It is that time of year again for me to visit the doctor for my annual checkup. Annual checkups are something we all do (or should do) to see what kind of shape we are in and to see if anything has changed from last year. You know what I am talking about: Do you have any new pains? Has anything fallen off your body recently other than your hair? Are there any new lumps or bumps that were not there last year? As many of you know, when you get older you end up visiting the doctor more and more to get a checkup and to have them give you an assessment of where your health stands in regards to your age.
It is a known fact that as one gets older there is a good possibility that certain conditions could arise and it pays to be proactive and to address any such issue before it gets out of hand. Now I did not say that I enjoyed going to the doctor and having them stick needles in me and poke other things in me that I may find repulsive, but it is a necessary evil that needs to be done and quite frankly, when it is all done and over with, it is always good to know that there is nothing wrong with me and I have a peace of mind that will hold me over for at least another year.
Did you know that many people do not visit a doctor for an annual checkup? It is surprising to me how reluctant we are to have an annual checkup when we know it is vitally important to our health and our loved ones. It is always much easier to tell someone else how they should be getting checked out or how they should treat something than it is for us to actually take care of ourselves.
This same procrastination applies when it comes to our business, which generally is the main source of our financial livelihood. Like our health, we tend to ignore our business until something goes wrong or something is broken. Then we hurry around and try to fix it. Putting us into a reactionary mode. Although some may say they work better under pressure, statistics have shown that most businesses are more profitable and enjoy more sustained growth when they adhere to planning, goal setting and the reviewing of their progress. So then why don’t more people take better care of themselves and their businesses?
Because the things that are easy to do are easy not to do! Yes, it is that simple. The fact is we just elect not to do it, because it is easier not to.
So what is my point? My point is even though I didn’t want to go to the doctor to get a checkup I did it, because of a Best Selling book I read years ago titled “Looking Out for #1”. Although the title of the book may sound egotistical, it isn’t. The point of the book is just the opposite in that you must take care of yourself if you want to take care of the ones you love and care about. And by taking care of yourself that means you must take care of yourself, physically, mentally, financially, and spiritually to have the ability and the mindset to help others. If you are tired, not feeling good and know you are out of whack you can be certain that the way you are feeling will be reflected in your performance and the ability to perform your duties and accomplish the things you need to be effective in life.
Isn’t it the same in business? When the sales are not as you think they should be or the business seems to be stagnant and not growing as we think it should be and it acts a little sickly what do we do? We generally ignore it and tell ourselves that it will get better just like if the business had the flu or a cold thinking it will go away soon.
In both situations, whether it was your personal health or the businesses health it was because of neglect and we weren’t looking out for #1. Ourselves and our business.
Case in point. Six years ago I get a call from a prospective client of mine asking me to meet with him and take a look at his business, which consisted of nine convenience stores. It was a family owned business with the owner in his early 60’s and a couple of kids involved in the business and the stores were throwing off enough cash flow to give everyone involved a comfortable lifestyle.
I did what I normally do and reviewed and inspected each of the stores to see how they were operated, what their location looked in regards to the present marketplace and more importantly to the future market place and the quality of the assets and of course their profit and loss statements to give them a current market value of their stores. I am not an appraiser and unbeknownst to most people an appraisal is not what they needed. What they needed was an idea as to what their stores were worth on the open market at the present time, which is what I can do since I am active in the selling of convenience stores. Having valued and sold hundreds of convenience stores I am usually pretty accurate at what a convenience store is worth if it were to be sold in the market place at the present time.
Well after looking at all of the stores and their profit and loss statements I gave the owner my findings as to what his stores were worth at the present time and the number was $12MIL. Of course as any owner and prospective seller may respond he didn’t think the number was high enough. However, I explained to him why $12MIL was the correct number and also shared with him the present tax situation and how he would save money on taxes and therefore put more dollars in his pocket, which again is what I focus on. And that is working to put the most amounts of dollars in my client’s pockets. I also shared with my prospective client that the majority of his stores had peaked in their performance based on his operational buying power due his size of operations and the fact the towns in where his stores were located had already started to shift and the stores were no longer “A” stores like they were when they were built, but were now “B” stores and eventually they would probably become “B-“and possible “C” stores in regards to profitability as time went on.
Needless to say the owner for a multitude of reasons decided not to engage myself and my company in the selling of his stores. I understood and respected his decision.
Now fast forward six years later. Same owner, same family, same conversation, same review and unfortunately the same valuation. $12MIL, but this time it was for 10 stores not 9 stores. The same $12MIL valuation was after the owner had built a new store within the last 2 years at a cost of just under $2MIL, but the market valuation of all of the stores was still $12MIL. What happened during the past 6 years? Unfortunately the items I had addressed and presented to the owner six years earlier regarding the stores deteriorating from ”B” stores to “C” stores had come to fruition and if the owner had not spent the money to build a new store the 9 stores would probably only been worth $9MIL. Plus to make matters worse the overall tax climate had changed in the 6 years since I had first met with the owner thereby reducing the amount of money the owner was going to get to put in his pocket.
So what is the moral of this story? To continually be looking out for number #1. Get the annual checkups for your health and your business. Make a point once a year to get a business checkup just like you would for your physical body have an annual checkup for your business. Find out what areas need to be addressed to keep your business healthy and find out what you are doing right. Nobody wants to wait until the last minute only to find out after working for many years they are not in as good as shape as they thought they were and their business will not bring “top dollar” in the market place. Don’t wait until there is something wrong where you have to be in a reactive mode and try to hurry up and fix the situation. We are all guilty of procrastinating and putting off things and we all adhere to the “The things that are easy to do are easy not to do” theory, but we can’t fall for any of this. Many people look up to you and depend on you. Oh yes and the story about the owner who I worked with for 6 years. He ended up letting me and my company help him sell his chain of convenience stores and yes it ended up selling for $12MIL. Funny how reality has a way of not going away and circles back to us.