Rule #1: “If it ain’t broke, don’t fix it!”
Most buyers are eager to “make their mark” once they’ve acquired a business. But unless the business is losing money, or employees and customers alike despised the previous owner, it is generally a mistake for a new owner to make a lot of changes in the first 6 months.
Many times even small changes made with the best of intentions can have disastrous and unexpected consequences on employee morale and/or customer satisfaction, and ultimately on sales and cash flow. The risks are even greater if the previous owner was beloved by his employees & customers, as all eyes will be trained on you to see what waves you’ll make — presumed to be negative — in this previous paradise.
If you’re the new owner, most likely, you’ve just paid a substantial premium for the “goodwill” of this ongoing business. Respect this, and take the first few months to really get to know your employees and customers, who in reality are responsible for the business’ continuing sales and cash flow. Get to know their true likes & dislikes about working in/buying from your business. Begin by making A FEW SMALL changes to remove their dislikes & reaffirm their likes, and then WATCH CAREFULLY how these changes affect employee morale, customer satisfaction, as well as top line & bottom line results.
If you know of a business owner who’s thinking of selling or buying a business and who might benefit from a complimentary consultation with us, have them contact me, or any of the M&A professionals at www.bradwaygroup.com.
By: Mike Ertel, Transworld M&A Advisors