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Sam Simon gets energized by people who share the same zest for life that he does. It’s what he looks for when he’s growing a business, making a deal or studying an investment opportunity.

“I love entrepreneurs, people who have the drive and the passion to do well,” says Simon, founder and chairman of Atlas Oil Co. and Simon Group Holdings. “There is always a risk in everything that you do. But if you believe in that person, in that leader and you believe they have the capacity to grow and do well, that’s what I care about.”

Simon founded Atlas Oil in 1985 and built it into a $1 billion company that delivers more than 1 billion gallons of fuel each year to customers in 49 states. Around the same time, he started Simon Group Holdings, which has more than 120 companies and direct investments. Both companies were barely a year old in 1986 when Simon made the first of many acquisitions.

In this Dealmakers feature, we talk to Simon about his humble beginnings, his approach to investment opportunities and the importance of being a disciplined dealmaker.

A simple premise

My whole plan when I started Atlas Oil was to fill a need. There were a lot of people in the fuel industry with an 8-to-5 mentality, delivering Monday through Friday. I knew that somebody needed to think of service 24 hours a day, seven days a week. I wanted to build a great company in the energy world because I had seen other companies that weren’t doing that. I spent the time to hire the best people and to understand how to build processes and continually improve and things grew from there.

The first deal I did was in 1986 when I bought a company called Great Lakes Oil out of Detroit. At that time, I didn’t have a strong balance sheet and didn’t have a lot of cash. I negotiated with the guy who had been very successful in steel fabricating. He bought the company in 1979 during the oil embargo for the trucks in his facility. Seven years later, that was not his business. But before he agreed to sell, he said, ‘I have to believe in you,’ and I said, ‘I won’t let you down.’ I still have his letter when we paid off the whole thing. He says, ‘I always believed in you from your passion and your hard work. I knew you were going to pay it off.’

Maximize your investment

If you are investing in a company, take time to assess and make sure the people are the right people. Don’t interview them in the facility where they’ll be nervous and can’t talk to you. Get them away and sit down with them in a different environment so they can loosen up and speak honestly. Also you can’t just talk to the top-tier people. Go all the way down to the receptionist, who will tell you a lot more. That’s where I see a lot of people make a mistake. Talk to everyone. Make sure they are passionate for that business and that they want to grow. Don’t assume anything. It might take you longer, but it’s worth your time to do it right.

Common sense is not common. You have to make sure you have some common sense. We have so many businesses and so many strategies and good, solid people behind the scenes. We call it one plus one equals 11. What does that mean? That means if we connect the dots, we look at strategic alliances and strategic people and ways we can enhance the business. That’s our job. It’s connecting the dots. It’s not what you know, it’s who you know and how you work together. Again, it’s all about people and customers. We’re not smarter than anybody else.

Be solution driven. There will always be problems. In all of our offices and headquarters, we all have white boards. For every problem, there is a solution. Get the team together to collaborate and innovate. You have to get better at every single thing you do. If not, you’re going to fall apart.

The Last Word

Be disciplined and don’t fall in love with the assets or the company. Sometimes, people have to do a deal. They haven’t done a deal and they have money and that often leads to bad deals. You have to understand the trends before you make a deal and understand that each industry’s trends are different. Do your due diligence on the people and the customers. Then look at the balance sheets and the trends and assess where those trends are going. What is the value proposition? What are they offering in value compared to the competition? The last thing is: What can we improve? If we can’t improve anything in a business, it’s probably not a good investment.