From finances to new hires, here's how to overcome the challenges of buying a business.
In 2009, I bought my own company out of Intuit.
It's a story I have told many times and one that I thoroughly enjoy sharing with other entrepreneurs, and there are many who have been curious about this process! Purchasing a company from a corporation like Intuit is truly not for the faint of heart. It was also an undertaking that did not make me famous or a millionaire overnight, contrary to what we imagine might happen when one buys an established business from another publicly traded company.
Was buying this company a rewarding purchase that allowed me to become a full-fledged entrepreneur and control my own destiny? Absolutely! But were there challenges along the way that I did (and perhaps did not) anticipate ever addressing? Oh yeah. Let's take a stroll down memory lane and revisit some of the biggest ones. If you're considering buying a company, you might find yourself running into a few of these challenges, but now you'll know how to tackle them.
The challenge: When you purchase a company from another publicly traded company, they are relinquishing that entire business to you. In doing so, there will be no additional support of any kind, financial or otherwise. It's up to you to figure out your own finances now.
The solution: While a plethora of solutions is available to entrepreneurs, including taking out a loan or seeking outside investors, the route I took was the leanest in the book: bootstrapping. Now was not the time to spend and see what happened next. In those early years, you have to run your business like a tight ship. Know your ROI and pay attention to the bottom line. Ask yourself what's working and what isn't. Learn fast or the money will go quickly.
Bootstrapping is not easy to do. Running a lean business means making hard sacrifices that include everything from cutting back staff to penny-pinching your personal spending habits. However, it shows you what you're capable of doing. When business picks up, you can step back and marvel at what you've done. You made it through! Now, you appreciate your business, team and success even more because of it.
2. Getting new customers
The challenge: Previously under Intuit, we were a transactional business. After spinning out of the company, the challenge was how to acquire new customers and keep them.
The solution: While getting new customers in the door may not always be easy, keeping them is a bit easier. I found that one way to keep them was to create a sticky product that had renewals built into it, along with services for annual filings and legal requirements. The creation of this product ultimately sustained us while we continued to grow and forge larger partnerships.
Consider the products that your own startup has to offer for a moment and see what can be done to make them stickier. For instance, think about the blowout chain Drybar. They're known for their styling services, a service made stickier by their membership program for frequent visitors. And for those who want to get the look at home, there are plenty of specialty blow dryers and styling products available to purchase. Think beyond what you offer now to create offerings that make customers lives easier and encourage them to return – and bring along friends when they do.
3. Building a team
The challenge: The only way I could run this business properly would be with the help of a great team. How does one build this kind of team, anyway?
The solution: In a small, entrepreneurial business, you need "doers." While some employees are more cut out for a corporate role – do one job and do it well – we needed team members who could multitask and roll up their sleeves to get the job done. Identifying doers is an ongoing opportunity for any business owner, but it is one that is worth the search to assemble and maintain the kind of team that cares about your business and its success as much as you do.