M&A Specialist | Advisor | Author | Consultant

To Go or Grow Your Business

Today is the best time ever for someone in the convenience store business if they are thinking about getting out of the business or growing their business. Yes, it is the best for either one of the two.

Why in the world with the economy the way it is would anyone make such a statement?

Let me explain what I am talking about.

If you are even considering getting out of the convenience store business regardless of what your motivation should be you should do it now. Why? Because if one would do a study of the average sales price of a convenience store over the past 5 years you would find out that overall values of a convenience store that has been in business for a number of years has continually been declining in value. It is not near as bad as the recent deflation we have just experienced and continue to experience in the residential home market, but it has been declining and all indicators going forward show that an upswing in the valuation and selling prices of convenience stores is not in the upcoming future.

 So why would you want to wait any longer if you are going to be getting out anyway? You may tell yourself that it will get better and I don’t want to sell at the bottom of the market, but who says we are at the bottom of the market? The lowest point maybe yet to come.

In September of 2010 I read that the unthinkable was happening in the commercial real estate market and that is that they are starting to have short sales for commercial real estate something that has never happened in the past. Do you think this is a unique and isolated incident? Unfortunately based on the loss of jobs in the market place and the many businesses that have ceased to exist and the many people who are working from their home offices it is not a wonder that there are not more of these commercial real estate short sales occurring.

Now that I have stated why it one of the best times to sell if you would think about selling let me explain why I think it is one of the best times ever to buy too. No, I am not talking out of both sides of my mouth what I am doing is stating a fact based on reality.

 The reality of the situation if you are in the growth mode and have the infrastructure to support the addition of more stores and the energy level to go the distance you should be very aggressive in today’s market.

You may think I am making this statement based on the fact that I said that the prices of convenience stores are declining and therefore one could get a good price in today’s market place. Yes, that is one of the points I would make, but more so than that I want to stress the convenience store business has the tendency to perform well in difficult economic times.

When money is in short supply people tend to think more short term than long term and this type of thinking is reflected in their buying habits. They try to hold onto their cash longer and instead of buying large lots they will begin to buy in fewer quantities which are what a convenience store sells.

Plus even though the banks and commercial lenders have tightened up their lending practices there is still money out in the market place to be had and sellers are now educated enough to know that if they are going to really sell their store they are going to have to participate in the selling process with some owner financing.

And finally the cost of money is cheap. It is probably the cheapest we will ever see money for a long time. If the economic forecasters are correct about the possibility of us experiencing upcoming inflation then déjà vu of the late 1970’ & early 1980’s of double digit interest rates.

When interest rates are cheap as they are today you can borrow more and in essence buy more store for you money.

So don’t spend too much time sitting on the sidelines waiting of prices of stores to go up and the cost of money to go down. If you are thinking about “Growing or Going” now is the time. These are the good ole days of today.


Straightforward Advice for Cashing in on the Full Value of Your business

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