This post is for any retailer, any where — in fact, it might be fair to say this post is for anyone who owns a business, period! There are the Ten Commandments we’re all familiar with — but there’s another one, an eleventh one, that we’re going to study today.
The Eleventh Commandment: Own Your Building!
Here’s why: If you are a typical business owner you will never get enough out of your business to retire comfortably. It’s next to impossible to accumulate a nest egg, especially if you’re a typical Mom and Pop style store.
If you’re living in the moment, but want to keep one eye on being prepared for the future, there’s only one to make sure you’ll be okay in your later years. That’s to own your building!
Nineteen years ago, I bought a building for one of our stores. It has not appreciated one cent since I bought it — which really doesn’t sound like good news, does it?
But for nineteen years, I ran my business there. Instead of paying rent, I paid the mortgage. Now, we’ve decided to change locations, and I’ve sold this building. At closing, I was handed a check for EXACTLY what I paid for that building, nineteen years ago.
Which means, you know, I pretty much operated rent free in that location for close to twenty years!
In one of our other locations, I pay $20,000 a month for rent. Assuming everything stays at that level (which is doubtful, to say the least!) in twenty years, I’ll have paid 4.8 million dollars to that landlord, and when I close that store, I WALK AWAY WITH NOTHING.
You have to own your building. Let’s say you don’t close your business, or move your store. Owning your building is still a great idea. After the mortgage is paid off, you have one huge expense off the table, which obviously means better numbers for your business! Or, you could refinance the building, which gives you a huge glut of cash tax free. That can be pretty handy in a pinch.
And then, when you do decide it’s time to close or move or retire — YOU STILL HAVE THE BUILDING TO SELL!
I can’t stress this strongly enough. Learn and listen to the eleventh commandment: Own Your Building!
