SUN CITY WEST, Ariz. — During my career as a multi-store owner, I was able to avoid many mistakes, but not all of them. And some were real doozies!
These are my most common mistakes, and my suggestions for how one can avoid them. (I saved my biggest regret for today’s conclusion.)
NOT KEEPING UP WITH MODERN TRENDS (Continued)
Failing to Keep Up with Maintenance at First — In the beginning, I looked at lint buildup more as a nuisance than a task that required constant vigilance, so I gave lint maintenance a minimal effort. Boy, was that a wrong move!
While we did clean the lint boxes on the dryers, I never thought of cleaning the exhaust stacks, nor was I vigilant enough to clean the lint behind the dryers.
This ended up in a dryer fire that was so bad, it took out the roof of the building. I remember standing in my mat, looking up at the sky! After the fire department was done, I also had hundreds of gallons of water damage.
I also ignored lint buildup in the washer’s drain lines, resulting in many emergency calls due to water backups. I finally learned to be proactive with lint, scheduling deep lint cleaning, both with my dryers and my washer drain lines. Once I wised up, I never had a serious dryer fire or a drain line backup again.
So clean all lint from your dryers, including the ductwork and fireboxes. For me, compressed air from an airgun made easy work of getting lint out of every nook and cranny.
For your drain lines, have them snaked out with a cutting blade (to scrape the crud out). Do this on a regular basis before you have an issue, and you’ll avoid a lot of emergency calls. I did mine twice a year.
Not Creating an Interactive App or Website — Nowadays, people use apps and refer to websites. All I ever did was to “claim my page” on social media sites. That helped, but having your own website is the best. Especially if you are doing pickup and delivery.
The customer can schedule pickup and drop-off times, and may even be able to pay through the app.
FINALLY, MY NO. 1 REGRET
Leasing, Rather than Owning, my Properties — Remember this important lesson: Your business is only worth what your lease says. If your rent is sky-high compared to your market and your competitors’ rents, it will drastically affect the value of your business in a negative way when it comes time to sell.
More importantly, if there are only a couple years left on your lease and your landlord wants you out, the sale of your mat is near worthless. Please believe me here, because I’ve seen this with other mats!
This is why “owning the dirt,” as they say, is a much better long-term option. Being your own landlord is a huge positive!
Yes, there tend to be more leased mats with better locations than private-location mats, but that’s not carved in stone.
On the flip side, a good leased location with a reasonable landlord can help you get established enough so you can earn enough money (and experience) to purchase your own building. In fact, I recommend it.
Plus, a good leased location with a great landlord can be an extremely viable permanent solution.
My problem was that since I was leasing the spaces, some landlords were just too greedy.
On my renewals, one landlord refused to grant anything more than a five-year lease. How could anyone install new equipment on a five-year lease?
So I had no choice but to resort to rebuilding and dressing up my existing equipment instead of retooling with new equipment. This eventually put me at a disadvantage. You may start off with a great lease, but on the renewal, your mat is at risk.
For that reason, I always offered to renew my leases a few years before they were to expire to give myself some negotiating room. Other landlords were happy to renegotiate because they could squeeze a few more bucks out of me, which I was OK with.
But this landlord was clever. He refused to renegotiate until just two months before the expiration, leaving me no wiggle room. This tactic shocked me.
So before agreeing to rent a mat location, always refer the lease to a good attorney with experience in commercial leases.
And talk to the other stores in the shopping center. You can get really important insights into the landlord’s policies before you sign.
There are other negatives about leasing as well. Your landlord may see you’re doing well and want your mat for himself, a close friend or relative.
What if your landlord ends up renting an empty space next to your place to a fish store or a barbecue restaurant? The smell could put you out of business.
When leasing, you never know what can happen. I once asked to add a “non-demolition clause” to the lease, and the landlord got really upset, saying, “Nobody tells me what to do with my property!”
For those reasons, I recommend buying the property if you can. Owning the real estate can be a great investment anyway.
What if you find a great location in a strip mall but the landlord only wants to give you a 10-year lease? Most mat veterans accept only 15-, 20- or even 25-year leases, usually with options. With a 20-year lease, you can retool your mat with new equipment after a decade or so to really boost it and have years worry-free until renewal time.
You may be able to get better terms if you offer to look after the entire property for them, especially since many mat owners have basic technical skills. Most likely, you’ll be showing up nearly every day anyhow. This would have to be well thought out, with various duties listed in a contract, but it might work.
A better possibility is to gather your own investors to purchase a strip mall and this group gives you a “sweetheart lease” for putting the deal together, which may or may not require you as the property overseer.
So there you have it. Avoiding the mistakes I made should help you be more profitable for many years. I wish you the best in your success!
Miss Part 1? You can read it HERE
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
