So we are pretty seriously considering closing our newer location (been open 4 years). I am curious as to how you go about doing it. We will be selling the building without the business. We will be closing the store then putting it up for sale. Financially I think we will be better off with it closed, we will be able to focus on other location more, they will be able to put for sale signs on property, tons of headaches will go away.
We tried to sell the building and remain open about 2 years ago only had 2 offers and both fell through. It is a bit of a twist with it being closed and hoping for it to sell.
Any advice on what we need to do to get our closing list going? Any other thoughts this is just a crazy time for us right now and trying to figure out the best move.
Also do we need to contact the bank? We personally have a loan for the building and the business has a loan for some equipment. We will still be able to make these payments without a problem but just wondering if we need to touch base with our lender.
What do your loan documents say? My guess is that if the equipment loan is secured by the equipment you are required to tell them. It is agood idea in any case.
In general, my advice is always to keep the banker in the loop. If they are local, they are going to know you are closed within days anyway, but will be wondering all kinds of things about why you did not tell them what was up.
In order for bankers to work with you, they need to trust you. Trust has a lot to do with feeling like they are in the loop.
A closed business is worth nothing. Your going to sell them four walls, equipment that Can not be sold for More than $10,000, and oxygen. I have been there done that. I personally would not pay for a closed restaurant. At least give someone a reason to buy it. Offer them systems that work. Recipes that are proven. I’m gonna go out on a limb and say you pretty much know what your doing going by you have more than one location. A great sale point is you just can’t make it work b/c your heart isn’t there. You have too much on your plate and with the right ownership this place will work. If your gonna close it anyway holding a note shouldn’t kill you. Good luck!
The business IS worth nothing because we can’t sell it. We have another location and the recipes, procedures, systems and etc. are used there. We will leave all things in tact as far as equipment goes but don’t want to leave any evidence of our business practices (our other store is only 17 miles away) I realize we are only getting the value of the 4 walls.
Just never closed a business. Don’t really know the steps as far as employees…when do we tell them?
I guess I just was looking for some insight on what happens when you close a location.
I am looking forward to focusing on our first location which is the bread and butter of our whole business. We have not been owner present since we opened the 2nd location and sales have continued to rise. (We have worked there on occasion but not a solid presence, we have a fantastic management team and employees who are the best of the best so I know we can be more productive putting hours in there rather than location 2 which can’t seem to get it together and is not doing well.)
After 7 years of operating two locations, I pulled the plug on #2 at the end of June. My locations were only 8 miles apart (way to close except during boom times) and I am finally back to one store. In my case, I have recouped at least 30% of sales (probably more) and more importantly, am able to focus completely on my “breadwinner”.
Don’t know what the protocol is for closing other than making sure your staff and landlord hear it from you first. No regrets, no looking back. I’ll hopefully be rid of the equipment sooner rather than later, but at quite a loss, obviously.
I sent out a mailer to my customers (addresses are kept in our POS database) with a brief explanation, as well as a carefully crafted letter posted one month before we closed. (Staff was informed before either were published).
Emotionally, I wasn’t at a place that I could acknowledge the solution until a few months ago, but from a business perspective, I probably should’ve done it sooner. The economy will not likely improve anytime soon for very obvious reasons and therefore we must do what is best for us, regardless of how it negatively impacts those we employ.
I was fortunate enough to be able to keep at least half of my staff and expand my operations at the main store. This may not be an option for you with a 17 mile distance between the two.
Maybe you can contact the Treasury Secretary to see if you qualify for any leftover TARP funds. Perhaps idle restaurant equipment qualifies as “troubled assets”.
Wow thank you so much for your post. Just thanks. Life is just too short. I keep trying to remind myself that this is a great business decision. Sure the pride is taking a bit of a blow but I keep trying to remind myself that being humble is a blessing not a curse.
Sorry I didn’t post sooner. I read your post when it first hit the Tank and thought about responding but not sure exactly what to say.
Smart and successful investors never become attached to their investments and perhaps that is the difference between a business owner and an investor (although we certainly are investors as well).
I’m sure we’ve all done quite a bit of soul-searching and sometimes the unthinkable becomes the inevitable under the right (or wrong) conditions.
While it’s certainly a blow to the ego (I had a chance to bail 4 years ago but instead chose a new location), we’re not getting any younger in this business.
“Maverick, your ego is writing checks your body can’t cash” from the movie TopGun
Sometimes a slice of humble pie tastes mighty good compared to the slow burn of “success”. There are some things that are more important than being a “pizza mogul”.