Now that you’ve closed on your purchase of a business, what are you going to do? Sit back and watch? Closely managing the transition from the former business to your new business is the recommended task at hand.
However, managing the transition presents a number of challenges.
To make the management transition easier on you and any employees who may be staying on board after the acquisition, here are the next steps you should take after you buy a business, as recommended by Business News Daily:
1. Do an audit of the existing processes and practices.
"Regardless of the entrepreneur's background and the amount of due diligence conducted prior to an acquisition, the entrepreneur will never truly understand the business until he or she starts to operate it," said Michael B. Shaw, chair of Much Shelist law firm's business and finance group. "Every company is unique, and an entrepreneur needs to truly understand that business before deciding what changes to make."
One important consideration is the business's security practices.
Steve Manzuik, director of security research at Duo Security's Duo Labs, advised business owners to do a thorough audit upon acquiring a company to identify and address any key gaps, especially if you're buying a startup. A few of the key security measures Manzuik said to look at are as follows:
- What systems and/or cloud services are being used by the business?
- How is access to these systems controlled?
- How are the systems managed? Are there documented standard processes?
2. Communicate with the existing staff members.
Mark Davis, CEO of Puro Clean, said one of the biggest challenges a new owner will face after an acquisition is fear throughout all levels of the organization. "There is fear of the unknown, fear of change, fear of benefits being modified, fear of the direction of the company, etc.," he told Business News Daily. The solution? Be transparent with employees. Talk to them as soon as possible, and make sure they know that you're interested in getting to know them and their company, Davis said.
3. Study and understand the company culture.
Before you try to improve or alter the company culture, stop and analyze the existing culture to understand the key factors that led to the company's success Shaw said. "Rather than starting over with [your] vision for the culture, those key factors should form the foundation for the culture's evolution, which should be an organic process," he added.
In a franchise setting, understanding and respecting the existing culture and processes become even more essential to your success, said Glen Willard, franchise owner of River Street Sweets • Savannah's Candy Kitchen. But you can't just throw out suggestions and expect them to be adopted, Willard said. "Develop a plan that includes how your suggested changes or improvements will benefit the business as a whole, and take it to the top with confidence," he suggested.
4. Plan your changes carefully.
Making numerous, significant changes right away isn't always the best approach when you acquire a business. Shaw said that although you may be eager to make an impact, big moves like this shouldn't happen overnight. "An entrepreneur should begin implementing his or her changes in a manner that minimizes disruptions to employees and customers," Shaw said. "When a business is sold, uncertainty arises for those connected with the business ... and an entrepreneur needs to ensure stability to keep their trust. When an entrepreneur proves that his changes are leading to success, then others will gain confidence that additional changes will create even more success."
5. Be transparent about the changes you're making.
Change can be difficult for all parties involved, and people won't always be happy with the decisions you make. The best thing you can do is to be up front and honest about any impending changes and how you arrived at them, said Matt Moss, a franchise owner of Dogtopia.
And as INC.com points out, it’s also helpful to remember what not to do, including these typical mistakes:
- lack of adequate planning
- an overly aggressive timetable
- failure to look at possible integration problems
- illusive synergies
In conclusion, it’s fair to say that the changes encountered when the ownership and management team of a business changes hands are something that genuinely exist.
It can be challenging, yes, and, as INC.com notes, it is often more of an art than a science, but it can be managed.