Whether you are building your employee schedule for next month or investing in a new category without knowing how it will perform, you are often asked to make decisions that would be simpler if you had a crystal ball. However, you make those choices for your business based on data and evidence. For example, you use sales records from the same dates last year to anticipate how many associates you need on the floor this year. And you keep track of product requests from customers, you stay on top of trends and you track sales in similar areas to decide how much of a new category to bring in.
Planning for the future is present in all aspects of your business, but how often do you think about the future of the business itself? If you haven’t considered a succession plan for you and your operation, no matter how close or far you are from retirement, the time to start is now.
According to industry data featured in Hardware Retailing’s 2019 Market Measure report, industry sales are projected to grow about 3 percent by 2023, but the number of hardware retail outlets will shrink by about 1.5 percent. That doesn’t necessarily mean stores will close, although that is the case for some operations.
These estimates by the North American Retail Hardware Association (NRHA) and Hardware Retailing suggest the industry is on track for a fair amount of consolidation. As more owners reach the age of retirement, they have a few options: They can close, they can pass their business on to someone within the company or their family or they can sell to an outsider who may or may not keep the business intact.
NRHA staffers regularly talk to retailers throughout the U.S. and Canada, and through those conversations, we have learned there are a variety of reasons retailers are choosing not to sell their operations to the next generation. Whether it’s their children’s disinterest in the family business or too much competition in the market, many people share valid but unfortunate reasons for closing. However, some of those retailers who choose to close may have been able to preserve their business if they had created a feasible succession plan with enough time to execute it.
NRHA’s mission is to help independent retailers become better, more profitable operators. To earnestly live up to that mission, we are committed to providing concrete, actionable solutions to keep the independent home improvement industry growing beyond just the next generation.
In each issue of Hardware Retailing in 2020, we will be touching on the most critical components of succession planning to help you get organized. With input from industry experts, insights from retailers who are executing their own plans and exclusive research to gauge the status of succession planning in the industry, this yearlong series will serve as a comprehensive guide to help you kick-start a succession plan to preserve your business well into the future.
To be sure you’re the first to see each installment, click here to subscribe to receive the digital edition of Hardware Retailing in your inbox every month. See the resources from each issue below.
Start the Conversation
Talk to your peers about succession planning on the NRHA Forum. Click here to contribute to the discussion about what your plans are, questions you have about the process and what worked for you or what didn’t.
The Data on Succession
NRHA surveyed retailers about their succession plans in 2016, and their answers were the basis for this study. Click here to read the complete report. In 2020, Hardware Retailing is revisiting this survey to find out what has changed for retailers when it comes to succession planning.
Compare and Contrast
In 2016, Hardware Retailing profiled several retailers in a two-part series. Click here to read the first installment, which highlighted retailers who sold their businesses, and click here to read the second, which featured buyers.
Asking the Right Questions
One of the supplements from the two-part story in 2016 was a quiz to determine if retailers were ready to buy an operation or sell their own. Click here to see if you’re ready to sell, and click here to gauge your readiness to buy.
Mr. Oswald’s Take
In the December 2000 issue, even Mr. Oswald had questions about the future of his business. What would his operation look like today if Fuller had taken over? Click here to find out.
Hardware Retailing consulted with Castle Wealth Advisors president and CEO Gary Pittsford for this series. Click here to read a complete conversation with Pittsford about the state of succession planning in the industry and why retailers should start thinking about their futures today. For more from Pittsford, click here to listen to his episode of the “Taking Care of Business” podcast with host Dan Tratensek.