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We are quite a pragmatic and understanding company. And we know plans always change and never go perfectly. That’s because taking over a business is quite emotional; for us and the exiting business owner(s). But there’s a few things we like to do to make it go as smoothly as possible.
Here’s our list of those few things:
We ask the owner to stay on
It’s important to us to work with people we like and trust. That’s why we never buy businesses from owners we don’t like the idea of hanging around with.
Rather than giving the exiting owner a wave goodbye, we insist they stay onboard to work with us for a period of time. Usually 12-24 months. It buys us time to learn more about the company, how it operates and what role the owner plays within the organisation.
That’s important for us to learn because we need to create a succession plan once the owner does actually leave – so all his roles and responsibilities are replaced and elegated out.
Sometimes the owner stays onboard as a consultant, advising us once, twice or three times a month.
We create a succession plan
Business succession planning involves selecting the right person or team, to take over the role of the business owner once they have left. To succeed you need someone, or a team, who are
- honest and trustworthy
- dedicated and committed
- creative and passionate
- entrepreneurial and cool-under-pressure
- visionary and forward-thinking
- fair and kind
These are not characteristics that are easily identifiable. It can take time, and usually involves nurturing and training to bring out the best in people. And, it’s not always possible to find that new leader within the organisation – Even though it’s not our preference, sometimes we have to look outside to find the right candidate.
We spend time to get to know the team.
For us this is a trust-building exercise. We want the employees to know we’re not here to get rid of them but rather, work with them to continue the legacy of the business. We interview all the employees. Our aim is to find out the important things. Rather than like a job interview, it’s more to do with how they feel about what they are doing and how they think they can do their job even better. Some call this EQ – Emotional Intelligence – rather than IQ – their qualifications for the work.
We ask things like:
- Why they joined the business.
- What their aspirations are within the business.
- How they see the company growing and moving forward.
- What they’d like to achieve personally.
- What they see as the challenges
- How they think we could overcome those challenges
The results from these interviews have always been insightful and we try to take action on what we learn.
“A company’s culture is it’s personality, and the attitude employees bring to work shape that personality. The best companies in the world are the one’s who have employees with amazing attitudes.”
Faisal Khan
For example, we might switch people from one department to another because they are not happy where they are, or seem to have better skills for something else. We change how we might deal with clients or suppliers. We might change simple things like the website, so it does a better job of promoting the company and highlighting the company’s best selling proposition. We might add or remove products or services based on feedback.
We’ve always found employees, both the management teams and everyone else, have interesting ideas. Some of which we can bring into our 100-day plan.
We create a 100-day plan
A 100-day plan sounds great. Presidents and Prime Ministers do them when they take office. Our’s is a little simpler than changing the economy of an entire country.
Our 100-day plan starts with spending time just to get to know the status quo. From experience, no matter how deep our due diligence is, you can never learn everything about a company. Relationships between staff and departments. How things are unofficially done, rather than following systems (that don’t quite work). How different clients are treated. It’s quite intricate and we never intend to rock the boat.
If you sold your business on Friday, Monday would be business as usual. The only difference being the shares would have transferred. No difference on the factory floor.
Our 100-day plan looks at:
- The company’s systems and processes
- How new leads are attracted to the company
- How those leads are converted into paying clients
- How products and services are delivered
- Recruitment and employee benefits
- Exploring new opportunities
- Clarify the vision, mission and principles of the company
The goal of the 100-day plan is to implement “Rhythmic systems” that bring in clients in a predictable way, service them and grow the business almost automatically.
We help to manage the financials
Over the years we’ve found better and better ways to operate businesses, and most importantly, how we handle the cash IN-flow and cash OUT-flow.
Money (and the employees of course!) are the lifeblood and heartbeat of any organisation.
We bring in systems (slowly) that allows us to reduce debtor days within a company and improve cash available to the company to function.
We are also well connected to talented professionals who bring with them their best skills to grow the company.
We speak to clients / customers
It’s fascinating to me why more business owners don’t ask their clients, especially those that repeatedly buy from them, why they chose to do business with them in the first place. It’s a great resource of information. It’s also a quick way to handle any challenges and drum up new business. The best insights are in the “heads of clients” and every business needs feedback loops from their clients to ensure:
- expectations are met and surpassed, and,
- problems are dealt with quickly
We also use this to learn more about how a client uses the services or products we supply. This enables us to identify ways we can improve our offering and how we serve them. It also helps to strengthen relationships.
In Summary
Putting your business in the hands of another can never be easy. After all, it’s your life’s work and that same business has given you an income, love, joy, happiness, stress and challenges throughout your life. But you still love it. You have employees to look after too when you’ve gone. Finding the right, trusted hands can be difficult.
That’s why we openly share our post-acquisition plan with everyone. It allows them to see inside our company a little and discover what we are all about.
If you’d like Rutland to acquire your business, or help you as an adviser to improve your revenue and profits, reach out and speak to us. Calls are always in the strictest of confidence. We’d love to hear from you.
