I talk about profit a lot—after all, the Savvy Shopkeeper slogan is work less, profit more! But I don’t talk about profit just for vanity or for making more and more money. It’s so much more than that.
We all hear some snide comments about how you’re “just playing shop” or “have a fun hobby.” Heaven forbid that your business be profitable, sustainable, and make your breadwinner!
Profit lets us compensate ourselves for our hard work, retire our spouses, and support our families. Profit makes us stronger business owners.
And most of all, profit helps us build businesses that have value. Whether you’re just starting your shop or you’ve run it successfully for years, you can create value in your business.
My logic is the same with paying ourselves. We work hard to build these businesses, and that hard work should pay off—both in the form of a regular paycheck and when we’re ready to walk away from our companies.
You don’t have to just liquidate and close when you’re ready to stop running your store. It’s possible to sell! Selling might not be for everyone, but you should keep it in the back of your mind as an option.
So how do you build value into your shop in case you want to sell? Here are six value-increasing pieces to have in your business.
Do you have a team in place that can run the business—WITHOUT you?
If the business solely runs with and around you, it is challenging for potential buyers to envision themselves owning it. Make sure you get everything out of your head and into the hands of your team.
Do you have them in place, and can they run like a well-oiled machine?
Having smooth systems makes handing the business off to the new owner much more straightforward. You can’t hand over your brain!
Create the systems you need for inventory management, vendor documentation, hiring, bookkeeping, and other processes in your store. You’ll thank yourself for a store that is easier to manage, and any future owner will thank you, too.
Have you taken steps to protect your brand?
Particularly if you have proprietary information—maybe you make your own products or have a framework for something you teach—you should consult with a trademark attorney.
If you don’t have that sort of proprietary information, take steps to continue building your brand, especially on social media and via email marketing.
Is what you sell still in demand, or is it a trend that’s fading out? And are you staying on top of trends, or have you neglected this part of your business?
I’ve had conversations with shopkeepers who have told me about business neighbors who wouldn’t stay current with trends. They ended up going out of business.
In addition to product trends, make sure you’re staying current with industry trends like omnichannel retail and the importance of having an online shop.
Do you have a good loyal customer base, and do you have relevant data about them?
Having stats about your inventory turn, loyalty program, and popular vendors readily available adds so much value to your business. Your email list is also a valuable piece of data that future owners might consider part of their decision to buy your store.
Get your financials in order and start profiting!
If you can prove that your business’s cash flow is positive, that you’re profiting, and/or not on a downturn in your business, you can make money from selling your business. Without profit, it most likely won’t sell.
I am by no means a valuation expert, of course. I’m still learning about exactly how this is done!
If you know of a business broker, especially one that specializes in selling independent retail businesses, please reach out to me on Instagram. I’d love to have a conversation with them, so I can continue to help shopkeepers who might find themselves ready to sell.
*Please note that some of the links above are affiliate links or referral codes, and at no additional cost to you, I will earn a commission if you decide to make a purchase after clicking through the link or using the code. I make recommendations because I genuinely believe they are useful to shopkeepers. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
- Email Kathy an audio recording of you saying, “I started paying myself because,” with your reason to be featured in an upcoming episode of the Savvy Shopkeeper Retail Podcast. We would love to feature your story and how the podcast has impacted your business!
- Ep. 78: What is Omnichannel Retail and How to Achieve it
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- Podcast sponsor and Savvy Shopkeeper Retreat sponsor: Tundra
- [00:40] A request from Kathy: tell us, why did you start paying yourself?
- [06:03] Why building value matters
- [09:57] Six pieces to add value to your business
- [10:17] People
- [10:51] Systems
- [11:49] Brand
- [12:41] Product
- [13:35] Customers/Data
- [14:08] Profit
- [20:29] One more reminder—press record and tell us why you started paying yourself!