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 should already have an excellent understanding of the business and its requirements before you take possession 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. Some experts say that when you relocate a house plant from one spot to another, it goes into shock. The same analogy can be used when it comes to the business, and you will need to ensure you minimize the “shock”.
The first thing that you have to bear in mind is that you will need to focus intently on your goals. Now, probably more than ever, it is essential that you’re not distracted and that you allocate as much time as is humanly possible 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. Create a one-on-one, personal relationship with each of your staff from the very start. Ensuring high employee morale from the very first day is extremely important, and you’ll also need to make sure that you set up a positive mode of communication as well. Look to making contact with every vendor that you’ve got,and if you can, work toward establishing a good relationship with all of these essential 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 may be in charge, but you are still “the new kid on the block” around here, so make sure that your decisions are based on a solid footing.
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 prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream of buying a business.
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