Tales Of A Fourth Generation Textile Executive: To Close Or To Sell, That Is The Question

Happy Monday Quilt Shop Owners,

Every year there are a number of quilt shops that close their doors.  There are various reasons why you might want to close your doors and here are a few:

• Retirement.
• Loss of lease.
• Not able to make money.
• Having to care for a family member.
• Health.
• Population shift.
• Economic downturn.
• Customer base shrinkage.
• A competitor or chain moving in nearby.
• Online competition.
• Too stressful.

As a buyer of other fabric companies, I always wonder why some quilt shops just close their doors rather than selling out.  For this, I put my law school cap on in an effort to explore both angles of the situation.

On the one hand, I can come up with various reasons to just close.

• It’s quicker and easier.
• No reliance on another person who might or might not be able to finance the deal.
• No buyer.
• No family succession.
• Lease is up and landlord has a new tenant lined up.

I am sure there are additional reasons for closing rather than selling, but those above are the best that I could come up with on such short notice.  That being said, I don’t think the above is as strong as exploring a sale.  To me, there is more to lose by not exploring the sale.  You would be doing yourself a big disservice for your years of blood, sweat and tears.  These are the reasons that I can come up with for selling or at least trying to sell.

• You spent years building the business, why just close it down.  Your legacy could live on under someone else’s ownership.
• A business has goodwill and customers which are valuable.
• Selling would help maximize the amount of money you got for your business.
• By selling, you wouldn’t have to liquidate inventory at ridiculously low prices.  It would also allow you to not have to sell fabric off piecemeal in a very slow and tedious fashion.
• Not only could you get money for the going concern, but also the fixtures and just about everything else that you have accumulated over the years for the benefit of the business could also be valuable to someone else.
• Despite thinking that the business is no longer viable, give someone else a chance to give it a fresh look and fresh energy and ideas.  Don’t assume that no one would want it.

If I were a shop owner, I would at the least take a little time to kick around the possibility of a sale.  I would see if there is an employee who would be interested.  I would consider talking to customers about a purchase.  I would talk to my accountant, lawyer, banker, etc. I would consider talking to a business broker.  I would even put an advertisement out or even hang a for sale sign.  There are lots of entrepreneurs out there looking for opportunities and your shop might be just what they are looking for.

In closing, I would say that you should explore all opportunities to maximize what you get out of your investment before just closing it down and packing it in.  The additional money you would make by selling over closing could end up being significant and important to you somewhere down the road.

Have a great week.

Selling Scott

P.S.  I will not be posting a blog on Monday as I will be at quilt market seeking out new material to finish the year with some good subject matter for my blog.