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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
SEPTEMBER 2024
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she had been told of the upcoming closing. He worried about his vendors. He worried about the buyer finding something wrong with his stores and not wanting to complete the transaction during their due diligence. And with each new worry, I would explain to him how we were going to deal with each issue and how the process of closing the transaction would get better once more people within his organization knew he was selling the stores. He said all his employees loved him, and when he told them he was selling his stores and exiting the business, they all congratulated him and told him they were happy for him, and they did not quit their jobs. His controller did not quit and instead stayed with him to the end and helped provide the financial assistance Randy needed to complete the transaction. Nobody freaked out as Randy had worried about and things went according to plan because we have a process, which is one of the main reasons business owners hire an intermediary like me. If someone wants to exit their business, they will want to engage with a professional intermediary who is knowledgeable about their industry, has the ability to tap into a large pool of financially qualified buyers, and implement the process of working with a buyer and a seller in the proper order which leads to a successful closing for both parties. I am used to working with many different personalities, such as Randy, and keeping my focus on the goal of having a successful closing. Because if you have ever worked with me before, you would know I stay very focused when engaging with my client and a buyer because I know what I am there for, and that is to help both parties have a successful closing. This is why, in the case of Randy, I spent an unlimited amount of time making sure he knew what was going on and what the process was so he would not get blindsided by something
out of the blue. I know the client does not sell their business every day and, therefore, would not or could not know what to expect in the selling process. I am their eyes and ears and their guiding mentor when it comes to the selling process. I know I could not do what they do every day, which is operate a successful chain of convenience stores, which they are very good at, and they have not sold over 900 businesses as I have and know how to take the idea of exiting a business to a successful closing. As you can imagine, over a period of 6–9 months, which is generally how much time it takes after engaging with a buyer to get the transaction of selling a group of convenience stores sold, many different issues need to be dealt with and what could go wrong. I know this and can see if there is going to be an issue and will address these issues before they become something to worry about like Randy tried to worry about when it was nothing to worry about. In life, we take so many things for granted, like deciding we are going to get into our car and drive to another city far away, and we don’t think anything about it because we have done this hundreds of times before, and there is a process in every part of driving our car and getting to our destination. Many things could go wrong from the beginning of getting into our car to driving to our destination without an incident or having a wreck, but we don’t think about it because we have done it so many times. The same principle applies in my business, except in the case of selling your business, I will be driving the car, and you will be in the passenger’s seat. This is okay because I have done the process of selling a business hundreds of times, and I am going to get you to your destination of reaping the rewards of a successful business sale! –Terry Monroe
Every day, we are bombarded with so much information that it is hard to tell if whatever pops into our head is something we thought of ourselves or if it was something we read or came from social media. This was brought forth to me recently when I was talking with Randy, a client of mine whose stores I sold a couple of years ago. I had spent a lot of time with Randy during the process of selling his stores because Randy had told me in the beginning that he was a professional worrier. Of course, I had heard this kind of thing before, but Randy was not kidding. He really was a professional worrier. He told me he knew he was a worrier, and he was so good at it that he didn’t want to give it up, which is why I spent so much time with him. He would call me three times a week after we got his stores under contract, asking me if the transaction was really going to close. Every week, he would call, asking me the same question and expressing his concerns and worries about whether the transaction was going to close or not. It got so bad that I bought him Dale Carnegie’s book, “How to Beat the Worry Habit & Start Living,” which I read in the 1980s and helped me learn how never to worry again. It is a life-changing book if you have not read it. Randy got the book and read it twice, and he told me later it helped, but because he was so good at worrying, he did not want to give up worrying. He worried about his employees and what if they found out he was selling his stores, and they may quit. He worried about his controller quitting after How I Worked With the Best Worrier in the World
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Before I decided to devote full time to working with convenience store owners and dedicating my time to convenience store owners and their families, I was a general business broker selling what we call “Main Street” businesses. I would sell a limousine service, a restaurant, a retail store, and other general businesses because I had a background in owning and operating these kinds of businesses, so it was easy for me to relate to them. But since the early 2000s, I have been working exclusively with convenience store owners because I like the industry and the people I get to work with. 21-Year-Old Son Gives Advice to His Father About Selling the Family Business
interested in buying a magazine company. Now, the only thing I know about the magazine business is how to read a magazine, but ultimately, all businesses are the same. They have income and expenses, and they either create a profit or a loss. I told the caller I may know someone who would be interested in buying a magazine company, and I called them. They said yes, they were interested in buying a magazine company, and if it was the one they had been wanting to buy, they were really interested. After signing the confidentiality agreement, I shared with my friend the name of the magazine business I had to sell, and lo and behold, it was the one they wanted to buy. So, the game was on, and I was in the process of selling a very large magazine company. The negotiations between my buyer and the magazine company’s seller were going well. The price had been agreed upon, the due diligence had been completed, and we were down to the closing date. My buyer was anxious to close the transaction as soon as possible, and my seller wanted to hold off until the end of next month.
The seller was a great guy but was quirky about delaying the closing for no valid reason. He was telling his 21-year-old son one evening all about the transaction and was trying to justify his reason for delaying the closing to his son. His son happened to be watching TV while his dad was giving his dissertation about selling the family business and why he wanted the closing delayed when his son turned around to his dad and said, “Dad, just take the money!” This was all it took to get the dad back into reality, and within two weeks, the transaction was closed. The moral of the story is that sometimes we are too close to things to be able to see the big picture, and we make up false reasons to support our false ideas. If this should ever happen to you, remember what the 21-year- old son said to his dad: “Just take the money!” (Without naming the magazine company, there is a very good chance you may be reading one of their publications every month from the convenience store industry.)
–Terry Monroe
However, in 2022, a friend of mine called to ask me if I knew someone who would be
SUNDAY’S TRAGEDY = SELL THEM ALL*
*All of the stories I share in my articles are true stories. I change the names so as not to incriminate myself and my clients. Sigmund Freud had what he called the Pleasure Principle. According to him, the Pleasure Principle refers to the instinctual drive in humans to seek pleasure and avoid pain. Then there is the Reality Principle. The Pleasure Principle drives us to seek immediate gratification and avoid discomfort, while the Reality Principle compels us to consider the consequences of the real world regardless of whether it may be painful. These two principles determine the decisions we make on a daily basis and are the core reasons we do the things we do. Take my friend Rob. Rob owned five very profitable convenience stores and had operated them for just under 20 years. Next door to three of the stores, he had purchased the franchise to Little Caesar’s Pizza, which he operated in conjunction with his convenience stores.
customers and always worked hard to give them the best customer service he could.
who sells convenience stores? I am going to get rid of these stores and this Little Caesar’s Pizza that took me a year and a half to build and isn’t making any money. I wonder if I call him or send him an email on Sunday will he answer me? And you probably know the rest of the story. Yes, he did contact me, and yes, we did get together, and yes, I did sell his stores. When he told me this story lately, we both laughed for five minutes because he told me had been thinking about selling his stores for a while, but dumping the red pizza sauce on his new pants made him madder than the thousands of dollars he was losing every month on the Little Caesar’s Pizza store, which was enough for him to pull the trigger and exit the business. The story has a happy ending because Rob is now in a new business with minimal employees and will never have to worry about someone showing up for their shift. Sigmund Freud’s Pleasure Principle works in all of us every day. Hopefully, you don’t need to dump a container of sauce on yourself to decide what is best for you and your future.
Well, as things happen in the life of a convenience store operator, it was Sunday morning, and Rob got a call that his first shift person, who was supposed to open one of the Little Caesar’s Pizza stores, called, and they were not coming to work this Sunday morning. Rob was aggravated, of course, because he was dressed and ready to go to church, but somebody had to get to the store and get the dough ready to be able to be cooked for the lunch hour, and that somebody happened to be him. So, Rob rushes to the store, still dressed for church with his new pants he had bought on Saturday, knowing he had to get the pizza dough ready for lunch. Of course, while making the dough and moving the pans and condiments around, Rob dumps an entire container of red pizza sauce on his new pants, ruining them. Next comes a flurry of expletives … @#*^!*+#. He is unbelievably mad and upset. Then all of a sudden, he has an epiphany. He says to himself: What is the name of that guy who has been sending me newsletters and emails for years
Rob was a good operator because he was conscientious about taking care of his
–Terry Monroe
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TERRY’S QUOTES OF THE DAY “Anyone who stops learning is old, whether they are 20 or 80. Anyone who keeps learning stays young.” –Henry Ford “Life’s tragedy is that we get old too soon and wise too late.” –Benjamin Franklin “The best way to predict your future is to create it.” –Abraham Lincoln
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 How I Worked With the Best Worrier in the World Advice From a 21-Year- Old Son to His Father
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Sunday’s Tragedy = Sell Them All
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Terry’s New Book Is Here!
Do Elections Affect the Stock Market?
rises (bull), and the Dow’s second-half return in election years is an average of 8.6% as opposed to 3% in other years.
BULLS, BEARS, AND BALLOTS — OH, MY!
So, based on history, the stock market usually performs weaker at the beginning of an election year due to economic uncertainty surrounding the candidate’s policies. As the year goes on and the parties solidify their plans throughout their campaigns, that ambiguity wanes, and the market picks back up. LOOKING TO THE FUTURE Investors are always trying to hedge their bets and plan for long-term economic downturns, another pattern worth looking into. According to T. Rowe Price, a global investment management firm, there’s a 22% probability of an election happening during a recession. What’s interesting, however, are the numbers in the years that follow. There’s a 57% chance the following 365 days will have a recession, with the second and third years coming in at 30% and 17%, respectively. The big question remains: Will the winner of this year’s race create an unstable market? Rob Haworth, senior investment strategy director at U.S. Bank Wealth Management, says, “At the presidential level, the differences between the candidates, from an investor’s perspective, are not as significant as many would expect.” Change is constant in the markets, so don’t base your entire portfolio on this historical data. Trends like this are never guaranteed to repeat — they’re simply interesting patterns discerned in previous years. Instead, use this information to inspire your investments and empower yourself with clever strategies for cultivating long-term financial stability.
Decoding Election Year Stock Market Trends
Making money in the stock market can often evolve into a pattern recognition game, with investors searching for any repetition in past data. Many traders and analysts have noticed a particular market trend in election years — and some wonder what that means for 2024. Let’s look at the data gleaned from previous years and uncover how (if at all) it applies now. EMERGING PATTERNS A bull market is an economically stable time when prices are increasing. In contrast, a bear market is when stocks are losing value. Typically, stock market patterns in presidential election years show a weaker first half (bear), followed by a dip around May. After June, the index usually
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