Don't Change Anything 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 you've thought about, the best thing that you can do
is nothing, at least at the very beginning. That's 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. Don't
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 you've got to learn before you can earn is most applicable in this
situation.
The Seller's 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, no seller has ever made it
through the entire training period for any business. Sure, they have a
role to offer some insights, but I've always found them to be more of a
hindrance than an asset. Of course, if it's 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 shouldn't buy it.
Pick their brains as best you can. Always keep the
relationship friendly; you never know when you'll need them and they can
remain a good source for brainstorming down the road. However, this is
now your business, you're the new boss, it's your show, and it's 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 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 business's future.
- Each one of them has a role to play.
- You're 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.
- You're 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; they're nervous, so don't interpret this
as anything other than a demonstration of their anxiety. Don't feel
pressured to reply to anything that you haven't thought through and
never make any promises simply to win them over.
End the meeting by asking each one of them to
prepare a report, due within one week, that outlines: what they believe
can be done to make them more effective at their job, and second, if
they were the new owner, what suggestions they would have for the
overall business. Tell them that all reports will be kept confidential,
that you will review it with them individually and that you expect
everyone to have it submitted on a timely manner (a note here: if any of
them are late, you can expect that person to be a trouble employee and
chances are they will not last).
It's Time To Get Busy!
So you've got the transition period completed,
you're feeling comfortable with the business, the employees are feeling
positive, you've reviewed their reports, it's 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. There's 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 don't. As
such, dig into your customers' 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 can't 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; it's improvement that
you're striving to achieve.
Step Three: Sell Off Useless Assets if Applicable
If
the business has acquired useless inventory, equipment, or any other
obsolete asset, then get rid of it. There's no need to keep any assets
around that take up space and do not produce revenue.
Step Four: The Marketing Plan
In
concert with Step Two, assemble the marketing plan for the business.
Keep in mind that marketing, 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. End of story. You may buy a business that excels at
marketing, which is great. However, marketing also requires continuous
testing and measuring. So even if they're great at it, make certain that
you set forth additional strategies within this discipline.
Step Five: The Business Plan
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 with unrelated information and
useless pie charts and graphs. On the contrary. Done right and it can
be a bullet point description of:
- Everything you want to do
- Who is going to do it?
- How it's going to get done
- When is it going to be completed?
- How will it be continually measured
Now you're set. You've 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; they've contributed to the
company's 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!
