By Jim Callahan
Who among us has not been bitten by the failure bug? All of us, including me.
The question that sometimes lurks in our minds is usually this: Was I a victim of circumstance or did I play an active role in this bad luck incident?
I decided a personal theme for this month’s column was in order since we are about 30 days from ushering in a new year. The beginning of a new year always offers a ray of renewed hope and visions of greater success. It also provides us opportunities to assess the circumstances that seem beyond our control and investigate some measures that can swing the good-luck pendulum back in our favor.
Because most in the business world can attest, the difference between success and failure isn’t being on the right side of Lady Luck, but what position you chose to be in when she came to call.
BORDER WAR
More than 30 years ago, shortly after acquiring some small Exxon and BP distributorships in a part of western Georgia very close to the Alabama line I had learned my first lesson in choices. About that time, Alabama lawmakers had lowered state fuel taxes so they were much less than Georgia. Competition at the border then got fiercer, very quickly.
That hadn’t always been the case. Previously, Georgia claimed the cheaper fuel because of consumer-friendly taxes on the books. Then there was a steady flow of Alabama residents who flocked to neighboring Georgia in search of that elusive “cheapest gallon of gas.”
With the change in Alabama, we were watching the rear ends of vehicles with Georgia license plates heading west as they sought out the border towns to take advantage of lower gas prices.
As if that wasn’t bad enough, it was around that same time Georgia lawmakers rescinded the prohibition on “below cost selling,” which generally means that no retailer may sell gasoline at a price less than the net cost to the retailer. My small company was suddenly outgunned by many larger companies eager and able to lose a bit of money in return for building customer volume.
While I wasn’t personally aware of the pending changes at that critical juncture, I was fully aware going in that business is all about risk and reward. However, just because you take the risk doesn’t mean you are going to reap the reward. After 44 years of knowing pretty much nothing but success, albeit on a small scale, I’ve learned a lesson or two along my journey.
One lesson I believe and have tried to follow during my career is not to allow complacency to stop you from being proactive when it comes to making smart business decisions.
Going back to those long gone days near the Georgia-Alabama state line, the local laws and shifting tax burden seemed totally out of my control. But when you get down to the nuts and bolts, I hadn’t studied the political landscape, which can quickly put you behind the power curve—especially when you’re a convenience store retailer. If I had done my homework, I would have known that there was a bill pending in the Georgia legislature to rescind the “below cost” prohibition on fuel.
In the same vein, I’m sure there were public hearings scheduled to discuss a bill in the Alabama legislature to reduce its state tax on fuel. If not, it was still something I should have been aware of.
I encourage every retailer new to a market that when you are expanding, take a broader view of what you are encountering with your investment. Do a complete assessment—not only of the property, utilities, taxes, etc., but of the surrounding political landscape.
There are numerous c-store businesses in the industry that can attest to the fact local laws can appear on the books and if you aren’t paying attention, can squeeze your profit margin to death.
A good example is the increasing volume of tobacco ordinances coming out of local jurisdictions.
Bad luck sometimes appears out of the blue, but often the circumstances can be handled in one way or another depending on the choices you make.
Here’s to a happy and prosperous new year.
Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on cstoredecisions.com. He can be reached at (678) 485-4773 or via e-mail at [email protected].
