By Domenic Rinaldi, Guest Columnist
A business broker job is not only to help buyers find businesses, but also to help them manage their time once they have the keys to the front door. And what those new businesses owners quickly realize is that those first few months of business ownership are both challenging and critical.
It’s essential to quickly put together a solid plan for those first 100 days. It would be unrealistic to determine your success or failure based on that period of time, but if you don’t plan properly, you will have a very bumpy start to life as a business owner.
Consider the following seven critical steps as you learn the ropes of your new business.
1. Meet with employees. Indeed, meet with everyone on your payroll, but prioritize those who are most important to the success of your business. The key reason is to put these people at ease during the ownership transition. A change in ownership often brings anxiety. The new owner is worried that the key employees may leave, while the key employees are uncertain about their futures. The sooner you communicate a plan and a develop a trusting relationship, the sooner you can put your imprint on the business.
Talk to the mid- and low-level employees as well. They need reassurance, while they also may be sitting on a ton of good ideas that they would like to share if asked. Welcome their input.
2. Meet with key customers. A business doesn’t survive without customers. That’s true for the storefront bakery and the parts manufacturer for a steel producer. Prioritize your most valuable customers. Who are the largest and most profitable clients? Who buys the most widgets? Ask what you can do better to retain their trust. Also, ask your employees about recent lost customers, then meet with those customers and ask what you can do to earn their trust again.
Don’t forget the smaller customers. With proper care and nurturing, they can become your biggest spenders and advocates. Consider appointing a go-getter employee with a new task: customer service rep for small and mid-sized accounts. Perhaps add an incentive for that employee if he or she brings in more business from those existing customers.
3. Meet with key suppliers. New ownership can be a blessing or a curse for suppliers, depending on how quickly they were being paid in the past. You’ll want to spell out your payment policies to your suppliers. While you are consulting with these partners, listen to their suggestions. They can help you succeed.
Of course, big issues also need to be addressed. Perhaps one key supplier doesn’t understand the concept of a deadline, or maybe the products you have been receiving are of dubious quality. Manage these issues, and if necessary, be prepared to make a change before you meet with problem suppliers.
4. Get on top of the accounting. Know who you are paying, how much you are spending and why. Who’s paying you on time and who’s not? These are all concerns you need to examine routinely. You need to identify problems, but more importantly, you need to understand the process of how your records are kept.
You may want to change how the books are done if you’re not satisfied with the process. If you have a knack for numbers, consider bringing the basic accounting in house. If you don’t, use your network to find a trusted accountant. Typically, a new owner can save dollars through a simple financial review. Multiple small savings can add up.
5. Get hands-on experience with the business. If you’re running a small business, you’ll likely do most of the work. But if the business is larger than a storefront, you’ll want to get hands-on experience in all aspects of the business. This won’t make you an expert in marketing or customer service, for example, but it will give you a better understanding of the processes involved.
When employees see the boss in the trenches, it can be a morale booster. It also lets them know that you’re paying attention to what they are doing. That can reduce laziness and theft.
6. Create an issues list. As you talk to employees, customers and suppliers, you’ll start to encounter issues that need to be addressed. Rank these by importance. If you know you have a key manager who’s a little too friendly with a competing business, you might put that high on your list. As you rank your issues, develop an action plan.
7. Refine your business plan. Take everything you have learned and use it to determine how to make the most of your opportunities. What needs the most attention? Where can your unique skills be most useful to growth? What aspects of the business can I trust to certain employees?
Carefully look at the business before you refine your business plan. Don’t rush into changes on day one. Waiting 100 days will lead to wiser decisions, and your patience will pay off in the long run.
Domenic Rinaldi is president and managing partner of Chicagoland Sunbelt, a business brokerage firm that focuses on helping people buy, grow and sell businesses in Chicago and the Midwest.