Looking Out for No. 1
It’s that time of year again for me to visit the doctor for my annual checkup. Annual checkups are something we all do (or should do) to see what kind of shape we are in and if anything has changed from last year. You know what I am talking about: Do you have any new pains? Has anything fallen off your body recently other than your hair? Are there any new lumps or bumps that were not there last year? As many of you know, when you get older, you end up visiting the doctor more and more to get a checkup and to have them give you an assessment of where your health stands in regards to your age.
It pays to be proactive and address any health issue before it gets out of hand. It is a necessary evil that needs to be done and quite frankly, when it is all done and over with, it is always good to know there is nothing wrong and have a peace of mind that will hold me over for at least another year.
Did you know that many people do not visit a doctor for an annual checkup? It is surprising to me how reluctant we are to have an annual checkup when we know it is vitally important to our health and our loved ones. It is always much easier to tell someone else how they should be getting checked out or how they should treat something than it is for us to actually take care of ourselves. This same procrastination applies when it comes to our business, which generally is the main source of our financial livelihood.
Like our health, we tend to ignore our business until something goes wrong or something is broken. Then, we hurry around and try to fix it, putting us into a reactionary mode. Although some may say they work better under pressure, statistics have shown most businesses are more profitable and enjoy more sustained growth when they adhere to planning, goal-setting and the reviewing of their progress.
So then, why don’t more people take better care of themselves and their businesses? Because the things that are easy to do are also easy not to do! It is that simple. The fact is we just elect not to do it because it is easier not to.
What is my point here? My point is even though I didn’t want to go to the doctor to get a checkup, I did it because of a bestselling book I read years ago titled “Looking Out for #1.” Although the title of the book may sound egotistical, it isn’t. The point of the book is just the opposite. You must take care of yourself if you want to take care of the ones you love and care about. And by taking care of yourself that means you must take care of yourself physically, mentally, financially and spiritually.
If you are tired, not feeling well and know you are out of whack, you can be certain that the way you are feeling will be reflected in your performance and the ability to perform your duties and accomplish the things you need to be effective in life. Isn’t it the same in business? When the business seems stagnant and is not growing as you think it should be, what do you do? Do you ignore it and tell yourself that it will get better, just like if the business had the flu or a cold?
Whether it’s your personal health or the health of your business, both could deteriorate because of neglect and because you weren’t looking out for No. 1.
Case in point: Six years ago, I got a call from a prospective client asking me to meet with him and take a look at his family-owned, nine-store convenience store business. The owner was in his early 60s and had a couple of kids involved in the business. The stores were throwing off enough cash flow to give everyone involved a comfortable lifestyle. I reviewed and inspected each of the stores to see how they were operated; what their locations looked like in regards to the present and future marketplace; the quality of the assets; and of course, their profit and loss statements.
I am not an appraiser and unbeknownst to most people, an appraisal is not what they needed. What they needed was an idea as to what their stores were worth on the open market at the present time, which is what I can do since I am active in the selling of convenience stores. Having valued and sold hundreds of convenience stores, I am usually pretty accurate at what a convenience store is worth if it were to be sold in the marketplace at the present time.
Well, after looking at all of the stores and their profit and loss statements, I gave the owner my findings. I told him his company was worth $12 million. Of course, as any owner and prospective seller may respond, he didn’t think the number was high enough. However, I explained to him why $12 million was the correct number and also shared with him the tax situation at the time and how he would save money on taxes if he sold and therefore put more dollars in his pocket.
I explained that the majority of his stores had peaked in their performance based on his operational buying power due the size of his operation. In addition, the towns where his stores were located had already started to shift, and the stores were no longer “A” stores but were now “B” stores, and eventually they would probably become “B-minus” and possibly “C” stores in regards to profitability. Needless to say, the owner for a multitude of reasons decided not to sell his stores.
Fast forward six years later: same owner, same family, same conversation, same review and unfortunately, the same valuation of $12 million. But this time, it was for 10 stores, not nine. The owner had built a new store within the last two years at a cost of just under $2 million, but the market valuation of all of the stores was still only $12 million. What happened during the past six years? Unfortunately, the items I had addressed and presented to the owner six years earlier regarding the stores deteriorating had come to fruition. If the owner had not spent the money to build a new store, the nine stores would probably only be worth $9 million. To make matters worse, the overall tax climate had changed, thereby reducing the amount of money the owner was going to get to put in his pocket.
So, what is the moral of this story? It is to continually look out for No. 1. Get the annual checkups for your health and your business. Make a point once a year to get a business checkup just like you would for your physical body. Find out what areas need to be addressed to keep your business healthy, as well as what you are doing right.
Nobody wants to wait until the last minute only to find out, after working for many years, that they are not in as good of shape as they thought they were and their business will not bring “top dollar” in the marketplace. Don’t wait until there is something wrong, where you have to be in a reactive mode and try to hurry up and fix the situation. We are all guilty of procrastinating and putting off things and we all adhere to the “things that are easy to do are easy not to do” theory, but we can’t fall for any of this. Many people look up to you and depend on you.
Oh, and the story about the owner who I worked with for six years. He ended up letting me and my company help him sell his chain of convenience stores and yes, it ended up selling for $12 million. Funny how reality has a way of not going away and circles back to us.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.