no easy task, but there are many books available on it should you be so inclined to write your own. The point: while this method will bring LOTS of people into your store to launch your Sale, if done properly, it will ALWAYS be better if you have an established list of regular customers to market to.

Next, your inventory. So many people contact me about doing a Sale for them, they send me pictures of their store, and the shelves and counters are half empty, and what they do have available is either old, outdated, or undesirable. I used to think this was common sense, but I’ve learned never to be surprised by things like this. Listen, if you want to close your business, if you want to do it profitably, then make sure you have a healthy, full inventory you’ll make a whole lot more money. Oh, and be sure to hire a professional. Oh, and when you hire a professional, be sure to ask them details about their marketing systems. You’ll be surprised at the different things you’ll hear. Let me just put it this way: there’s a lot of candy coating going on out there.

Now, you will have to make regular price reductions throughout the Sale, but you’ve got to be smart about it. Don’t start too high (most people not in the know start too high including many professionals), but also be sure to not mark down too soon. That could cost you money.

There’s so much more to tell, but I’ll leave it at this: If you’re going to be closing a retail store, then your Store Closing Sale must be well planned. If you already have a website, then be sure the company you use to help you actually builds or integrates a lead generation page or site for you to help you quickly establish a hyper-targeted list of customers that you can market to for free during your Sale, and secondly, make sure you have someone to help you that is truly qualified with a mind for CURRENT marketing methods.

You can’t afford not to. Learn more about how to close a business here.