So you have completed your due diligence, talked to all your advisers and professional consultants, taken all the steps necessary to value a business, lined up your financing and taken the plunge. Now, how should you go about ensuring that you’re new baby gets through the pivotal phase of transition and prospers over the long haul?
You will already know quite a lot about the business and its requirements before you take control of the keys. You should also have carefully prepared your own comprehensive plan by now. This is probably the most important fundamental prerequisite when you decide to own a business. They say that when you move a house plant from one position to another, it goes into shock. The identical analogy can be applied when it comes to a business as well, and in both instances you should always strive to ensure that you minimize the “shock”.
The first thing that you have to remember is that you should always concentrate intently on your goals. At this point, probably more than at any other time, it’s crucial that you’re not distracted and that you give as much of your own time as you can to this new enterprise.
If possible, look to having the former owner add some much-needed stability by staying on premises for a pre-set span of time. He or she can act as an advisor and can be seen (but maybe not heard as much) by clients, customers, employees and vendors. It would be best to avoid making any “across the board” changes, as clients and employees may react negatively. If you implement little changes, ensure that you review the results before you go on to make any further changes.
You should invest the necessary time to get in touch with all the important players – your staff and your vendors. Establish a one on one, personal relationship with your employees from the very beginning. Maintaining employee morale at the outset is vitally important and make sure that you establish a positive mode of communication. Try to make contact with each vendor, if you can, and do everything to strike a positive relationship with these key players.
The previous owner and employees represent a wealth of information and you should make sure that you gather this data before you consider implementing new procedures. You might be giving the orders, but you’re still “the new guy”, so always ensure that your decisions are based on a sound foundation.
Don’t be tempted to throw out any procedures, especially record-keeping and bookkeeping. You need to be able to compare where you are now and where you are going in the future, with previous results. You will not be able to make informed decisions otherwise.
Your customers, who pay the bills after all, are used to being handled in a certain way. By all means, review the customer relationship policies and procedures, but don’t be tempted to make any wholesale changes. Your goal is to keep those customers at all costs and to make sure that they are happy during the transition.
You may now own a business in an unfamiliar industry. It is important to get to know the ins and outs of the industry as quickly as possible. Familiarize yourself with the technology, software, programs, procedures and how to handle potential problems in the future.
Creating goodwill is one of the primary objectives now. When you purchase business assets, one of the key elements is this goodwill and whilst somewhat intangible, it is very valuable. Consider doing something for all your key players – clients, employees and vendors. Give some kind of an introductory special offer, of some significance, to your clients. Think of an enhancement that you can offer your employees, maybe some improved working conditions or an upgrade to their terms of service.
In summary, remember that you now own a business which is dynamic. You must pay particular attention to the crucial early days and ensure that you grow the company and achieve your ultimate objectives.
Richard Parker is the President and founder of the Diomo Corporation – The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream of buying a business.