So, you’ve come to agreement with a business owner to buy their business, and to help them into retirement. You, the ambitious entrepreneur, bring new energy and ideas to the opportunity. You’re going to take the business forward in a way the other guy couldn’t. But is it all about you?
Let’s examine what you’ve purchased. Equipment, inventory, trademarks, patents, brand, customer lists, distribution agreements for coveted brands of product, sales, maybe even the building?
How about the people?
If you lose the existing employees, (and you’ve already taken out the owner & perhaps their spouse & family), you might well be left with an empty shell of a company.
The pattern I see today is infuriating and disappointing. Buy the business – cull the employees. Replace the ones who got the business to where it is, with cheaper people, who consider you the boss and have no loyalty to the old boss and the old ways. I recognise that some employees will not make the grade, due to their failure to adapt successfully to major change at their place of employment. But many will, given the chance. Seems straight forward, but I have seen this repeat itself over and over again, and a year or so later, I have watched the business fail…
Call it corporate memory perhaps, but once the prior owner is out of the picture, who remembers “the stuff” that made the company attractive to you in the first place? Even in a failing business, that you bought at a discount, there are key elements that the existing staff do bring to the table – names & face recognition for all of your customers & vendors – how “it” is done – where to find certain inventory, how the equipment works… There is great value in keeping the employees, and many CAN make the grade in your new company.
The keys to successful change management are being patient, listening, and presenting your vision.
I believe there is great value in having a number of meetings with the outgoing owner, their family, key customers and key vendors. AND with all employees – one on one, and in groups. Why does the business do well? What does it do poorly? Customers have choices; why have they chosen this business? Find the answers to these questions, FROM THE EXISTING STAKEHOLDERS, and you will have a critical understanding on which to build your new vision.
Are the systems in place enough to let you run the business with new employees? I created a short video on this – Promised for Wednesday. In most small businesses the systems are not written down, they are passed from owner to employee to new employee, verbally, and by demonstration. Cut a key employee too early and you lose this.
Be fair in your evaluations. Perhaps you could use PI Surveys. Some employees do not present themselves well in front of a new owner, but do an awesome job when in comfortable surroundings. Give them time to adapt to you. Give them Permission on Monday, to treat customers the way they treated their good friends on the weekend.
Re-engage the employees. They have just lost an owner, perhaps the family as well, and now you are changing the business where they’ve grown comfortable. They may well be grieving the losses and the changes. Respect that perspective. Help them understand the changes you want to make, while you pay homage to the past. Do Your Employees Reflect Your Vision? The employees need you to articulate your vision. Paint a picture. Use examples. Hold Pre-Shift Meetings. Give them some understanding of where you want to take things, and encourage them to play a part in getting you there.
Replacing employees can be expensive. Losing employees unnecessarily is very expensive. And in a small town, can be very damaging. And for most small businesses, customer loyalty is built on seeing familiar faces. There are so many variables in the customer relationship, but In the End, the Customer Decides. Keep the employees, and you improve the odds in your favour.