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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
OCTOBER 2023
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Never Bring a Knife to a Gun Fight
Because It Is Not a Fair Fight
Sept. 28, 2022, will probably not mean anything to you, and it shouldn’t because it has gone and passed, as have many other days in our lives. But some days, like your birthday, a friend’s or loved one’s birthday, or an anniversary, you will probably remember. I am the same way. I can remember my birthday and everyone in my immediate family’s birthdays and a few other events, but that is about it. But Sept. 28, 2022, is a date that is going to be memorable to me for the rest of my life because that is the day Hurricane Ian was swirling around in the Gulf of Mexico off the coast of Southwest Florida and decided to stop and make a right-hand turn and run directly into my house, which is located on Ft. Myers Beach, Florida. At the time it happened, it was a big deal on the national news, and I am sure you have seen the photos of the damage that Hurricane Ian caused while tragically taking the lives of 149 people. A total of 97% of all structures on Ft. Myers Beach were damaged in the hurricane, and it has been found that Hurricane Ian ranks as the second-largest insured loss in world history, behind only Hurricane Katrina. I share all of this with you because most people think what I do for a living is sell convenience stores, which is somewhat correct, but that is not completely what I do. I believe I am in the information and problem-solving business as a professional intermediary. I am fortunate that I get to work in the convenience store industry and have a lot of knowledge about how to determine what the value of convenience stores should sell for, and I get to act as an intermediary between the owners of their convenience stores who have decided to step away from their business, thereby allowing me to find and negotiate with a
qualified buyer to purchase their stores. I have been acting as a professional intermediary for over 24 years since selling all of my businesses. I think I have gotten pretty good at what I do as a professional intermediary. HOWEVER, nothing prepared me for 11 months of negotiating with multiple issues involving the destruction and chaos of Hurricane Ian. First of all, I am one of the lucky ones who lives on Ft. Myers Beach because I still have a house. The majority of the homes on Ft. Myers Beach are either gone or uninhabitable, and there are over 3,000 homes, not including the condos on an island that is 7 miles long and approximately 2,000 feet wide with a little over 5,600 permanent residences. I no longer have any neighbors because either their houses are completely gone or uninhabitable.
What the water didn’t get, the 155-mph wind took care of by blowing water underneath the sliding glass doors, thereby soaking the floors of the home with water and the sheetrock on the walls and ceiling, which all had to be removed because of the mold that was created from not having any electricity to run the air conditioner. The damage was in the hundreds of thousands of dollars, and if you have had the opportunity to view the damage to Ft. Myers Beach on the internet, you will see it looks like a bomb went off because there are very few homes and only remnants of where homes used to be. Since I am a professional intermediary, I went to work on the rebuilding of my home, beginning with my search for a general contractor to work on the home and put it back together. At the same time, I would negotiate with the multitude of insurance adjusters. I can finally say as I am writing this article that, after 11 months, I have settled with my insurance carriers, and I got my butt kicked in the process. Yes, Mr. Professional Intermediary got his butt kicked because it wasn’t a fair fight. The insurance companies had me outnumbered. They know the insurance industry and how the game is played when dealing with a disaster like a hurricane better than I did. I was out of my element. Even though I negotiate for a living for my clients, I was outgunned and outnumbered. Because I was not knowledgeable about working with insurance carriers and disasters like a hurricane, it cost me a lot of money. I was not able to get enough insurance money to pay for all of the costs to cover the damage that was incurred to my home. In retrospect, I probably should have hired a professional intermediary whose expertise is to represent homeowners such as myself and Continued on Page 3 ...
As I mentioned, I am a professional intermediary, and having sold over 900
businesses to date, I thought I was pretty good, but I was unprepared to negotiate with general contractors, sub-contractors, city officials, insurance adjusters, insurance adjusters, insurance adjusters, and insurance adjusters. No, I didn’t stutter. There were at least that many and maybe more insurance adjusters who were overwhelmed because of the hurricane and uneducated about the situation and overall destruction Hurricane Ian created. Since I am a professional intermediary and negotiator, I felt I had the ability to deal with the disaster that lay before me, which was my home that was uninhabitable. It had sustained so much damage from the 14-foot surge of water that it destroyed the back walls of my home, washed away the garage doors and everything in the garage — including the cars inside the garage — and removed all the landscaping.
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... CONTINUED FROM PAGE 4 initial concept for Canva was too ambitious. Instead, they started smaller by creating Fusion Books, an online school yearbook design business. They made a website that allowed students to design their profile pages and articles, while Obrecht and Perkins printed and distributed the yearbooks to Australian schools. The couple secured an investor, and the Fusion Books application went live in 2008. Within five years, Fusion Books became Australia’s largest yearbook company.
company starting in Australia and decided against funding it. Tai wouldn’t give up on Perkins and Canva that easily, though. He encouraged her and Obrecht to take up kitesurfing and come to his unique retreat for investors and kitesurfing enthusiasts. At the retreat, Tai introduced the couple to their future tech advisor and co-founder of Google Maps, Lars Rasmussen. They also met an ex-Google employee named Cameron Adams, who would become a co-founder of Canva. With these new advisors, Canva secured $1.5 million from investors and another $1.5 million from the Australian government to keep the business in Australia. Today, Canva is used by 125 million people every month, bringing in over $1 billion annually in revenue. Perkins isn’t doing terribly, either. She’s worth over $6 billion and is still Canva’s CEO. Canva has continued to be at the frontline of graphic design programs, continually releasing new features and tools. With AI usage on the rise, they’re developing new ways to utilize it in Canva. Perkins’ journey proves that if you have a good idea, you should stick with it until it sells.
In 2010, Perkins received her big break when Silicon Valley investor Bill Tai visited Perth. Perkins, Obrecht, and Tai met briefly for dinner, and Tai invited Perkins to San Francisco to pitch her ideas. When Perkins met with Tai in California, she thought she blew the pitch. “I thought that he didn’t really like what I had to say,” she recalled. “He was on his phone, and I thought that meant he wasn’t really engaged in what I had to say about the future of publishing.” Tai was actually connecting Perkins with other investors and tech entrepreneurs.
Unfortunately, Perkins’ pitches to Silicon Valley investors and executives proved fruitless. Many were concerned about a tech
WHAT KIND OF BUYER ARE YOU?
Several years ago, a friend of mine happened to own a boutique hotel in the Caribbean on the island of St. Croix, an island that’s part of the U.S. Virgin Islands. One day, he mentioned to me he had decided to sell it to spend more time with his family. Immediately, I began to review his books and records and noticed that he was doing very good business by the fact he was running a 90% occupancy rate. He had been having profitable years for quite some time. So, I began to work on selling his hotel. I can’t tell you how many people I had look at his hotel until finally, I found a businessman and his son from Ohio who went and visited the hotel, met with the owner, and had even gotten his accountant involved in the purchase of the business. But just when I was about to write the purchase agreement, the deal came to a screeching halt. The buyer said that he could not buy the business. I asked him why. Was it because of the asking price? Was there something wrong with the cash flow or the numbers of the business that did not look in order? No, it was none of those items at all. The numbers were great, and the assets of the hotel were in excellent condition. The answer to why he could not buy the business still rings through my ears today as clear as
if it was yesterday. He said he could not buy this gentleman’s hotel because he is doing such a good job of operating it that there is no more upside left for him. He said he could not begin to operate it any better than the present owner because he has done everything right in operating the business and continues to do so even during the hard times.
Then, there are the visionary buyers who are looking for and are able to find a business that is not performing to its maximum profitability, may have been poorly run in the past, and is in need of some fixing up both in the property and the personnel side too. These buyers like finding projects because they know they have the greatest upside to them in profitability. These businesses have only one way to go, and that is up. And generally, they like to fix up the businesses and keep them. All three of the buyers mentioned will make money and be profitable. But the one with the most upside is the buyer who finds a project and rebuilds the business into something beyond its present state. And which one of the buyers has to do the most work? The one who takes on the project! The moral of the story is that there is no free lunch. You get what you pay for in money and hard work, which will determine how much profitability you and your team want to invest. Next time you are looking to acquire a business, ask yourself: Which buyer am I — No. 1, 2, or 3? –Terry Monroe
This led me to determine there are three kinds of buyers when it comes to buying businesses.
There are the buyers who are buying knowing they plan to sell the business right after they purchase the business, which, in this case, they have to buy at a wholesale price so they can sell at a retail price and make a profit. We call these buyers “Flippers” because they like to find deals and flip them to another buyer as soon as possible. Then, there are the buyers who are buying to hold and keep and are not looking for a project; instead, they are looking for a solid- performing asset that they are going to keep for many years. These buyers are looking for solid businesses that have a long track record of profitability. The buyer will want to add their personal touch to the business, but the business does not need any major changes to it.
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
ATTENTION CONVENIENCE STORE OWNERS! If you are an owner of a convenience store or chain of convenience stores, American Business Brokers & Advisors has a 90% success rate in the selling of the businesses they engage with. Even in today’s marketplace with higher interest rates and the possibility of a recession, convenience stores are still selling for top dollar. If you have been thinking about the possibility of stepping away from your business, now is the time to contact us so that you can get the information you need to make the decision whether you want to sell at the top while the market is paying top dollar. American Business Brokers & Advisors is projected to complete $1 billion of businesses sold by 2024. Contact Terry@TerryMonroe.com to learn more information about how you can get Top Dollar for your convenience stores.
(All inquiries are held in strict confidence.)
TERRY’S QUOTE OF THE DAY “The easiest way to teach children the value of money is to borrow some money from them.” –Anonymous “You may be a redneck if you … have spent more on your pickup truck than your education.” –Jeff Foxworthy
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negotiate with insurance companies, but I didn’t, and it cost me a lot of money and grief. It distracted me from my job of helping my convenience store clients who depend on my expertise in negotiating for them in helping them step away from their business. There is a moral to this story, and it is that as good as I may believe I am at being a professional intermediary, I need to stay in the field I am knowledgeable about and not try to work in a field I do not know anything about. This is the same advice I have been giving for years to business owners who think because they have sold a vehicle or a piece of real estate or maybe a business in their past, they can sell their own business. Yes, they may get the job done of representing themselves, but I am pretty sure it will cost them more money, as it did me. It will be a distraction and not an enjoyable event in their life, as I have just experienced with Hurricane Ian, and instead, they should continue to do what they do best, which is run their business and let the experts in their field do what they do best. –Terry Monroe
CANDY COSTUME GOURDS HALLOWEEN
HAUNTED MOON RAVEN TRICKS
VAMPIRE WEREWOLF WITCH ZOMBIE
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 Never Bring a Knife to a Gun Fight
Sudoku Solution
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What Kind of Buyer Are You?
Thinking of Selling Your Store?
The Start of a Global Graphic Design Empire
HOW MELANIE PERKINS FOUNDED A GLOBAL UNICORN
According to the Small Business Administration, nearly 627,000 businesses open each year, but at the same time, around 595,000 businesses close for good annually. Further, U.S. Bureau of Labor Statistics
research states that 45% of new companies go out of business within their first five years. It’s no surprise that building a successful business is easier said than done, but once in a blue moon, an entrepreneur breaks the
the other side of the Pacific Ocean. Born in 1987 in Perth, Australia, Perkins first tasted entrepreneurship as a teenager. She designed and sold scarves to shops and markets across her hometown at 14. A few years later, she enrolled at the University of Western Australia, where the idea for Canva was born. Needing extra cash, Perkins worked as a tutor, teaching fellow students how to use graphic design programs. It often took months for them to learn the basics; not only were the programs difficult to use, but they were also expensive! She wondered if there was a way to create a graphic design program that was simple, affordable, and easily accessible online.
mold to reach new heights. We saw it with Jeff Bezos and Amazon, Bill Gates and Microsoft, and now, we’re watching it happen with Melanie Perkins and Canva, an online graphic design tool. While most tech startups originate in Silicon Valley, Canva’s inception took place on
Perkins took her idea to her boyfriend, Cliff Obrecht, and the two determined that the
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