I just bought a business, so what do I do now?
So you’ve found a business that you think has real potential. It’s aligned to your passions, the startup phase has already happened (well, sort of - there is an existing audience, product and even a website), and most importantly, you are looking to create your own empire so that you can escape the ‘corporate cubicle life’ and also work on your own terms - hello flexibility with young children needed ASAP!
Yay! You’re a business owner - but what do you do now?
Meet Catherine and Kristy, two besties and busy mums with a passion for children’s decor. These two talented ladies came to us a few months after purchasing an online e-commerce store, Homely Creatures for our Business Planning and Sales and Marketing Planning intensives.
Like so many lady startups, the concept of starting from the beginning can be really daunting, and the beauty of buying an existing business means that some of the hard yards have already been done. Like, there was an established brand, the infrastructure was in place (ie; a website, inventory, customer service) and they had an audience already, including an email list and really solid following on social media.
So why did they need some business coaching?
Catherine and Kristy recognised very early in their journey that they were feeling a little ruddler-less. That is, they needed to redefine the goals of ‘their’ business (not the previous owners) and to set some action plans (with timelines) as to how they were going to achieve these.
What we loved about these ladies, is that they had very clear financial goals. Which means, it was easy to work with them on the activities that would need to be undertaken to achieve them. It did mean we spent a lot of time in the ‘weeds’ of the numbers, which let’s face it, isn’t very colourful, however, very necessary. By the end of this session, we understood what the profit margin was for each individual product - and let’s face it, without this information, it’s pretty hard to work out pricing isn’t it? The result - we were able to forecast the sales for the next year, which in turn, allowed us to work on the marketing activities and promotional periods to achieve these results.
With both ladies working part-time in corporate lives (plus did we mention managing toddlers, ummm….full-time job right there) there was limited time available to work in the business (even with those late nights after the bedtime routine is done). We think one of the most valuable exercises that we perform in our business planning sessions is the ‘time audit’. We broke down the roles and responsibilities, delegated to each of the ladies (dividing & conquering) and then the time it would require on a weekly basis. What did they discover? That things might have to move a little slower than expected, but that’s ok. Everything in its own time is our mantra. In all seriousness, this exercise is really a ‘reality check’ for small business owners. Things ALWAYS take longer than we think, and especially in the early days.
We had to understand ‘who’ their ideal customer was? And where we would find them, and what problem we were solving for them. Taking all of this information plus a fair amount of time working on the overall ‘brand’ for their new business baby, we could establish the sales funnels and customer journey - which meant, we were ready to work on the marketing plan!
Neither ladies have had any experience in retail (other than shopping!), and they have adapted into this space so perfectly. Retail is another world. It really requires you to step out of the business and put a microscope on every aspect to understand how it feels to be a customer. We worked through their website and in particular, the path to conversion, their promotional activities, the key dates on their retail calendar, plus some strategies to move through current product ranges so that they can make way for new product ranges. Not to mention, getting the ladies out from behind the camera and introducing themselves, it was important for everyone to meet the new owners, and they’ve executed this over their socials (in particular) brilliantly.
In our experience, purchasing an existing business is not always perfect. We think it’s also important to highlight some of the challenges that you may face, cause potentially there will be a few:-
- It’s highly likely that you will lose some followers or clients (that’s OK - they weren’t YOUR ideal client). This is natural, and you really want this to happen so you can nurture the audience that is aligned to you and your brand voice.
- Similarly, when you first communicate and email a database that may not have been used for a while, you’ll see a few unsubscribes. This too is completely normal. Think of it as a ‘Marie Kondo’ clean out….only keeping those subscribers who ‘spark joy’.
- Building YOUR ‘brand identity’ will take some time - that’s normal, and that means that the sales may take a little time too…in this way, it really can be like the startup phase so stick with your plans - all good things come to those who wait.
- You’ll need to budget for some upfront costs within your business (in addition to the capital investment that you paid to buy the business). Unfortunately, the costs don’t stop when you buy a business - you’ll need to do a thorough forecast for the operating expenses needed to run the business on a day to day basis. For example, when you’re running two jobs plus managing an online store, your social media will play a huge part in executing your marketing plan - without a ‘scheduling app’ you’ll be driven to distraction. This costs money, not much and definitely worth it - but it will cost you ongoing, so think about all of these tools that you will use to operate your business efficiently.
- Stock. This is a big one. You may be sitting on stock that hasn’t moved, or isn’t priced competitively. If you can, consider this when negotiating your purchase price, but if not, think of a strategy to move this stock fairly quickly. You might take a hit on your bottom line in the short term - but honestly, holding off on new product lines will only hinder your ability to make some money in the long term.
And finally, you need to have a plan. You need to understand your ‘why’, which will directly relate to your goals, which will directly feed into the sales and marketing plan, which will give you all of the ‘things to do’ to execute and get you to your end game.
We absolutely loved working with Kristy and Catherine and their business, Homely Creatures. Their attention and focus (during some pretty long sessions) was phenomenal. They bought honesty, vulnerability and a willingness to learn to the session, and we can see that it’s paying off with how successful their business is going. Here’s a little of what they had to say…
So, have you bought a business? Tell us your experience (in the comments) and share any top tips you’d recommend to others who are thinking about doing the same.
About Kristy and Catherine
“We adore the vast styles, products and brands of children’s decor the world has to offer. Our products are unique, stylish and perfect for children, mum's to be designing the nursery, or the young at heart”.
As mums of toddlers, we want to inspire our children and all others in supporting handmade and fair-trade. We hope to bring you and your little ones some joy every day with our gorgeous Homely Creatures."