Acquiring another business is a major achievement, but believe it or not, the purchase is often the simple part. Figuring out how to successfully run a business once you’ve bought it requires hard work and strategy — and the first 90 days after a business acquisition are critical.
Here are five post-acquisition steps that can help you set the stage for future success.
Before you make any changes to the business, consider instituting a strict two to three-month observation period, during which your sole goal is to learn the ins and outs of the business.
Start by checking out the business’ various tools and resources. What payroll software does it use? How are the company’s data security systems? Take note of any processes that contribute to the ease and efficiency of daily operations, as well as any systems that detract from it. Consider how these tools compare to what your other business uses. Depending on which business’ systems work better, it may be more efficient in the long run to combine resources between your two companies and migrate everything onto one platform.
You should also make an effort to sit in on marketing meetings, observe sales calls, peruse inventory, and familiarize yourself with the hiring process. Taking steps to understand every aspect of the business will show you what’s working and what’s not, so you know where to direct your energy and resources going forward.
A change in business ownership can be stressful for employees, who often worry they’ll lose their jobs. In the chaos and uncertainty following an acquisition, it’s crucial for you as the business owner to minimize fears and establish a clear line of communication.
Start by calling a company-wide meeting to introduce yourself to the employees, answer questions, and calm any nerves. Let them know you’ll be taking time to get to know them, the business, and its processes before you make any changes. From there, set up smaller meetings with employees in leadership positions to get a rundown on how each team is progressing with its goals for the quarter, as well as what problems they may be facing.
You may also want to offer regular office hours where employees can introduce themselves individually and ask questions.
You probably already took the time to assess the financial health of the business before you bought it, but it’s still a good idea to examine everything again once you’re on the other side of the deal. Make a point to talk to the CFO (or other applicable people) for a briefing on the business’ financials, then review the records with the help of a professional. You can hire a financial consultant, or take advantage of resources like SCORE, a business mentor service that provides free financial planning and business development advice.
Once you comb through your business’ profit and loss statements, cash flow statements, tax statements, and bills, you may discover money leaks or other issues you need to address. At the very least, however, you can use the information to set revenue goals going forward, or make decisions about where to cut costs.
After you’ve spent time getting to know the business, it’s important to inform customers about the change in ownership. Consider sending out an email newsletter to introduce yourself as the new owner.
Take the opportunity to clearly explain which changes to the business, if any, will directly affect them, and communicate your general timeline for assessing and implementing changes. While you’re at it, make it a point to thank customers for their business, assure them you’re committed to their satisfaction, and explain that your team is always available to field questions and concerns.
Compile a list of all the changes you’d like to make, then divide the list into two categories. One category should include the changes you need to make immediately to improve your business’ daily operations or bottom line (or both), and the other should list changes you can wait to implement, like flexible vacation time for employees or a building remodel.
Write down the following information next to each item on the list:
If the business is in good shape, you may not need to make any major changes for half a year or more. If, however, there are failing systems in place, you’ll need to act faster to see results.