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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
MAY 2024
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Now, if you wanted to sell your house, then putting a sign out in front of the house would be a good idea, but your business is not a house. It is a living, breathing entity that supports you and your employees and needs to be treated with tender care.
valuation, or potential buyers with internal parties. If you care about confidentiality, you will realize that you need to hire an M&A Advisor to control the process and maintain confidentiality. If you try to sell the business yourself, your network of potential buyers is limited. You can contact your lawyer, your accountant, and, God forbid, your vendors, which is the kiss of death when it comes to confidentiality. Nothing will travel faster through the system than telling a vendor you have your business for sale. Once, I got a call from the owner of a chain of convenience stores who said they wanted me to help them sell their stores, but after talking to one of their vendors, the vendor told them not to use an M&A Advisor because they would have to pay them. Well, duh! Instead, the business owner sat and waited for the vendor to try to find them a buyer, which the vendor was not trained to do, and the vendor let it be known to the public the owner was selling their stores, which got back to the office staff who then quit. The supervisor overseeing the stores quit, putting the owner of the stores in a position where employees were quitting, and the business was going down in sales all because the vendor was trying to do something they were not trained to do. In essence, the leak in confidentiality cost the owner of the stores millions of dollars, if not more. I know when I get the opportunity to work with a business owner and help them to exit the business and sell their stores, they call me because they know I have been through the process of selling a business hundreds of times, and I sell businesses professionally for a living, plus I have a large network of buyers I have accumulated from working in the convenience store industry for over 20-plus years who I know have the money and will get the deal closed. Continued on Page 3 ...
As everyone should know, when it comes to selling a business and not selling a vehicle or piece of property, there is a process that needs to be followed in order for the sale to be successful. It is no different than when a pilot gets ready to fly an airplane. There is a process for the pilot prior to take off, during take-off, while in flight, and before landing. Because there is a process for pilots, and they adhere to the developed process, the idea of flying in an airplane has become one of the safest and most convenient ways to travel long distances. The same is true when it comes to preparing and selling a business. This is one of the main reasons business owners engage the services of business brokers or Mergers and Acquisition Advisors, such as myself, when they decide to sell their business. A lot has been written about selling a business, what it entails for business owners and advisors, and each of their duties during the process. But one thing that needs to be addressed is extremely important, and something I always get asked about when it comes to selling one’s business, is confidentiality. Every business owner I have ever worked with is concerned about confidentiality. If they were not, then I would not be talking with them; instead, they would have done something dumb like put a sign in front of their business telling the world their business was for sale which would kill the idea of confidentiality. What One Thing Can Hurt You the Most in the Selling Process?
Selling your business is more complicated than selling your house.
There are reasons as to why you want to maintain confidentiality during the sale of your business.
1. To begin with, change makes employees nervous. News of a potential sale can quickly create unrest among your employees. They will be concerned as to whether they will have a job or not. They will also be concerned about whether their pay or salary will be changed. I have seen times when confidentiality was broken, and word got back to the employees about an impending sale and people quit without even giving the new owner a chance. The fear of change was that great. 2. If your competitors hear there may be a possible sale of your business, they may try to poach some of your key employees by telling them they may be losing their jobs, so they need to come to work for them instead. 3. Leaking the word too soon about your business being for sale before you are prepared to share it with your employees and the world can sometimes impact your relationships with your vendors. I have seen many times where vendors with whom the business owner thought there was some loyalty because of their long-standing relationship disintegrated because the vendor knew their customer was on their way out and refused to help them in the process of selling their business. Because of the need for confidentiality, there can be no sign out front promoting a sale, no advertisements, and no discussion of strategy,
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7 Days, 4 States, 100 Exhibitors …
AND 2 OUTSTANDING OPERATORS
To give you an idea of how much I travel, in March, I left my home in Florida and was on the road for 10 days, driving 3,600 miles to visit clients and look at convenience stores. That doesn’t count the time I spent on airplanes. The first of April was interesting because, within seven days, I was in four states and attended the MPACT trade show in Indianapolis, which featured well over a hundred exhibitors. Then, I finished the week of travel by meeting and talking with two outstanding operators who shared with me how they were increasing the profitability of their stores and were using tactics I did not see at the trade show. Anyone who has attended a convenience store industry trade show like the MPACT show knows what they are going to see when they get there, which would be all the latest models of tanks, MPDs, software programs, fuel providers, and the exhibits of the food and beverage vendors whose products are being used in the daily business of operating a convenience store. These vendors are the obvious ones I recognize and understand their roles within the convenience store industry. But as I walked the trade show floor, I saw lots of vendor exhibits that I had no idea what their role within the convenience store business was or what their product or service was and how it was going to help a convenience store operator. In my mind as an old retailer who enjoys marketing, I thought to myself: These people need to do something to enhance their presentation to the prospective audience they are trying to serve. But it was not my place to tell them I thought their presentation was pretty lame and to mind my own business.
to how the store should be laid out and how the products should be displayed. By taking control of how they wanted their products to be displayed, it had increased the sales of these products by 30% or more. When I asked them how they did this, they said they hired a consultant who specialized in the selling of retail products to help them understand the habits of a convenience store customer rather than depending on their vendor. I knew what they were telling me was correct because prior to meeting with them, I had already visited their stores and seen what they were talking about. The second operator is probably one of the best operators I know when it comes to selling ancillary products that we used to call “tchotchke’s,” or in layman’s terms “trash & trinkets.” Instead of meeting with my second operator at his office, he said to meet him at one of his buildings next to his office. Upon entering the building, I found myself in a warehouse filled with tools and equipment and some shelving and display cases. The first thing he says to me is: “I want to show you something.” Then he had me stand in front of a normal wire rack display used for selling normal products, but what was different about the wire rack was the upper shelves had been lit with LED lights, and the bottom half had not. He then says, “Well, what do you think”? I said the products that were on the top shelves and highlighted looked great and the bottom half looked blah. Then he walked me over to a cabinet with glass sides and interior lighting and showed me the same thing. Lastly, he pulled out his phone and showed me a photo of cabinets that sit behind the checkout counter in a convenience store and how the items on the shelves had been arranged, which looked great. Then he looked at me and said, “Can you see what a good presentation can do for your sales in a convenience store?” He kept shaking his head as he was talking to me saying he didn’t understand why other operators in the convenience store industry didn’t get it and how something so obvious was not being taken advantage of when it has increased his sales immensely. In meeting with these two operators and visiting their stores, I learned more about how to increase sales in a shorter time than I did in the two days I spent on the trade show floor in a sea of exhibitors. With the two operators, I knew what they were selling, but with the exhibitors, I still don’t know what they are selling. I think these two encounters prove you are never too old to learn if you are willing to go out into the world and see what is working.
This leads me to the two outstanding and interesting convenience store owners whom I met outside of the trade show.
Both of the convenience store owners I met with own about 15 stores, and both are very profitable and extremely sharp operators in their own way.
Since I have been working with convenience store owners for over 24 years, been in hundreds of convenience stores, and met with hundreds of convenience store owners, you would think I would have seen about everything there is to see in a convenience store. But these two operators, in less than an hour each, showed me how they increased their sales, sometimes by 30%, by changing the presentation of what they were selling. The first operator showed me how they took control of the design of the floor plan of the store and arranged the products on the shelves and the height of the shelves and changed the number of skews of the products they were selling instead of having their vendors dictate to them as
–Terry Monroe
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
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"HIDDEN WEALTH" The Secret to Getting Top Dollar for Your Business
► What is the value of what you are selling? ► Want to make sure the sale is confidential? ► Want to sell everything together & fast? Terry has sold over 857 businesses. His book tells you what to do and more importantly what NOT to do when selling one's business. GET YOUR FREE COPY TODAY! Email Terry@TerryMonroe.com Put FREE COPY in the subject line for your free copy of "Hidden Wealth", a ForbesBooks publication.
... continued from Cover At American Business Brokers & Advisors, we have a process for maintaining confidentiality and know the damage a leak in confidentiality can do to a successful business. If confidentiality is broken, it is hard to repair. Next time you board an airplane, you will be happy to know the pilot has a process they use. They will follow their checklist to ensure the flight is safe and non-eventful, which is the same thing I want for my business owners when it comes to helping them through the process of selling their business — a confidential and non-eventful process from the beginning of the sales process to the end with a successful closing. TERRY’S QUOTES OF THE DAY “In any given moment we have two options: to step forward into growth or step back into safety.” –Abraham Maslow “Growth is painful. Change is painful. But nothing is as painful as staying stuck somewhere you don’t belong.” –Mandy Hale “The people who are crazy enough to think they can change the world are the ones who do.” –Steve Jobs
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MEMORIAL MOTHER RENEWAL VETERANS
–Terry Monroe
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Sudoku Solution
Thinking About Selling Your Business in 2024?
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How to Analyze and Interpret Trends in Forex Charts
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READ TRENDS LIKE A PRO FOR SMART FOREX INVESTMENT
Investors buy, sell, and exchange real-world currencies through the foreign exchange market (forex or FX). It is substantially distinct from other markets: • It’s the largest financial market in the world. • It determines the exchange rate for currencies around the world. • It’s open 24/7, so trading can happen at any time of the day. • Currencies are always traded in pairs, one country’s money for another. • Currencies are a lot less volatile than other markets. Some currencies, like the U.S. dollar or Japanese yen, are “free-floating,” which means their relative value is determined by free-market forces, such as supply-demand relationships. Other countries, such as Saudi Arabia and Panama, are “fixed float,” meaning a country’s governing body sets its currency’s value relative to other currencies.
There are several advantages to trading on FX, including fewer rules, no central body oversight, and no fees or commissions. There are also disadvantages, like being unregulated, relying on the currency’s appreciation, and traders not having complete control over their trades. Information is an essential ingredient to achieving a profit. Investors must have data to speculate successfully, so they must read expansive data charts. The shifting trends value is constant; charts help investors visualize them to make the right decisions. If you’ve invested in forex, you’re looking for these trends. They’re among the most critical factors determining when you buy or sell. • Uptrend: Prices trend toward a higher price, like climbing a mountain. This is the time to buy. • Downtrend: Prices drop downward, like skiing the aforementioned mountain. This is the time to sell.
While many websites offer online charts, developing this analytical skill gives you a deeper understanding of the market. Open up a candle chart and look at the currency’s current value. Candle charts depict price as a line with peaks and valleys. Follow the line backward and find two recent highs and lows. Prices are constantly changing, but you must determine the overall direction of the currency’s value. Figure out if these points are going upward or downward. This determines the timing of your trades. Once you plot the chart, you can see where the currency’s value is going and invest accordingly. The forex market is full of opportunities. Solid chart analysis skills are necessary to take advantage of them and make a profit.
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