You might well find yourself wondering what you got into after buying an existing business with major problems. That’s why it’s critical to have answers to the question, “What to Do After Buying an Existing Business?” Ideally, you should get most of your answers before you buy the business, so research and planning are critical.
You often face problems with your own existing business or career, so the life of an entrepreneur isn’t easy. However, the following steps are generally critical in integrating your new business with your existing obligations:
- Appoint an integration team to develop an action plan and timetable for moving forward. Your major goal here is to pave the way for both businesses to continue operations without major disruptions.
- Develop an operational plan to recommend changes, develop strategies for retaining existing customers, and work out what changes you want to implement as quickly as possible. Develop a working plan to integrate and consolidate the businesses if that’s what you want. Choose software and accounting systems to adopt, and that best requires a totally different system than either company used before.
- Take the time to reassure employees that you want to retain them, and explain that uncertain employees will need to prove their value. Don’t hesitate to clean the house of employees who spread negative information about their changes because they will eventually leave and possibly cause more damage over time. New owners are expected to make changes, and it’s best to do it as quickly as possible.
- Communicate your business goals and long-term plans to key employees, stockholders if applicable, and company stakeholders, which includes suppliers, investors, major clients, maintenance and repair staff, salespeople, customer service staff, and production staff members, who might face radically different or expanded jobs. Communication relieves the stress of ownership changes and eases the transition.
- Reassure your bulk employees if you plan to keep most of them, but you should expect certain losses as inevitable. Employees get nervous when there are mergers, changes in ownership or major expansions because these events are usually followed by job consolidation and layoffs. New owners can bleed off the most profitable areas of business and sell assets that don’t align with the new plans. Nervous employees often quit or sabotage their jobs unnecessarily.
- Find common ground by introducing yourself and possibly family members to your staff, suppliers, and business associates. Demonstrate confidence in the business and include your qualifications in the industry. It’s important to court major clients and prove that you will continue business at the current level or beyond
- It’s usually important to demonstrate continuity in production because you probably expected to buy the business and the previous owner’s customers and contracts. Some customers will expect things to continue as before, and some will seek to get better terms. Try to maintain the status quo until you get a better handle on the business.
It’s best to develop an open-door policy for staff members to ask questions, make suggestions, get further information, file complaints, and request chances for advancement. Change management can become complex, but easy communications and transparency are your best allies for winning over your new staff. Letting your people know what to expect and following through with your plans can transform even those who disagree with your plans into reluctant supporters.
MergersCorp M&A International is a prominent and experienced global advisory firm. It offers professional merger and acquisition advisory services to its global clients that want to buy or sell businesses. Their interests are protected in the deal with its professional support services. This team of M&A advisors, investment bankers, and brokers help companies with $500,000 – $250 million annual revenues. You can visit MergersCorp.com for further information.
