What to Do After Buying an Existing Business
There are many advantages to buying a pre-existing business. While there may be upfront costs to consider when it comes to purchasing, the risk is much lower than it would be to build a business from the ground up. Plus, as the buyer, you could also acquire important assets, such as patents, copyrights, community good-standing and even essential personnel.
Before buying a business you’ll want to consult with a certified appraiser, business broker, and other professionals to ensure that due diligence is completed, terms are negotiated, and the price is fair. After the deal closes, it’s time to get to work—but what should you do first after buying an existing business?
The Transition Phase
After the acquisition takes place on paper, there may be a period of transition, where the managerial shift will take place. Instead of jumping in full-steam ahead, it’s best to watch and learn for a bit, unless you have intimate knowledge of the industry.
The Learning Process
Before you start implementing any policies, procedures or changes, you’ll want to learn everything you can about the day-to-day, inter-workings of each department and how they currently operate. Keep the lines of communication open with the former owner, and pick their brain for insights and information. Also, if applicable, research clients and customer’s experience; what are they lacking? Are they unsatisfied with the service? What additional assets can you provide to enhance their experience?
Working with Existing Employees
Chances are the business you’ve purchased will retain some of the existing employees. To officially introduce yourself and get off on the right foot, hold a company-wide meeting with all employees. Stress your optimism about the future of the firm, quell their fears about their positions, and make yourself available to any queries or concerns they might have. The goal of this meeting is to set their minds at ease.
It could also be a good idea to have each member of your staff to prepare a report that outlines their duties, and perhaps even suggestions they might have for their position and the business as a whole. These reports can be helpful for your understanding of the company and can assist you as you evaluate changes that need to be made.
Taking the Reins
Sooner or later it will come time for you to take the reins. It may feel necessary to make the place your own by repainting, redecorating, or reorganizing before you get down to business. To make things more manageable, try making a 30/60/90-day plan to implement any new changes, while you work towards an official business plan. A business plan doesn’t have to be mammoth document, but rather an outline that includes but is not limited to:
• The direction you want to take the business
• How it is going to get done?
• Who is going to do what?
• A rough timeline of completion
• How you will measure success?
Ultimately, buying an existing business is a challenging yet rewarding experience. If you’re in need of any guidance at any point in the process, contact your local Sunbelt Business Brokers office. Sunbelt’s experienced brokers have the expertise to help you buy or sell a business and to answer any questions you may have.
After obtaining his MBA, John began his career at PriceWaterhouseCoopers, the international accounting and consulting firm, and subsequently joined Progressive Corporation, a large U.S. based insurance company. John was a Division President at Progressive and subsequently became the CEO of a New York based private equity investment company. In 2001, he founded MMI as a platform investment company and MMI has subsequently acquired 15 additional companies.