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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
FEBRUARY 2025
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Don’t Believe Everything You Read
Years ago, when I was younger and participated in more physical sports, I thought I was invincible, and I remember getting myself in a situation because of skiing that required me to visit my local chiropractor. As I lay on the chiropractor’s table with him pulling and cracking me in several different positions, I remember him saying to me, “Terry, do you know why they call the medical field a practice?” That is because what we do is a practice. We really don’t know the answer, and we just keep trying different things until we figure out what the problem is. It is nothing more than trial and error. Eventually, we get enough information to figure out how to treat the issue. Not very reassuring when you are in pain, but it is a very realistic statement that has stuck with me. I share this story with you because the same principle applies to the convenience store industry and business in general. In the mergers and acquisition world in which I work, there are many articles written with many different opinions as to what is going on within the industry and what businesses and convenience stores have sold for. You read about the sale of chains of convenience stores to a buyer all the time in trade magazines, and some of those articles or news releases are from my company American Business Brokers & Advisors. I also get calls and requests to speak at trade associations about what is going on in the M & A field of convenience stores, and I share my opinion as do others. However, like my chiropractor, the opinions shared in the articles and presentations are opinions and not based on a solid formula. Instead, they are a snapshot of what transpired, the market conditions at the time of the transaction, and the desires of the buyer and the seller at a certain point in time.
Case in point. I received an email from Ray who was not in the convenience store industry but was well versed in the financial field and contacted me in wanting help in valuing his family’s business of convenience stores and fuel hauling service. He said a buyer had already contacted the family, and they needed a second opinion as to what I thought the business was worth. He was not asking me to help him sell the business. Just wanted information. I get quite a few of these requests from business owners who need information and offer to pay me to help them, but I never charge them anything because I am not in the business of selling valuations. I am in the business of helping people because I know what it feels like when you are trying to put a deal together, and you need the information to complete the deal. This is another reason I write books. I like to help people. I asked Ray to send me the address of the business and the last three years of their profit and loss statements. I did the valuation review and called Ray back to share with him my findings. I told Ray I thought his family had a good business, and it was sellable based on where it was located and the trend of the business. Since he had shared with me who the buyer was, I thought the business should sell for a certain dollar range. Ray told me the prospective buyer had made an offer within the same dollar range I had suggested the business was worth; however, based on what he had been reading in the trade magazines and other reports he had read from the internet, the business should sell for a higher multiple than what the buyer had offered and what I had suggested. I went on to explain to Ray that what he had been reading was not applicable to his situation. I explained that because of the business’s location, the lack of
upside potential, and the history of the business, the number offered was the top dollar he was going to get. (Remember, I did not have an ulterior motive because I was not getting paid or profiting from this conversation; I was only trying to help). Ray decided he and his family were going to counter the buyer at a higher price because of what he had read businesses like his were selling for. It was about two months later when I got another call from Ray saying the buyer had raised their offer a little bit but had decided they were not interested, and the deal was dead. Ray said his family was frustrated with the process and was thinking about throwing in the towel and continuing running the business and maybe selling off parts of it. What I have described happens every day. Someone reads about somebody getting a big payout for their convenience stores, and they are convinced the multiple the seller got for their business was the gospel when, in fact, they don’t have enough information to finish a crossword puzzle. Only the buyer and seller can decide what the business is worth, not me or the owner of the business. Ultimately, it is the timing of the marketplace. The same business that sells today was worth more or less last year, but nobody thinks like that. Timing is EVERYTHING. Just like my chiropractor said: It is a practice, meaning right place, right time. Wrong place, wrong time. Get the facts and information. Don’t base life choices on something you read on the internet like Ray did. –Terry Monroe
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THE 5 TOP REASONS WHY BUSINESS OWNERS HIRE A MERGER & ACQUISITION ADVISOR
1. 34% — MANAGING THE SALES PROCESS I always refer to the selling of a business in the same way a pilot flies a plane. There is a checklist to follow. You do not deviate from the checklist because if you do, there is a very good chance the plane will not fly, or if it does, it may crash. The same principle applies to the selling of a business. We have a checklist and a process. Follow the checklist and the process and your chances of having a successful closing are almost guaranteed.
Anybody who has ever owned a business at one time or another comes upon the idea of stepping away from their business and moving to someplace sunny and warm and not having to deal with the hassles of the business. When these thoughts come into one’s mind, it sounds like a good idea until they get to thinking about how much work it is going to be to sell their business when they don’t have enough time now just trying to keep the business running. The next thought that comes into their mind is: “I could probably sell it myself because I have sold lots of things in the past, and I’d save myself some money and know who the buyer would be.” I know this for a fact because of all the clients I have worked with, and I have had the same thoughts, too. But having been in the business of selling businesses for over 30-plus years, I knew I was too close to the subject of why a business owner should hire an intermediary and especially one who specializes in a certain niche like I do with convenience stores, so I did some research on the subject. I found a survey that had been taken with over 500-plus sellers asking them the question, “Does hiring a Merger & Acquisition Advisor add value?” Immediately when someone hears this question, they generally think the reason anyone would hire an M&A Advisor is to find a buyer for the business. However, this was not the case. Listed here are the top five reasons business owners employed and used the services of an M&A Advisor.
intermediary, this was not the case. Finding a buyer is not as hard as people think, but finding the RIGHT buyer who knows what they want, understands the process, and the work it is going to take to complete the purchase, and has the financial capability to close the transaction and not try to claw back on the agreed upon price at the end of the transaction is what you are looking for. 4. 10% — LIMITING THE DISTRACTION TO THE BUSINESS OWNER AND THE MANAGEMENT TEAM A business owner needs to do what they do best, which is run their business, and let the M&A Advisor do what they do best, which is manage the process of selling the business. You can’t do both. You can’t run your business efficiently and try to sell your business at the same time. It is a huge distraction and, many times, will crater the deal. 5. 9% — ESTABLISHING CREDIBILITY It indicated they were serious about selling their business and not just fishing in the market. With the added credibility of using an M&A Advisor, the prospective buyer knows all parties are serious. An M&A Advisor is not going to be wasting their time or resources, and they will be selective as to what buyers they decide to engage with because they are involved for one reason, and that is to get the business sold, not to have a conversation.
2. 24% — NEGOTIATING THE DEAL
Effective negotiators know you can’t represent yourself. When you attempt to represent yourself, you are too close to the transaction, and you tend to take things too personally. Nobody likes to hear they have an ugly baby. You are in an adversarial position, which compromises your ability to look at the negotiation in a fair manner, and many times, you are negotiating with a party that is more skilled at negotiating than you are because they do it on a professional level while you don’t, making the negotiations an unfair fight. When I am selling something I own, I hire an intermediary because I know when I am working for my client, I am a very good negotiator, but when I try to do it myself, I am almost inept. You can’t negotiate for yourself and get the best results. There is a reason why celebrities, sports stars, and politicians hire professional negotiators to work for them.
–Terry Monroe
3. 23% — FINDING BUYERS
Even though most people think finding a buyer is the No. 1 reason to hire an
A HEARTFELT MESSAGE TO MY SPECIAL CLIENTS AND FRIENDS
I want to share a little secret with you. I don’t spend my time cold-calling or pestering people for business. Instead, I focus 110% of my efforts on giving the best possible service I can in helping business owners get the information they need to decide the best options available to them and their families when thinking of stepping away from their convenience store business. In return, they share my name with their friends and business associates.
I would like to take a moment to acknowledge and thank a few of the special people in my life who have helped me build my business to where it is today with their enduring support and referrals. I couldn’t do it without you!
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
Find out, with just three pieces of information about your business, how we can provide a convenience store operator with a market valuation showing what their convenience stores and businesses are worth in today’s marketplace. Best of all, it costs you nothing and it is entirely confidential. Simply send an email to Terry@TerryMonroe , and in the subject line, put “3 Point Market Valuation” Information is the key to everything. Don’t play a guessing game. Get the information you need. TERRY’S ‘3 POINT MARKET VALUATION’ TERRY’S QUOTES OF THE DAY “Everyone has an invisible sign hanging from their neck saying, ‘Make me feel important.’ Never forget this message when working with people.” –Mary Kay Ash “The first responsibility of a leader is to define reality, the last is to say thank you. In between, the leader is a servant and a debtor.” –Max De Pree “First-rate people hire first-rate people; second-rate people hire third-rate people.” –Leo Rosten
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Jeff S., Wisconsin Greg J., Kansas John B., Wisconsin J.D., California M.B., Iowa Don D., North Carolina Wayne B., Missouri Dave G., Illinois Ryan H., Ohio Mark F., New Mexico T.T., South Carolina
Jim F., Indiana Mark W., Nebraska G.P., Kansas Wayne C., Missouri Bill F., Illinois Josh S., Minnesota Dennis K., Ohio –Terry Monroe
CHOCOLATE DREAM EQUALITY GROUNDHOG
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 Don’t Believe Everything You Read Does Hiring a Merger & Acquisition Advisor Add Value?
Sudoku Solution
A Heartfelt Message to My Special Clients and Friends
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Discover Terry’s ‘3 Point Market Valuation’
Your Personal Assistant — Anytime, Anywhere
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Have you ever wished you had a personal assistant to help you stay on track and organize your life? Thanks to the latest in AI, you can have a sidekick in your pocket who knows all your long-term goals. Voice Notes AI is a handy app that allows you to record notes on anything from your stray thoughts, to-do lists, or ideas. It’s not just about giving you reminders — it’s a powerhouse for organizing your day, managing tasks, and even helping you brainstorm ideas. PENCIL IN YOUR PERFECT DAY Voice Notes AI is an intelligent way to plan your day and the tasks you need to complete. It will ensure you’re always in alignment with
your long-term goals. Record your priorities, what you want to accomplish, and details about your life. Then, start your morning by asking your AI assistant to provide a plan for the day and give tips on what would help you get closer to your goals. The app then pulls information from your recordings and cross- references it with your calendar to create customized daily lists. TURN PHILOSOPHIES INTO PRODUCTIVITY To get even more personalized suggestions, you can teach your AI assistant about the philosophies, beliefs, and books that drive and inspire you. Next time you pick up a book or think about a mantra that moves
you, record your thoughts using the app. Your digital assistant will consider that information and provide specific insights when you ask for daily to-dos or check in on your progress. UPGRADE TO YOU 2.0 Your AI assistant can teach you about yourself and help you develop better habits. Once you have added several recordings to the app, ask it for a personality analysis as a fun way to learn how you think. You can also ask it to help you create an effective wind-down routine at the end of the day to help you for the rest of the week. Try making a “worry box” where you record concerns and ask your assistant to give suggestions on overcoming them.
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800.805.9575
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