Business buying processes, whether they succeed or fail, have a lesson or two for business owners. Though the learning process is different for different individuals, the best lesson, like anything else, comes from the school of hard knocks. If the buyer is a serial entrepreneur, he may learn a few lessons from failure stories, and develop a sense of fortitude and emotional intelligence before approaching the next seller. What are the lessons that buying a business would teach you? Read on…
- Market adaptability:
Failing to understand the market size, demands and shifts in consumer behaviour with respect to the market can prove expensive when buying a business. Of course, to err…the second time is a personal choice! Great businesses have been built upon a solid foundation of understanding the market conditions and dynamics of business. - Hiring/Firing:
The process of firing employees of the company purchased can pose a lot of threats and challenges. A buyer should muster the required courage for either retaining or firing an employee of the acquired company based on a robust future strategy. Trying to please everybody can be detrimental in the long run: tough decisions dictate the course of business. ‘Hire slow, fire fast’ is a concept that has been adopted by some of the most successful entrepreneurs. This strategy, more often than not, can spell success and turn the game around. The reason can be aplenty including technological disruption, ‘go-digital’ strategy, changes in business model and so on. - Process, process, process:
Companies that are process-oriented have always stood the test of times. When process fails, people fail and when people fail, business fail too. Process plays an important role in the buying process of a company. Failing to understand the significance of process can spell trouble big time. If you’re a business owner looking for a seamless business transition process, focus on the process-stickiness of the company. A wise, old manager was bang-on when he said, “How you do your business is important than why you do it in the first place.” - Too many chefs?
Learn to cut the crap at all levels. If you think the management process isn’t just working the way it is intended, take a look at its structure. Do you find the business you just bought has too many chefs, but not enough cooks? You’re heading for an ignominious and avoidable disaster.
There are more lessons to be learnt but that’s for another day in the subsequent part series of the blog.
