67% of retailers plan to exit–are you their advisor?

Practical marketing strategies, backed by insights from our proprietary database of over 80,000 business owners, to help you refine your message, target the right audience, and build a more successful advisory practice.

67% of retailers plan to exit–are you their advisor?

In their seminal marketing book, Positioning: The Battle for Your Mind, Al Ries and Jack Trout emphasize the power of focus in a crowded marketplace. They argue that success often comes from narrowing your offering to dominate a specific niche rather than trying to appeal to everyone.

That’s why here at Advisor Marketing News, we focus each edition of our newsletter on a specific niche within the small business market that we believe holds promise for advisors. Today, we’re choosing to focus on an oft-overlooked segment: retailers.

Many advisors avoid working with retail business owners, perceiving them as too small, overly seasonal, or risky. Instead, they focus on industries like home services or manufacturing, which tend to have larger, more profitable businesses.

This hesitation creates a gap in the market—one you can step into, particularly now, as holiday sales have boosted retailers’ cash reserves.

Some of the world’s most successful companies have chosen to serve the retail segment. For example, Square focused on small retailers, providing an easy-to-use card reader and transparent fees for credit card transactions. Square solved a key problem for businesses previously reliant on cash. By targeting tech-savvy, social media-driven retailers, Square attracted a loyal and profitable following.

In their most recent financial disclosures, Square’s parent, Block Inc., reported $2.25 billion in gross profit in Q3 2024, up 19% year-over-year. Square contributed $923 million of Block’s total gross profit, proving that if you develop a compelling offering for retailers, there is money to make serving this segment.

The Value Builder Analytics team dug into the numbers to understand what makes retail business owners tick—and how you can position your advisory firm as a go-to resource to serve them.

💻 Join us on February 20th at noon EST for a webinar hosted by John Warrillow, author of the bestselling books Built to Sell, The Automatic Customer, and The Art of Selling Your Business. In this webinar, he’ll explore strategies for attracting retailers and preparing them for a lucrative exit.

Register Here

The Goods

When you think of retail, you might picture big-box giants like Walmart or Target. Still, the vast majority of retailers are small to mid-sized businesses—everything from independent boutiques to multi-location specialty chains.

With over 3.2 million retail businesses across the U.S., this sector is a cornerstone of the economy. A closer look reveals that nearly 600,000 retailers—about 20% of the total—generate between $1M and $10M in annual revenue. These businesses sit squarely in the “sweet spot” for many advisors, yet they are often overlooked.

Retail owners have built stable businesses with diverse customer bases, making them less vulnerable to losing key customers. Our data reveals that over two-thirds of retailers say their largest customer represents less than 15% of their total revenue—a significantly lower concentration risk than the average business owner.

Also, contrary to the idea that retailers operate on skinny margins, over half of these owners report that they are actually working with healthy gross margins—north of 40%.

While this will vary depending on the type of retailer you’re working with, many of them will be able to invest in your services and implement your recommendations, making this an attractive segment.

The Problem with Retailers

Despite these encouraging statistics, however, many retail owners feel stuck. Giant retailers and e-tailers (e.g., Walmart, Amazon) have been eating away at their share for years. When asked, nearly half of retailers revealed that they expect flat or marginal growth (0–10%) next year. This compares with over 60% of business owners in other industries who expect to see growth of 10% - 30% over the same timeframe.

The other challenging fact facing these owners is that, while they are almost 25% more likely to want to sell to a third party compared to other business owners…

…retailers face the harsh reality that they will receive offers 12% less than these same owners.

How to Find Retail Business Owners ($1M - $10M in Revenue)

The key to attracting retailers in the $1M - $10M annual revenue range is to find them where they already engage in business conversations and lead with solutions that speak directly to their financial concerns.

📊 Targeted Business Lists – The fastest way to find retailers is through ZoomInfo, which offers real-time company data; Apollo.io, which provides cost-effective and highly accurate contact details; and Chain Store Guide, which specializes in retail-specific targeting. Dun & Bradstreet’s Hoovers is a broader database but less precise for mid-sized retailers.

🏬 Franchisor and Supplier Networks – Many retailers operate under franchise brands like Ace Hardware and The UPS Store or rely on supplier programs such as restaurant distributors and automotive wholesalers. These networks track top-performing independent operators and can offer warm introductions.

🏪 Retail Summits and Expos – Big-box chains dominate NRF’s Big Show, but independent store owners attend targeted events like AmericasMart for boutique retailers, Outdoor Retailer for sporting goods stores, and ASD Market Week for general merchandise sellers. Sponsor an exhibitor booth, attend networking events, or request exhibitor lists to find potential clients.

🛒 Point of Sale and Merchant Service Providers – Square, Shopify, and Clover serve millions of small retailers and host webinars, user groups, and training sessions where serious, growth-minded owners seek financial solutions.

💰 Banking and Lending Partners – Retailers often consult their banks and lenders before making financial moves. Build relationships with Small Business Administration (SBA) lenders, local banks, and merchant cash advance providers to reach business owners when they need advice most.

Part of the reason retailers attract lower acquisition offers is their lack of recurring revenue. Fifty percent of retail businesses report having no recurring revenue, compared to just 30% in other industries.

This lack of recurring revenue creates unpredictability in cash flow and can make retail businesses less attractive to acquirers. Your opportunity as an advisor? Help retail owners implement loyalty programs, membership models, or subscription services that turn one-time shoppers into repeat customers.

Small retailers can create recurring revenue by focusing on convenience and value through replenishment services and service bundles. For example, a pet supply store can offer automatic monthly deliveries of essentials like pet food, treats, and grooming supplies, ensuring customers never run out while building a predictable revenue stream. Similarly, a hardware store could introduce seasonal maintenance plans, such as lawn mower tune-ups in the spring or snowblower servicing in the fall, keeping customers engaged year-round. These approaches not only provide steady income but also foster customer loyalty by making their lives easier and more convenient.

Retailers that add these types of programs often see higher customer retention, greater pricing power, and more substantial acquisition multiples.

Be Where Your Customers Are

Another opportunity when choosing retail clients to serve is to think locally whenever possible. Our research shows that, while retailers value industry experience the most, having a local presence can tip the scales in your favor.

Retailers are Digitally Savvy, and Your Marketing Should Be Too

Retail business owners often communicate with their customers digitally. In fact, over half of retailers report having more than 1,000 digitally connected customers, with 20% connecting with over 10,000. Almost the exact opposite is true for owners in other industries, where over 60% have less than 1,000 digitally connected customers and, in many cases, none at all.

Consider following the retail founders you aspire to serve on the platforms they use most to promote their stores (e.g., Instagram and Facebook). Then, direct message the founders on their platform of choice, explaining how you can help.

Learn More by Joining Our Webinar

Want to go deeper into strategies for advising retail business owners? Join our upcoming webinar on February 20^th at noon EST. Best-selling author John Warrillow (Built to Sell) will reveal:

• How to position yourself as the go-to advisor for retail businesses

• What makes retail valuations different—and how to improve them

• Proven strategies for increasing the saleability of retail businesses

✅ Register Here

👷‍♂️ In case you missed it: Last month, we explored the manufacturing sector and what it takes to attract and serve owners in that lucrative market.

Watch the Webinar Recording

📆 Last call for the 2025 Value Builder Summit, happening March 2-4, 2025, at the AT&T Hotel and Conference Center in Austin, Texas. Network with top advisors and gain insights from renowned speakers, including best-selling authors John Warrillow (Built to Sell), John Jantsch (Duct Tape Marketing), and Rob Walling (Exit Strategy).

Visit our 2025 Summit Website

💻Curious to learn more about how Value Builder helps advisors start more strategic conversations with business owners?

Watch our 5-minute Explainer Video

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This Issue's Contributors

Jason Reilly, Vice President of Marketing; Michael Sarkis, Director of Advisor Marketing; Deanne Kong Ting, Director of Customer Success; and Jen Chou, Senior Graphic Designer.