What happens after the champagne is popped? Part 2
In my last blog post, we started the conversation about what happens once you set the champagne glass down after purchasing a company. You have your shiny new company and the keys to the door are in your hand. Now what?
The first few days and weeks as the new owner of a business sets the tone for all your relationships with your new employees, customers, and vendors. Your community and industry players are also watching. What you say, how you say it, and how you act will leave a lasting impression.
You want to put your best foot forward with a thoughtful and well-considered communication plan.
The day the asset deal closes, you are hiring new employees. Real people with families, commitments, and aspirations. People who are going to be afraid, no matter how good your intentions and plans for continuity are. How you handle yourself and the company in these early days is crucial. You can’t underestimate the importance of doing this part well.
Communications need to be carefully planned and coordinated, including the:
- Announcement of the transaction;
- Introduction of your new vision for the company;
- What opportunities the new ownership legitimately offers employees; and
- What changes you do intend to make and when.
Your “hiring” process needs to be handled well, too.
- Will everyone be hired?
- Will those hired remain in their same position? Will you be changing their job at all right out of the gate?
- What compensation is being offered? Their current rate of pay or something different?
- Will “stay bonuses” be offered? If yes, how much and under what conditions?
- Who is going to meet with individuals and talk through whether a position is being offered?
- Who is going to help employees complete all the necessary paperwork and ensure that benefit enrollments go as planned?
As discussed in the last post, there are many facets to the new hire processes. We encourage our buyers to put together a hiring packet for each employee that includes an offer letter, a position description, an updated employee handbook, and other materials that may help expand the communication. Draft position descriptions go a long way for setting the stage for a second one-on-one conversation with each hired employee to discuss what changes or corrections might be made and, more importantly, get to know the individual and where they feel they can contribute. Begin and continue your conversations with your employees.
Realistically, you may not plan to offer a position to all of the employees. Think through how you want to handle the conversations with the people who are not being offered a position, down to the smallest detail. Who will meet with them, what’s the script, what resources will be provided, if any, to help cushion the blow, and how will they be allowed to collect their belongings and leave the premises? This is hard for all involved. The “survivors” will be watching and noting whether this is done in a professional and thoughtful manner. Prepare for your conversations with the survivors, as well.
Customers and vendors
Clearly, your customers need to be made aware of the change in ownership. After all, customers are the core of your purchase. You want to retain their business. Vendors play an equally important role, as disruption to your supply chain will slow your ability to achieve your ROI, or worse. Your customer and vendor communication require careful planning and diligent execution.
From a broader, market perspective:
- Will the name of the company change? How will branding change?
- How will you announce the transaction to the market at large?
- What is an appropriate media campaign?
- What messaging will be conveyed through each media channel?
- What industry events should you participate in?
On a specific customer and vendor basis:
- Which customers and vendors warrant tailored, personalized communication?
- Which customers and vendors warrant personal visits?
- What is the specific messaging and communication for each?
- Who should do it? Who is to sign the letter, make the phone call, and go on the visit?
- What is the plan and schedule for follow-up communications (calls, visits, etc.)?
- Should the former owner be involved in the initial introductions? Are they willing, or can they participate? At what level?
Relationships are the foundation for every successful business. How you treat and communicate with your employees, customers, and vendors in the early days after setting the champagne glass down will set the tone for how open people will be to a continuing relationship. Most everyone wants it to work out well, but all of them are now dealing with an unknown party. Guards will be up, and your plans should take their reluctance into account. The ball is in your court to communicate the opportunities for a win-win.
In the third installment of this series, we will turn our attention to what is different when the deal is structured as a stock deal, such as in a family transition.
Do you know what the state of owner readiness is in the state of Wisconsin? The Wisconsin Chapter of the Exit Planning Institute just launched its State of Owner Readiness Survey!
If you are a business owner, click Wisconsin State of Owner Readiness Survey to take the survey now! (It’ll take less than 15 minutes and give you some great food for thought.)
Feel free to forward the blog/link to all the business owners you know and ask them to participate, too. Results will be shared in November!
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