7 SIMPLE SELLING TRICKS THAT MAKE MONEY NOW!

Posted on 25. Dec, 2009 by in Advice, Business

  1. Know who your customer is and sell to that customer. I.e. Are they in their 30’s or 40′s or 50′s or are they Hispanic? Do the market research as to what the demographics of your area are and then buy merchandise and services that cater to that group or customer. If you don’t know what the demographics of your area is you can go to www.census.gov or for a more detailed breakdown of what is selling in other stores you can go to www.gasstations.com/products.asp and you will find a complete selection of reports that will help you in your business.
  2. Are you using a shotgun or a rifle?  Is your advertising and marketing the shot gun approach when you should be using the rifle approach? All too often we let marketing and advertising take a back seat to the daily operations of our business. Sometimes it is because we don’t either like or know anything about the marketing aspect of the business so we treat it accordingly. What is worse yet is when we think we know something about marketing and advertising and act like we do. For example I can remember when I was in the television and radio business that my customers would buy advertising that they liked. If they liked country music then they would buy ads on country music stations. If they liked the shows our TV station was running at a certain time they would buy their advertising to reflect their tastes in the programming. This not the correct way to buy advertising or marketing. You want to make sure that you are buying what You CUSTOMERS like and not what you like. So read number 1. Of this report and then use the rifle approach and implement the marketing and advertising that is reflective of your customer’s tastes and wants.
  3. Can’t sell from an empty cart. Where’s the inventory. Our company just sold a liquor store in a small town and for American Business Brokers to sell a liquor store is not anything unusual we do it quite often. But what caught my attention in this sale is that the sales of the stores was about $1,800,000.00 per year in a town of 6,500 population and the owner of the store was an absentee owner who lived in another state and he had only owned the store for 3 years and when he bought the store it was only doing around $1,000,000.00 in sales. He had increased the sales by over 40% and he didn’t work in the store. So how did he do it? He said that he increased the inventory. Now, I am sure that there are other things that this person had done to increase sale, but his main reply had always been that he increased the inventory so his customers always saw a full and well stocked store. Make sure that your shelves are well stocked and faced forward. If you have to much empty floor space. Consolidate it to make it look fuller. More inventory means more sales. Don’t let your store look like it is going out of business when you are trying to increase your business.
  4. Are you giving them a reason to come back or spend more money with you? Whether it is retail or online give them a reason to spend more money with you. The easiest person to sell is someone who has already done business with you. Either give them a bounce back coupon or offer additional items you have for sale as you are closing the sale. Stick a flyer in their sack or email it to them, but let them know there are other items you have for sale and you are willing to even give them a discount if they will continue to purchase from you. Remember they have money and they want to buy from you or chances are they wouldn’t have bought from you the first time so don’t deny them the opportunity to continue to buy from you again and again and again.
  5. Raise your prices. Yes, raise your prices on items that are non essentials or un- priced. When was the last time you did a market survey of your competition and what they were charging for sodas or candy bars or health and beauty aids?  Chances are you maybe under priced in the market place. What if you are little bit to high now compared to the market place. Well don’t drop your prices remember it is called a convenience store for. Reason not Wal mart.
  6. Be sure to educate your customers every chance e you get. By this we mean with price signs on the MPDs, on the soda milk candy bars everything to show them what is for sale. If a bunch of inventory is just sitting there it needs help. Promote it with visual aids. Don’t assume that your customers will see the items and the want to pick it up. Give them a reason to take action. Use vendors point of sale materials, have a sign maker make some up, use neon paper, even colored pens on the windows. It really doesn’t matter what you do just give the products a push
  7. Give stuff away. Always have a drawing going on for something all of the time for anything. It can be an Elvira stand up that was used for selling beer or a basket of salty snacks or a soda & hot dog a day for a week. Get your vendors involved and get stuff to give away. And by the way you may want to keep the entry forms with their email address just in case you decide to start a marketing campaign.

 Bonus:

             Ask, ask and ask them again to buy something when they are at the counter checking out. Even the  slightest bit of suggestive selling will drive profits. And believe it or not customers appreciate it. They    like to know if there any specials or good deals they can take advantage of.

Buying a Business? Get the Best or a Fixer Upper?

Posted on 12. Dec, 2009 by in Advice, Business

Buying a Business? The Best or a Fixer Upper?

My occupation centers around helping business owners analyze their assets and coaching them on decisions as to whether or not they should sell all or part of their businesses.  As such, I am privy to a wide variety of business information and I can tell you first hand, I tend to see a lot of bad operations.  Additionally, based on my experience of having owned and operated several businesses myself, I also coach buyers on what to look for in a business and how the process of buying a business works.  So it is not uncommon for me to skew to the negative side of things and to look for warning signs that could potentially hurt either party in a business resale transaction.   I don’t enjoy searching for the negative aspects of business, but I know them and I work hard to seek out, identify, and mitigate the impact that these risk factors may have on either party.

However, I don’t always find things that are bad.  And during this time, with all the doom and gloom of our present economy, I thought I would share a story with you about an operator that stood above the crowd and ran an excellent business.

Several years ago, before I began to specialize in the sales and acquisition of convenience stores, I worked as a transactional broker in multiple industries.  One of which was the hotel and motel industry.  At the time a friend of mine happened to own a boutique hotel in the Caribbean on the island of St. Croix, U.S. Virgin Islands.  One day he mentioned to me that he was tired and since he had owned the hotel for several years he had decided to sell it so he could spend more time with his family.  I agreed to help him and began to review his books and records.   Upon initiating my review, one of the first things I noticed was that he was doing a good business…a very good business.  By that I mean he was running a 90% occupancy rate and had been for several years.

It wasn’t like he’d just had a good year or two; he had been having very profitable years for quite some time.  When I asked him how he had managed to get the occupancy rate to 90% and keep it there, he said that over the years, during the slow seasons, he would make several small changes to the property to maintain a fresh business.  Every six months or so, he made sure to do something different to his hotel.  It could be a new painting on the wall in the lobby or new trash containers or new towels, etc.  But he would always make some change or add something new for his customers to see.

When I asked him why he did that, his reply was, “My customers expect to see something new all of the time.”  He explained, “You see, even though a lot of my customers may be transient, many of them are not, because I work to keep them coming back to me every year.  They enjoy their experience at the hotel and they want to see something different, even if it is a little thing.”  He also mentioned to me that when occupancy would begin to drop-off he would personally go into the town and offer air conditioned rooms to the locals for a reduced price to help fill his rooms and continue to generate cash flow.

Wow, I thought.  What a novel idea.  He went and asked for someone’s business.

So I began to work at selling his hotel. I can’t tell you how many interested people I had look at his hotel.  Finally I found a businessman and his son from Ohio who had seen the property, met with the owner and had even gotten the accountant involved in the sale 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, “I cannot buy this gentleman’s hotel, because he is doing such a good job of operating it that there is no more upside left for me.”  He said, “I cannot 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.”

Astounding as it may sound, this hotel was the proverbial case of a car with eight cylinders running on all eight cylinders and doing so well that there was no more upside left in the business.   The business was doing too good to be considered salable.

It wasn’t until some years later that I encountered this same issue again.  I was contacted by a gentleman who owned about 12 convenience stores and had decided that he wanted to sell about half of them to reduce his work load.  Here again when I inspected the quality of the physical assets of the stores and reviewed his books and records I discovered that I had encountered another “eight cylinder car running on all eight cylinders”.

The man and his team were great operators.  Whenever something broke in the store or something needed replaced or maintenance on the outside, they fixed it.  I could not find a blemish anywhere and most of the stores were over 5 years old. His merchandising and floor plan was laid out well and the store traffic flowed.  Every time I visited a store they had merchandising specials throughout the store from different vendors.  All of his stores were very profitable and operating well.  I remembered the hotel in St. Croix and prepared myself for some tough sales.  But I was wrong.  I ended up selling all the stores he asked me to sell.

I know that the people who bought those stores were happy knowing they were buying excellent running assets.  And they were especially happy with the fact that all they had to do to maintain the stores success was to continue with the process of running the stores the same way that the previous owner had.

So what is the moral of this story?  When buying a business you always have a choice. You can buy a business that is an excellent running business and all you have to do is show up and do the same things that the last owner was doing. This would be like buying an eight cylinder car that is running on all eight cylinders.

Or you can buy a business that needs some attention and some tender loving care and has more upside, but will also take more work to get the business tuned up and running well. This would be the eight cylinder car that is only running of six cylinders and needs work. In other words it is a fixer upper.

Either way you go you will always generally be farther ahead than trying to start a business from scratch and doing it the hard way.  So go for it. Find the business that suits your taste and then decide if you are buying a fixer upper or one that needs only you and your time and begin to enjoy the journey.

Your Business Has Outgrown You

Posted on 25. Nov, 2009 by in Advice

(This is part 7 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

The business has outgrown you. OK, this is a very humbling situation and most people tend to completely miss this situation, but I see it happen all of the time. An individual creates and starts a business and they are good at what they do. They find themselves in an industry that is taking off and they begin to do very well and they continue to do well over the years and before they realize it the business has outgrown them.

They still know how to operate the business and they are still good at selling, but they only have the ability and education to operate the business at a level that equal to their talents and abilities. Therefore they end up stymieing the true growth of the business. But that isn’t the worst part. The worst part is that the business has gotten more complex than when they started it and they need more sophisticated financial people and financial systems, but they don’t know where to find them or who to turn to for help. At this point the business begins the process of self imploding, because all of their team is generally working with limited capabilities just like themselves.

Their accountants are ones that they have had for years and they are going to continue to do the same things and they can’t help the individual grow, because they have the same problems he does. The same is true for all of the rest of the employees and advisers. So the business begins a slow death if the business isn’t sold or merged with a more sophisticated business to help take this business to the next level.

Beware, this one will sneak up on a business owner and unless the business owner has a strong self esteem they will not recognize it and their ego will keep them in denial and the business will be on the downhill slide. Be sure to be able to stand back and talk to one self and hopefully have someone who can help you recognize that it may be time to sell or merge this business.

If you find yourself in over your head, it might be time to sell your business.

Partnership Dissolution

Posted on 24. Nov, 2009 by in Advice

(This is part 6 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

Partners & Parties. Partners and parties are much alike in the world of business. A lot of times when you first got into business you needed a partner or a group of partners to get things started. This is very normal and a very prudent thing to do, because you get to syndicate the risk and it helps to excel the business with more talent and more money to help the business in its most crucial stages of the startup phase. At a party, there comes a time when the guests need to leave. The same is true in businesses with partners. At some point, a partner who helped bring you to the party needs to pick up their hat and coat, and leave the party. This is when things can get very interesting.

All too often when partners start a business they are friends or acquaintances (in the worst situations they are relatives) and things are great and everyone is having a love fest. But then, over time the reality sets in that this is a real business and everyone has to contribute something to the business. Just like everyone is supposed to contribute something to the party. Of course not all of the partners are going to see the same things or have the same views on all of the aspects of the business. This is normal, because we are all wired differently and we all have different agendas. But what happens when it is time to break up the party?

If there is not a buy-sell agreement in place (which would address this exact situation) and generally there isn’t such an agreement in place, then the party could get ugly. And it could very easily be the demise of the business if it is not addressed properly and quickly.

Don’t be the one who gets left out of the party or worse yet gets asked to leave the party empty handed and emotionally drained. Be proactive and accept the fact that the party was fun, you learned a lot and either take your toys and go home or be willing to give the partners some of the toys and send them on their way home. But be prepared, because eventually the party will be over.

Significant Life Impacting Events

Posted on 23. Nov, 2009 by in Advice

(This is part 5 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

Significant Life Impacting Events! Nobody likes to talk about significant life impacting events, but they do occur and they occur to all of us. What is a significant life impacting event you may ask? It could be a number of things. It could be a divorce, a death in the family, sickness of yourself or a loved one, it could be the dissolving of a partnership, the death of a pet, excessive business or personal debt, or perhaps the relocation of a loved one. There many different types of the situations we would call significant life impacting events. But sometimes these events that occur in our lives may be telling us it is time to move on and close the chapter on the present part of our lives and to do something different.

A recent psychological study was done with individuals who were in negative situations with a lot of negative components affecting their lives (i.e. gangs, domestic violence etc.). When these individuals were removed from their negative environment and placed into a more positive environment the change in behavior and results of these individuals was dramatic. It was proven that by removing someone from the influence of the negative environment they could be reshaped into a positive individual where they were able to use their talents and lead productive lives. But here was the flip side of the equation. They also learned that if that same individual that was taken from the negative situation and placed into the positive situation should ever return to the negative situation for a period of 14 days or more, the individual would return to the negative situation of their environment and all of the improvements that had been made in that person’s life would be lost and they would be back to square one.

So when a significant life impacting situation occurs, stand back and look at the situation with an unbiased view and see if it is telling you it may be time to move onto to another business.

Your Industry is Changing

Posted on 22. Nov, 2009 by in Advice

(This is part 4 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

The industry you are in is changing…and not for the better. I am a true believer in the law of change. What the law of change says is that, “Nothing ever stays the same. Things are either going forward or going backwards, they are either growing or dying”. That is the law of change.

Neither you nor I can stop the law of change. All industries change just like people do. But one thing you will notice is that as an industry begins to mature, meaning more players enter that industry, the profitability and future of the industry begins to change.

For example, would you want to own a video store in today’s market? You would probably say, “Heck no. They are a dying business.” And you would be correct. However, I was in the video rental business before Blockbuster, Netflix, Redbox and all of the other sources of entertainment rental that is available to us today. When I began in the business it was very profitable. But then it began to change. First with the opening of Blockbuster Video stores, then Hollywood Video and then, well you get the picture. The point is that the industry changed until the profitability of my business was minimal or almost non-existent.

The key to this “Change Factor” is not to stay in your particular industry too long. Don’t ride a business into the ground. Recognize the changes that are going on in your business and be sure to get out before you have to be closed or forced out.

You Have Outgrown Your Business

Posted on 21. Nov, 2009 by in Advice

(This is part 3 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

You have outgrown your business. Most people get into business intentionally. But some get into business by accident. Some people are very good at running a business and they may discover after some time that while the business is satisfying them personally, the business is not sustaining them financially. They are ready to move onto to bigger and better things.

People in this situation know most the basics of running a small business and they should step up to a larger business; one that can produce more income and utilize their talents more effectively. In this case it is often better to sell the business they presently have and move onto the next level rather than to just acquire more stores. This much like a person changing a job because they have maxed out their present position and want a more challenging and financially rewarding job. They decide to move to the next level.

If you have outgrown your business, it might be time to sell.

You Keep Tinkering

Posted on 20. Nov, 2009 by in Advice

(This is part 2 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

You can’t quit fidgeting with the business. By this I mean that you may be intentionally implementing programs or projects for the business that are not tied to its core products or services. If you are doing these things just have something to do, you are tinkering…and it might be time to sell your business.

This is like having Attention Deficit Disorder with a business. You may find yourself spending time and money on things that do not relate to the business or the profitability of the business. In this situation it is best to recognize your tinkering as soon as possible and ask your self why am I doing this. If the feeling keeps appearing to whimsically test ideas on your business, focus your time and talents toward other projects (i.e. involvement with local fundraisers or projects for your community) that will welcome and appreciate your talents and energy, but don’t mess up the business or its profitability.

If you keep feeling the need to tinker with a profitable business just because you need/want something to do, it may be time to sell the business and focus your energy somewhere else.

The Thrill-is-Gone Syndrome

Posted on 19. Nov, 2009 by in Advice

(This is part 1 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)

The thrill-is-gone syndrome. Also known as burnout or the dread factor, this is when you just don’t feel like continuing on anymore. You are probably still very capable of running your business, but even the days that are very profitable don’t get you excited or give you a burst of happy emotions.

On the flip side when negative things occur, such as the breakage of items in your business or receiving a notification of an audit, this makes you irrational and upset instead of understanding that things like this are just part of the running a business.

Burnout is very common, but you have to be able to recognize it. The old saying that, “You should make your vocation your vacation” is very true. When you do this you will never have to go to “work”. If you are feeling burned out from your business, take off for a week or two. Get away from it and see if your batteries are recharged when you get back to the business. If you come back recharged and ready to tackle the problems instead of avoid them, then you will probably be OK.

But if you are still in the burnout mode upon your return, it may be time to consider entering checkout mode. If you experience prolonged bouts of burnout or the thrill-is-gone syndrome, it might be time to sell your business.

Pay Me Now or Pay Me Later

Posted on 12. Oct, 2009 by in Advice, Published Articles

“Make necessary capital improvements now and get paid later with a better return on investment”

When the time comes to make capital improvements, more convenience store operators are making the smart decision to remodel now, rather than wait to take care of the maintenance when it’s too late. Recent trends indicate this shift is a positive direction for owners who understand the importance of operational maintenance. In addition, industry figures show the gap between remodeling years is narrowing (9.8 years), while the percentage of stores that have been remodeled in the last five years is growing (33-plus percent), according to NACS.

When defining capital improvements, or operational maintenance, we’re really defining curb appeal. When assessing the quality of a store’s assets, c-store owners must determine if there needs to be maintenance done for issues including cracks in the parking lot; peeling or faded paint on the exterior; plumbing leaks or clogs; interior design; and any other issue related to the overall look and functionality of the store.

I often suggest to my clients that it’s better to take care of operational maintenance immediately when there’s an opportunity to earn a return on investment. The “pay me now or pay me later” theory suggests that store owners who put off making capital improvements are those who want to be “paid now.” The best scenario, however, is getting “paid later;” because that involves a return on investment, which usually yields financial gains. For example, during a sale process, a buyer will assess the assets of the store or stores for sale. If one is in need of capital improvements and maintenance, the buyer will deduct the cost of the improvements from his or her offer. In those cases, if the store owner paid for the maintenance when it was needed, he would have reaped the benefits – which many times include an increased store value – from the improvements. Unfortunately, however; not making the improvements when needed will lead to the store owner ultimately losing money at the time of the sale.

While making capital improvements is most often associated with preparing to sell a store, it’s also vitally important to the overall business function. Store owners that suffer from declining assets are often those who operate highly successful businesses. In actuality, the stores that are most successful are the ones that suffer the most wear-and-tear. The highs that come from consistent consumer traffic usually bring the lows caused by the overuse of gas pumps, restrooms, soda fountains and coolers. A new store becomes a well-worn store in a matter of years. The key is keeping the well-worn store from becoming worn-out.

Store owners should always keep in mind the idea of maintaining a positive public image. Think of the image a business is sending to its customers when the parking lot is full of potholes, the restroom is closed because of plumbing problems or a pump is bagged because it’s out of order. It is no coincidence stores that maintain their curb appeal also maintain a healthy business. Just like customers are drawn to new stores because of the cleanliness, shine and polish, they’re also drawn to old stores that are constantly maintaining the look and feel of a new one.

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