How To Ensure A Seamless Change Of Ownership In Business
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. What should you do with your new baby to ensure that you get through the critical stage of transition and make sure that you survive and prosper?
You will already know quite a lot about the business and its requirements before you take control of the keys. You should have spent many a long hour in preparation and have drawn up your own comprehensive plan already. This is one of the essential prerequisites when you plan to own a business. They say that when you move a house plant from one position 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 point that you’ve got to remember is that you’ll need to keep all your attention 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.
Wherever possible, have the previous owner add some much-needed stability by staying around for a predetermined period 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. Try not to make any sweeping changes, as clients and employees may react unfavorably. If you make small changes, make sure that you view the results before you progress to make others.
Take the time to meet all the key players — your employees and your vendors. Create a one-on-one, personal relationship with your staff right from the start. Maintaining employee morale at the outset is vitally important and make sure that you establish a positive mode of communication. Try to get in touch with every vendor, if you’re able to, and do whatever you can to establish a positive relationship with these important 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 sustain the business, are familiar with being dealt with in a particular 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.
Establishing goodwill is one of the main objectives at this point. 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 have to give a great deal of your attention to the critical early days and make sure that you grow the business and strive to reach your highest goals.