THE FIRST STEPS AFTER YOU BUY A BUSINESS 

 

 

Itís One Thing to Buy A Business, Now You Have To Run It! The first 90 days after you close on a business purchase will prove to be the most critical time in you new ventureís short-term future. There are several key factors that done right will set the foundation for your success. It is very important for you to lay out your plan for post closing before you take over so as to ensure the smoothest transition possible.

 

Donít Change AnythingÖ.Yet!

 

Unless you have an intimate knowledge of the business and the industry, much, if not everything will be new to you. While it is normal for you to jump in full steam ahead and implement many changes that youíve thought about, the best thing that you can do is nothing, at least at the very beginning.. Thatís right, no major changes at all, at least for now. Most businesses experience a downturn in the first three to six months after a new owner takes over. Donít panic, it can happen. However, if you avoid any substantial changes, things should rollover effectively.

 

Since so much is new, it would be impossible for you to set forth any policies or procedures that make sense. What you want to do is to first learn the business, who are the customers, what do they want and expect, understand the employees and determine their role and contribution to the business. Avoid drastic changes. The old saying that youíve got to learn before you can earn is most applicable in this situation.

 

Get in, get comfortable, get smart and then get going.

 

The Sellerís Role

 

Typically, there will be a period immediately after the acquisition where the former owner will be around for a transition period. This varies from deal to deal. In some cases, it can be as short as a couple of weeks while others may involve a long-term training period and even an ongoing consultation/employment relationship. This can be a difficult time. Regardless of the length of the relationship, keep in mind that the seller will still have a very strong attachment to the business and the employees will take some time getting used to a new boss.

 

Interestingly enough, many sellers do not make it through the entire training period.  Sure they have a role to offer some insights but quite frequently they're  more of a hindrance than an asset. Of course, if itís a complicated business then this may not always hold true. If the business is far too difficult for you to take over, or, if it relies on them completely to succeed, you probably shouldnít buy it.

 

Pick their brains as best you can. Always keep the relationship friendly; you never know when youíll need them and they can remain a good source for brainstorming down the road. However, this is now your business, youíre the new boss, itís your show, and itís time to get the show on the road.

 

Prepare a comprehensive list of everything that you want them to cover during training. This includes everything from how to operate the alarm systems down to providing you with their evaluation of the employees. One subject that should be covered at length is to ask them what they would do in your situation. Ask them to outline what their business plan would like and what things that they feel you should explore as the new owner.

 

For the first couple of weeks, let them keep their office as is. Set yourself up alongside them as watch what it is that they do each day. Observe the flow of communication with clients, employees, etc. Continually ask questions. Do not simply allow them to do their job as they did before; you need answers so question everything.

 

Meeting with Employees  

Set up a meeting the first day with all the employees. These people are naturally going to be nervous about you, their job and their future. Most people abhor change so be sympathetic to their situation. No matter what plans you have, let them know:

 

There are no major changes planned
You are very optimistic about the businessí future
Each one of them has a role to plan
Youíre eager to build the business
You are available to speak to them at any time regarding any concerns they have
They are expected to contribute to the success of the business.
Youíre counting on their support to build the business
You realize that there will be a transition period and it may take some time for them to get used to you and vice versa.

The objective of the first meeting is to set their minds at ease. Open up the floor to questions. Do not worry if not a single person has a question; theyíre nervous so donít interpret this as anything other than a demonstration of their anxiety. Donít feel pressured to reply to anything that you havenít thought through and never make any promises simply to win them over.

 

 

Itís Time To Get Busy!

 

So youíve got the transition period completed, the employees are feeling positive, youíve reviewed their reports, itís now time to get down to business.

 

Step One: Make the Place Your Own

 

Get the place cleaned up. Throw on a new coat of bright paint, have everyone clean up their work areas, remove old files and throw out unwanted furniture, old posters, etc. Give the place a new look. You do not have to spend much money at all. Set the standard by keeping your work area spotless. Thereís no need to be a mess no matter what your prior work habits were. You cannot expect any employee to do anything different than you so if you want to run a well oiled, organized business, it all starts with you.

 

Step Two: Learn the Business and What Oils the Engine

 

Perhaps the most critical thing you can do in your initial tenure is to really learn the guts of the business. The answers are readily available but you have to ask the questions. Make it your goal to speak with customers, suppliers, employees, competitors and anyone else associated with the business to get a true picture about the business and the industry and where you fit in. Generally, the customers have the answers and quite often businesses do an awful job of satisfying the clients. They may think they do but the truth is that most donít. As such, dig into your customerís wants so that you position the business as a place where they want to do business.

 

Your employees are a pivotal link in this process. Get them involved. They will be far more effective carrying out plans they have helped develop than they will executing strategies that have been dumped on them.

 

Based upon employee reports and fact finding, compile a detailed listing of everything you want to do in the business, eventually. You canít do it overnight. However, by noting these potential items, your business plan will begin to marinate. Work at organizing your list by the area within the business (sales, marketing, accounting, operations, etc.) and keep it up to date.

 

Develop a 30/60/90 day plan for each specific area of the business. Follow up diligently to ensure timelines are respected. Change does not have to be monumental or drastic; itís improvement that youíre striving to achieve. 

 

Step Three: Sell Off Useless Assets

 

If the business has acquired useless inventory, equipment, or any other obsolete asset, then get rid of it. Thereís no need to keep any assets around that take up space and do not produce revenue. 

 

Step Four: The Marketing Plan

 

In concern with step two, assemble the marketing plan for the business. Keep in mind that market is without a doubt the simplest thing to do in a business and something that is made overly complicated by most companies. Marketing is simply a matter of finding out what the customers want, and then giving it to them at terms that make sense to you and them.  You may buy a business that excels at marketing which is great. However, marketing also requires continuous testing and measuring. So even if theyíre great at it, make certain that you set forth additional strategies within this discipline.

 

Step Five: The Business Plan

 

The Business Plan can prove to be an invaluable document and a blue print for success, Therefore, it is needed but must be done correctly. A business plan does not have to be a long document.   Done right and it can be a bullet point description of:

 

Everything you want to do
Who is going to do it
How itís going to get done
When is it going to be completed

 

Now youíre set. Youíve got a solid understanding of the business. You know what the customers want. You have a plan to deliver it. Your employees are sold on you; theyíve contributed to the companyís plan. Focus like a laser beam and execute. Measure absolutely everything. Strive to get better in every way and everyday! If you constantly think about how you can make your business bigger, better and faster then you cannot help but be successful!

 

 

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