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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
NOVEMBER 2022
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Employees Can’t Serve 2 Masters
Remember This When Selling Your Business
However, even with all the planning and processes in place, you can’t change human nature. By this, I am talking about what happens when you do tell employees about the sale of the business and how they respond. Case in point: I had six excellent convenience stores for sale scheduled to close at the end of August, with a timeline to inform the managers and employees
notice their sense of loyalty and duty shift to the new owner.
He was in denial and said that wouldn’t happen because he was close with some of his managers, having worked together for more than 10 years. I said I understand, but I know what I am talking about, and you need to be prepared. Well, you guessed it. Old Terry was right. My seller had to admit that a few days after he told employees about the stores’ upcoming sale, none of them ran for the hills because of the procedures in place. But subtly, their demeanor and attitudes toward the soon-to-be past owner shifted toward the new owner. My seller was a little hurt at first but then told me, “OK, I get it. They are trying to impress the new owner who is going to be giving them their paycheck going forward and not me.” Human nature is a hard thing to change even in business. The moral of the story is you can only serve one master, and when it comes to selling one’s business, be prepared for this issue to arise and don’t let your ego get bruised, because it is part of the process. Our goal is to have a smooth transition from the seller to the buyer and get the deal closed. Your ego will heal right after the money gets wired into your account. –Terry Monroe
Let me set the stage for you. If you are a business owner and you have decided to sell your business, one of the biggest fears is that during the process of selling, your employees find out about it, get nervous and scared, and quit, leaving you not only empty-handed to run the business but also a business with no employees — and possibly losing the sale of the business. Any one of these issues could be the kiss of death. Knowing this fact and having sold over 859 businesses, I have a process that emphasizes confidentiality when selling the business and sharing with the employees only when the time is right and in a manner that allows things to go smoothly for both the business owner and the employees. And I can proudly say I have never encountered a situation where the managers or key employees fly the coop before the closing, because of the process and procedures that can be implemented.
during the first week of August. This is common practice, because if the employees had not been told at this time, there was a very good chance they would have found out about the sale from reading the paper or from a friend because the new owner applied for liquor licenses. And the last thing we want is for anyone to get blindsided in the selling process. The owner and I talked extensively about when and how the employees were going to be told about the sale, and as an owner of convenience stores in a tight labor market, he was worried about employees quitting. Because of the procedures we had implemented, I knew this would not happen, and it didn’t. However, I did warn him that once he told the employees, they would begin to treat him differently even though he had a long relationship with them. I shared with him that from the time he tells the employees, he will
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Thinking About Downsizing?
3 QUESTIONS TO CONSIDER
Whether you’ve become an empty nester or are about to retire, you may decide to downsize your home. But before doing this, there are many factors you must consider. Here are three questions you should ask yourself before downsizing. 1. HOW DO YOU WANT TO LIVE? To find out where you want to live, you must first ask yourself what you want to do. A great place to start is by determining what you want to do with your free time. Do you want to spend time in nature, go on frequent getaways, or be involved in your community? Once you know how you want to spend your time, you can begin looking for places that best suit your needs. 2. WHAT WILL BE THE FINANCIAL BENEFITS OF DOWNSIZING? Before purchasing a new home, you want to see if there are benefits to moving and downsizing. Depending on what the market looks like, the worth of your home and land, and where you choose to move next, you can take the money you earn from your current home and use it for something else. For example, it can be used as a down payment for your new home, get stashed in a savings or retirement account, or go toward your dream vacation. 3. WHAT WILL YOU DO WITH ALL OF YOUR STUFF? Depending on where you decide to move — a condo, apartment, or a smaller house — you will likely need to part ways with some things. You want to consider how much space you’ll have in your new home
and what items will follow you on your next journey. Getting rid of some of your belongings can be difficult, so ensure that you’re prepared to leave some things behind. Consider donating some of your items to shelters and centers. Although your items may not be used by you, they can go to someone in need. The most important question you can ask yourself is if you’re truly ready to downsize. The questions here will help you determine if downsizing is the right choice for you during this time. But don’t feel rushed to decide if you need to make life changes now. Take your time with this decision — you have more free time now than ever.
WHICH PURCHASE OFFERS THE BIGGEST UPSIDE? BAD STORES VS. GOOD STORES
Picture this. I have 12 run-down, non-EMV compliant stores, old MPDs, and lots of deferred maintenance (I am talking about roofs with leaks, cabinets that are broken and chipped, cooler doors that don’t shut properly, doors that are boarded up and of course dirty), and half of the stores are not profitable. Then I have six stores that are in great shape. Parking lots are well maintained, nothing needs to be replaced or fixed inside the stores, all EMV-compliant with up-to-date MPDs, and each one of the stores is very profitable.
The six stores have been money makers for years and will continue to make money for years as long as the new owner can maintain the quality and is not impacted by new competition. Their vision is to continue to operate the stores as they are and increase sales and profitability with the addition of new products and an increase in margins. The 12 run-down stores will need several million dollars spent on them to get them to a point where they are competitive in the marketplace. The buyer of the 12 stores
already factored in the additional investment of several million dollars, and this amount was deducted from the purchase price. The new owner’s vision for increasing the profitability of the stores is to give them facelifts, new MPDs, a rebrand, increased inventory, and clean up, then add and retrain employees, thereby creating a new image.
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
Get the Wisdom of Other Business Owners’ Mistakes FROM TERRY MONROE’S ‘HIDDEN WEALTH’
Are you planning on selling your business in the next 1–2 years? If so, you need to start planning now. But where do you even start? Selling a business is a massive undertaking. With so many things to consider, some confusion is understandable, but if you don’t get the right kind of help, you could end up selling your business for far less than top dollar and leave tens of thousands of dollars on the negotiating table. These are the kinds of cautionary tales that market maker and four-time author Terry Monroe shares in “Hidden Wealth: The Secret to Getting Top Dollar for Your Business.” While we’d like to hope we’re accomplished
and savvy enough to sell our business without any help, the uncomfortable truth is that tons of successful business owners have lost out on millions of dollars in selling their businesses — all because they didn’t know exactly what they were doing. Sometimes, contemplating the financial implications of selling your business and dealing with the strain and grief that comes with doing so are worse than actually selling the business. So, what then? Well, in Terry Monroe’s “Hidden Wealth,” you’ll also learn how to realistically assess your situation, deal wisely with the business you’ve built over the years, and maximize the money you’ll receive when you decide to sell. It has been said that we learn from our failures, not our successes, but the true sign of a successful individual is to learn from someone else’s failures and not your own. “Hidden Wealth” seeks to do just that — give every business owner access to the lessons learned from the mistakes of other business owners so they can avoid the setbacks and reap all the rewards. Find out how you can get a copy today by emailing Terry@terrymonroe.com .
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Keep in mind that both groups of stores have good real estate locations. Knowing the facts about both groups of stores, which would you want to own?
The answer is the ones that will make you the most money. The six-store chain will always make money but have the issue of competition. However, the 12-store chain has nowhere to go but up. The upside for the 12-store chain is almost unlimited because they started so low. As long as the new owner of the 12-store chain is committed to the convenience store business in the long term and is not a flipper, chances are those stores will give the new owner the most return on their investment. The moral of the story is that opportunity is everywhere. Sometimes you may have to put in some extra work, but the opportunity is there. We should always be looking for the upside, because the upside is where we make the most money. Don’t be turned off because an opportunity may need additional work — those stores that need some extra loving tender care and a facelift may be the jewel in disguise. –Terry Monroe
CASSEROLE ELECTION GRATITUDE HARVEST
RAKING REMEMBRANCE SAINTS SQUASH
THANKSGIVING TOPAZ TURKEY VETERAN
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 Employees Can’t Serve 2 Masters
Sudoku Solution
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Are You Ready to Downsize?
Bad Stores vs. Good Stores
Get the Wisdom of Other Business Owners’ Mistakes
3 Ways To Improve Your Work-Life Balance
With These 3 Tips ADD MORE LIFE TO YOUR WORK-LIFE BALANCE
into work at home when they’re supposed to be spending time with their family or doing hobbies they enjoy. In fact, when remote workers don’t unplug from their work, they are much more likely to burn out. If you or your employees are currently working remotely, it’s important to establish a proper work-life balance. Here are three ways to include more personal time in your daily routine. SET BOUNDARIES. After you clock out for the day, it can be easy to get dragged back in if you get a text or email relating to your job. That’s why it’s important to set boundaries for yourself. Once you reach a certain time in the day, turn off your work phone or email. Set an alarm for yourself for a time when your work day comes to a close — and put everything away so you can focus on your home life.
ESTABLISH A WORKSPACE. Our environment can play a large role in how we feel each day. If you haven’t established a workspace in your home, you might struggle to separate work from home life. Think about it; if you work from your living room, you will probably find it more difficult to relax there later in the evening. You don’t have to turn an entire room into an office, but dedicating a corner as your workspace will come with benefits. WEAR WORK ATTIRE. What we wear has an effect on how we feel. If you’re wearing sweatpants while you work, it can be difficult to unwind when you’re off the clock and wearing the same clothes. Switch it up and wear professional attire while you’re working. When the workday comes to a close, you can shed your work clothes for something comfier, which will help you relax and focus on what’s going on at home.
One of the biggest concerns employers have with remote work revolves around employees finding distractions at home that will take their attention away from job duties. While this is certainly true for some remote workers, it doesn’t apply to everyone. Certain individuals will even be drawn back
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