Merchants looking to grow their business have the choice of either opening a greenfield site and building from the bottom up or acquiring a competitor business. But buying a branch from one business and integrating it into a different business and culture can be a complicated process.
Before any acquisition actually takes place, months of work will be carried out to make sure this is the right move for your business, from branch visits to commercial and legal due diligence. From all this information, you should create a 100-day plan which will form the cornerstone of any successful acquisition.
This plan will cover each area of the acquisition from people and plant to customers and suppliers, providing a step-by-step roadmap setting out what needs to be done, by whom and by when.
One of the main components of establishing the acquisition price is the work that identifies the benefits the acquisition will create, how that benefit will be derived, who is going to own delivering it, and when that benefit will be complete. Tracking these and ensuring they are delivered is as important as capturing the new opportunities that arise post-acquisition.
Identify the right people
For independent merchants, identifying the top 20 people who are key drivers of the business is probably the most important aspect to get right. As part of the 100-day plan, evaluate these key people and make sure they stay engaged, retained and motivated throughout the acquisition process.
Not only is retaining your existing colleagues important, but so is ensuring that your existing customers and suppliers are retained while you integrate your new branch. Spending time to identify crossover customers and suppliers will allow you to de-risk the transaction, by categorising and prioritising who you need to talk to and when, and gauging what their reaction could be.
Having created your 100-day plan, it is important to assign someone to track it and follow up with each member of your team on how they are doing whether deadlines are being met. This project manager’s job is solely to oversee the implementation of the 100-day plan and to be a single source of the truth for the owner on how the acquisition is progressing.
Create a communication plan
In our experience, implementing a strong communication plan from day one will make the difference between a ‘good’ and ‘great’ acquisition. Think about the messages you want to convey, to whom and when, to make sure that they come with you on this journey and feel part of the process, as opposed to having it imposed on them.
On the day of the acquisition, be genuine and communicate clearly to make sure you earn people’s trust and respect. As merchants, customers and suppliers work with us because of the trust and respect we build with them, and because we’ve helped them grow their business. By being genuine and following your 100-day plan, you will quickly earn the trust and respect of your new colleagues, customers and suppliers.
Make sure you keep your own team members apprised of all the changes at the same time as your new colleagues. Even if this means you take your team away from the counter for a few minutes, it will re-enforce the trust and respect they have in you, and vice versa.
Similarly, taking the time to meet with all your new colleagues on the first day is a vital key to success.
The most common question asked by those being acquired is ‘what do you want us to do?’, because an acquisition creates uncertainty. Telling them that ‘whatever they did yesterday, you would like them to do again today and tomorrow’ will provide the reassurance your new colleagues are looking for.
Don’t forget to speak to your customers and suppliers and give them the same reassurance. Complications may arise if, for example, the acquired business is in a different buying group or new suppliers have credit insurance with different insurers so, as part of your 100-day plan, assess this and take any steps needed to ensure continuity.
The most important thing is to spend your time in and communicate with your new business. Being based there for a period of time not only re-enforces your ‘business as usual’ message, but also gives your new colleagues the opportunity to ask questions. Being able to answer them face to face, or even to say ‘I don’t know but I’ll come back to you’ is an equally quick way to earn trust and respect.
Observe, test, implement
The concept of ‘Observe, Test, Implement’ is often overlooked, but can add significant value. Rather than just replicating your existing processes into the acquired business, take the time to understand what processes they have and, if they are better, retrofit them into your own business – it can pay dividends.
It is important to remember that you made this acquisition for a reason, and you must maintain its existing performance while you work to build and improve it.
At the end of each day arrange a call to track progress, even with large, multi-branch acquisitions. This will allow you to briefly talk through where every member of your team is at, what they’ve discovered and agree what they are doing tomorrow. It not only makes your joined-up approach visible to your new colleagues, but also gives you the chance to take advantage of synergies you have discovered that were not in the 100-day plan. Equally, it allows you to establish that the benefits you were expecting may not be realisable in time for you to change or pivot where needed.
Also schedule a weekly meeting with the project manager to see whether each person is on track with their assigned actions.
By looking at these areas you will be able to not only realise the benefits and opportunities you saw when you decided to acquire the business, but you will also earn the trust and respect of your new colleagues, customers and suppliers.
If you would like to talk to us, informally and in confidence, to understand how we can help you and develop your business, please contact info@moorgatemanagement.com or call Chris Maityard on 07767 291379.