You just acquired a company. Now the real work begins. Working on your new business is the only way to maximize your investment. As your business grows, so will your potential return on investment. To be as successful as possible, begin developing a plan for growth before the papers are even signed.

Especially if this is your first acquisition, taking on the role of owner of a small or medium-sized business (SMB) can be intimidating. You have a vision for your new business and a lot of work to do in order to get there. With such a massive project ahead of you, you should know exactly where to start. Keep reading to find out the essential first steps to take after acquiring an SMB.

Key Takeaways:

Develop a detailed plan of action.
Prioritize the changes you want to make in the business to maximize revenue.
Fill in personnel gaps as soon as possible.
Get on the same page with the previous owner if they will be training you.
Build relationships with the existing employees.

1. Create a Plan of Action

An often overlooked benefit of thorough due diligence is how your fact-finding will assist your post-deal strategy. During diligence, you will likely begin to understand the biggest areas for improvement and challenges you will face as the new owner. Perhaps the marketing strategy needs to be updated or the organizational structure needs rebuilding. Note these potential areas for growth as you discover them.

After the deal closes, you’ll have a period of time between when you sign the papers and actually take over the company. Use this time wisely. Develop an action plan that lays out your plans for the first year. Create specific, time-based goals that will keep you on track. Effective planning will drive business growth.

2. Target Main Areas In Need Of Improvement

Most SMB buyers close deals with at least a loose vision for the business moving forward. From sales techniques and team organization to systems and processes, you probably noted many areas of the business that you hope to change or upgrade as the new owner. Unfortunately, you won’t have the resources to implement every improvement at once.

Prioritize the most important areas for improvement. Consider what issues directly impact revenue and operational effectiveness. For example, the marketing program might not be totally adequate, but it probably isn’t impacting revenue as much as being short-staffed. Pinpoint the areas that will make the biggest difference to the business and implement those changes first.

3. Hire Any Necessary Personnel

Acquisitions can often result in changing personnel. Those in leadership roles may leave the company to follow the previous owner to a new venture. Other employees might get scared off by the instability and find work elsewhere. This can put you in the position of needing to hire critical roles immediately. If you see or expect to see gaps in your new team, prepare to hire as soon as you can because this process can take some time.

A well-functioning team is essential to your success. In addition to filling potential gaps in personnel, you should consider whether existing personnel are effective in their current roles. You may need to rearrange the org chart or replace certain roles with new hires that may be a better fit for your ongoing vision.

4. Get Organized with the Previous Owner

Many SMB deals include seller training in which the seller sticks around for a certain period of time to help train you in the business. This time is highly valuable to you as a buyer because the previous owner knows everything about their business. That means you have the opportunity to extract as much information as possible from the seller about how the business runs. If you had any unanswered questions during due diligence, this is your chance to ask them.

After the deal closes, make sure to set expectations with the seller. Decide how and when training will take place. It might help to develop a checklist of everything you need to learn to ensure you’re fully prepared by the time the seller has fulfilled their obligation to you.

5. Establish Relationships with Existing Employees

Changing ownership can make existing employees feel uncertain about their job security and the future direction of the company. Since the success of your new business depends on the sustained productivity of leadership, teams, and staff, you should make a point to build trust. Be transparent about your goals and how employees fit into that plan. Understand the current company culture and consider how you might cultivate positive report moving forward.

Introduce yourself to any employees that you have not met previously and get to know how their role fits into the overall business. Ask for their input on what improvements they recommend or how they see the trajectory of their career. Reaching out personally will ease the transition for employees and encourage loyalty which will make your job as a new leader easier.

Plan Ahead of Time

The best way to set yourself up for success when you acquire a company is to plan ahead of time. Even before the papers are signed, you can begin to create your action plan. Begin sketching out an outline as soon as your vision for the business starts to develop.

This process is much easier after a thorough due diligence process. You’ll learn how well the business is operating, opportunities in the industry, and areas for improvement. Use all the information uncovered during the due diligence process to create a roadmap to build up the business and make the most of your investment.

Learn more about how proper due diligence can impact your deal here.

5 Steps to Take After Acquiring a Company