I just returned from a weekend in Orlando, Florida with my wife and youngest of our four children, our six-year old son Jake. He is a Sponge Bob Square Pants fanatic and he wanted to stay at the new Nick Hotel - a Nickelodeon Studios themed property.
It is operated by Holiday Inn. It’s a tremendous facility – huge, with a ton of activities (that was a good thing because two days of torrential rains got us drenched at our short-lived excursions to Universal Studios theme park).
Imagine that you were a prospective buyer looking to purchase this hotel and experienced the following (which we did):
The check-in was incredibly slow, throughout the hotel there were staff members not uniformly dressed, I came across at least five employees using their own cell phones while manning work stations, signage was poor for the various venues, the layout of the buildings was inconvenient, guest service stations had staff members who were poorly informed and couldn’t answer inquiries or provided conflicting information, at least a dozen games were broken in the arcade, the parking was unbearable, transportation to other venues was nowhere to be found, the restaurant lineups were completely disorganized, it took over an hour to pick up character photos (what we do for our kids) and the phone system was abysmal.
Room rate: $356.00 per night
You could easily draw the opinion that the place is a disaster.
The facility is new, and Nickelodeon has been promoting it non-stop, which is clearly why the place was full. There’s no doubt that over time, vacancy will diminish given these problems.
On the flip side, the hotel was packed – no availability whatsoever. We had an absolute blast (my son went crazy) and there’s no doubt that so did all the other kids. Of course, that is all that matters, although I am certain plenty of parents were not very impressed.
Compare this to what you experience at a Disney property. They never miss a trick. Their parks are spotless, the staff superbly trained and almost brainwashed friendly, their systems, transportation, and guest flow at every venue is beyond reproach. Even the garbage cans are themed throughout their parks and hotels to match the characters (not to mention the toilet paper has Mickey’s famous ears printed on it).
So here’s the question: If you were a buyer looking to acquire The Nick Hotel, would you pursue the business given all of the issues identified?
Any buyer who looks to find only problems in a business would run from the deal.
However, the savvy business buyer would see this as a massive opportunity. While there are issues, they’re all correctable. Signage can be improved, staff members better trained, systems, policies and procedures can be easily implemented to remedy every item identified as problematic.
The educated, well-informed, and committed business buyer determines that despite the issues, the place was full, and with some focus, this is a good business that could easily become great. All it needs is a good Disneyesque make-over. The foundation is there. It has a great brand. The location is solid.
This scenario happens every day. You are going to come across businesses that are less than perfect.
If you focus on all that is wrong, you can find fault with every business on the market and you can easily convince yourself to never buy any of them. Don’t take that approach.
There’s no such thing as a perfect business. If you only pay attention to the landmines, you will never find the goldmines.
This article represents a fraction of what you’ll learn on this topic in the How To Buy A Good Business At A Great Price© series - the most widely used reference resource and strategy guide for buying a business. To learn more click here
One of the biggest problems with small businesses is that often times, the owner does everything. When these businesses are for sale, it is common to identify them as ones where thContinue Reading >
The business for sale market has always had one consistent trend regardless of the overall economy. When a solid business, with provable financials, that can be operated by a wideContinue Reading >
There is an industry understanding that only around one third to fifty percent of all businesses listed for sale actually get sold. This figure is not one that business brokers wilContinue Reading >