You have just purchased a business. Your first goals are to:
- learn as much as you can from the previous owner,
- build positive relationships with suppliers and clients,understand the current systems and processes that drive the business,
- get acquainted with staff and consultants—their individual needs, strengths and preferences.
Fulfilling these takes time and effort, but only then can you set your objectives and plans for turning the business into what you want it to be.
Your purchase agreement required the owner to stay on to train you. This is a critical time and you need to take full advantage of their proximity. Make sure that they are not simply doing work around the business, but that they are teaching you everything that you will need to manage after they leave.
Devote time to meeting key clients and suppliers. Reassure clients that they will continue to receive the good service that has kept them clients; encourage suppliers to have confidence in the business performing as well as it has in the past. Have both parties suggest ways in which you could better serve their needs.
Get to know the landlord. Listen. Do not commit. You don’t yet know what you can and cannot do.
Your staff’s success is your success
While the previous owner is teaching you the systems and processes, make sure that all elements are well documented and that the documentation reflects the current practices. Be prepared to either create or update documentation to accomplish this—it will form the basis of your systems going forward. It is important that you tackle this task while the previous owner is available to review what you are producing and to provide the input and feedback you need to get it right.
You will also need the input of each person who is involved in each business function. Documenting what they do and how they do it can further their sense of value and improve their commitment to excellence.
Meet with each key member of the staff (in a small business this means everyone) to get to know them individually and to understand why they are working here, what they enjoy and what they are good at. What are their personal aspirations? What style of communication works best with them? What are their frustrations? How can you align their personal and professional development goals with those of the business? How can you use their skills and talents to best advantage while challenging them to be the best they can be?
Building from good to great
How does a good company become a great company? Jim Collins, in his book “Good to Great,” said you start by getting the right people on the bus. You need to develop a simple clear concept, your Big Hairy Audacious Goal (BHAG), and you need the systems, processes and focus to constantly work towards it. Before you decide on the goal(s) ensure you understand the people and the systems and processes that are already in place. Do not start making changes or improvements until you have a solid grasp of how everything works now and why it is the way it is. Only then do you turn your focus to the numbers.
To formulate your plan and BHAG you need to know which activities drive revenue, so make sure you implement tracking systems to provide the data you need—numbers relating to activities affecting margins (cost of sales and pricing), volume (lead generation and conversion to sales) and marketing costs (repeat clients, average purchase per visit). In our next article we will look at these in more detail and provide the formula for increasing profits and cash flow. Without tracking the numbers you will not be able to make informed and calculated decisions regarding improvements that should be made nor will you be in a position to shape your BHAG.
Business ownership brings new responsibilities. Employees depend upon you for the income to feed their families and pay the mortgage. Your suppliers and clients depend on you. Your family depends upon you.
These steps may seem overwhelming, but you don’t have to do them all at once. With quiet confidence, and getting something done each day that moves you in the right direction, you will get there. And as you progress, the pace of accomplishment will increase. It will seem slow slogging at first, but as you and those around you see small steps being successful, the momentum builds to a rapid pace of business improvement.
Looking for more information on buying or selling a business? Check out our many resources on www.sunbeltcanada.com