[Musings of a Game Store Owner] Like a Boss- Exit Plan
Throughout the “Like a Boss” Series, I’ve talked about the realities of owning your own business and being your own boss. We’ve discussed a lot of issues surrounding starting up, talked about management, some operations and day to day issues as well as problems an owner can encounter.
What we haven’t talked about is how (and when) to get out of business.
It might seem counter-intuitive to plan to close your business, but in my opinion it’s an essential step. Knowing not only how to go about shutting down but also when to do it can be truly good for your planning process and how your overall operations work in day to day life.
HOW does planning when and how to close up shop help you? The simplest way is in clear thinking. If you have a direction and idea of what to do when, it can help a lot of other aspects of your business fall into place. Despite last week’s discussion, we’ve found that planning for “A” has helped us think about the rest of the alphabet and our approach towards those concerns. This gives us a clear direction and shapes our perspective on all of our activities either towards that goal or in avoidance of that outcome, depending on what “A” was.
What does that look like? I’ll show you a couple of exit plans to try to explain.
The first is the “Hit By a Bus” plan.
You should have a contingency plan for what happens to your business if you are no longer able to operate it- if you are in a horrible accident or die. Even if it’s extremely simple like “sell everything and pay off the bills”, you should delineate those wishes clearly; preferably in writing.
This will give other people around you some direction and idea of what you expect of them. Your support network obviously wants you to succeed and live forever, but they will feel a lot more in control if they know what to do when things go sideways.
Be specific about the ways to accomplish your plan. Is there insurance in place? If so, who is the carrier? Where are the papers for it? Who do you want executing these provisions? Is there a single CRUCIAL bill or debt that needs to be dealt with first? Second? Etc.
If you are still living but incapacitated, do you want your family/friends/network to continue to operate your business or sell the inventory? Talking about and planning for the morbid seeming stuff is actually really freeing and can give you a lot more autonomy as well as a much better idea of what you expect on a gut level, day-to-day basis.
I’ll admit that TheDude and I haven’t done everything I’ve talked about in this series (at least not at first). Many of the things I’ve brought up have been discovered through trial and error or through watching other businesses and learning from their example. A specific instance came up very recently.
A store about two hours from us recently suffered an incredible loss. The owner, a long time staple of the community, passed away. This store was an absolute hallmark of the community, and the loss of the owner truly rocked the community. The idea of losing both the store and the owner was absolutely devastating to most gamers in that area, and a group of them collaborated to buy the business from the family.
This certainly wasn’t in anyone’s plan- it happened organically and offered the best possible solution to both parties. The family didn’t have the knowledge, ability or interest to operate a small niche business, and wasn’t saddled with the additional burden of trying to loosen themselves of the property and inventory at an already emotionally raw time. The community didn’t lose an emotional cornerstone of their gaming lives, and no single person was responsible for funding the buyout.
We also saw an entirely different kind of exit plan this year- and that was a
There’s a store roughly an hour north of us that opened because the owner loved gaming, but there wasn’t a store in the area. So he opened one. He built a very successful business and pretty loyal group of customers for his market. He helped generate new passion for gaming in his area (to the extent that a competitor opened up this past year) and had a beautiful array of products. (His basement of backstock is legendary.) But he didn’t want to be a game store owner. He didn’t love operating his own place and he missed playing- a LOT.
So he let his community know that he was trying to sell the business. I’m not sure of the particulars, but he found a buyer. He brought the buyer in and had the guy shadow him for a couple weeks from what I heard- and introduced him to the community. The new and old owner made the transition pretty easy, and announced to the community that hey, new guy was in charge now. The customers have been very responsive and the business seems to be doing well considering the change.
The old owner knew he wanted out and planned his business to get him to “retirement”. The planned exit doesn’t have to be after the fact. You can plan for “I want to quit after I make XXX dollars” or “after I turn YYY years old”, or any number of things. Having the plan for being able to get out is a great way to know that no matter what, you’re covered.
So far all my examples have been assuming that your imaginary business is successful. But you should also have a FIRE SALE plan, in the event that things don’t go well for you. No one wants to think about that, but it does happen that businesses fail, and being prepared for how to get rid of as much debt as possible is generally a good plan.
Having an exit plan is an executive decision. You can decide to postpone it because hey, you’re busy trying to OPEN your business, but knowing that planning for the end is a possibility can only help you down the road.
PS: So far our plan is : keep doing this for as long as we can. Then punt. (I said we don’t always do the stuff I talk about here!)