Southlake TX Business Oppurtunity | How Long Should You Keep the Seller of a Business On Board?
For business owners operating in the competitive business state of Texas, any business opportunity is either a way to succeed or fail miserably. Such are the fine margins for business owners operating in the cities of Bedford, Euless, Keller, Roanoke, Trophy Club, Southlake, Fort Worth, Dallas, Colleyville, Grapevine, Mid Cities, and other cities spread out all across the state. For a business to succeed, hard work, business acumen and proper investment is important, but timing is the mother of all virtues. If you are unable to execute powerful business tactics when the time is right, they risk falling flat on their face even if the tactic may be a winner.
A very simple example of timing gone wrong is the idea of an ice cream company wanting to sell beach trip vacations in the summers for loyal customers. This tactic will attract a large number of customers if it is executed in summer times and has a considerable business opportunity attached to it but what if the tactic is used in the winter period when temperatures are in the negative, would the same tactic no matter how successful it has been in the summers work in the winter? While this might be a very basic and crude example of the situation at hand, it does outline the importance of timing in business decision making to make the most of business opportunities that come up.
Buying a Business but not its Control
The common perception about buying a business is that once you buy a business you are able to grab control. Yes, in most cases that is the case, but should you wrestle back control of the business from the seller who has just sold you the business or should keep the seller on for a while longer to make the most of the business opportunity that arise from buying the business.
Keeping the seller on once you have bought the business does not mean making use of that person as the manager and operating head of the business in the long run. Keeping the person as part of the business that they sold off to you, during the transition period is what can differentiate between the success or failure of a company and whether they make the most of the business opportunity on offer. A business no matter what market it operates in or what field it caters to, needs to have a smooth start.
When you buy a business you may have information regarding the working of the business and its profits and growth potential, but even for successful business minds it can take time to adapt their working style in accordance with the business they have acquired or vice versa. The seller of the business knows the internal workings of the business, they have run it for a period of time and therefore are better equipped to maximize the business opportunities and deal with the threats that arise during the transition period of the business.
The question however remains, how long should a seller be retained in the management of the business he has sold off and when is the right time to let him jump ship.
A Double Edged Sword
Deciding on when to let the seller of the business off the management of his former business is a double-edged sword. It can help enhance business opportunities in more ways than one, but there are issues which can be created if the former owner of the business is allowed more time than they deserve. In the rule books of business, there is no set rule as to when the time for a former owners runs out at the organization he once run.
However it is best if they are removed from the business as soon as they have successfully completed the task at hand. But what is the task at hand? The task at hand is essentially making sure that the business is able to transition quickly and smoothly from one management to another. If this is executed with relative ease, then a business can open up multiple avenues of business opportunity to enhance its profits.
The actual task at hand for the former owner of a business can be broken down into the following functions:
- Giving the new owner a low down on the inner workings of the business.
- Ensuring that as long as the transition takes place, the business runs at the already established status quo.
- Identifying the potential problems that have and may arise through the course of running the business.
- Identifying and introducing the new management with important customers.
- Acting as a bridge between the new management and the loyal workforce of the business.
- Outlining the potential business opportunity.
All of the tasks mentioned above can differ in complexity and length from one business to another. One business for example may have more simple working patterns as opposed to another one which may have a more complex way of working.
The Buyer Should Ask for Help
There is a latin maxim that applies to almost all purchase deals for businesses, “Cavear Emptor”, this simply translates to “Buyer beware”. A buyer of a business needs to be aware of what they are buying. A seller is not under a legal obligation to help the incoming owner of a business with the finer details of running a business. That is the job of the new owner to take survey of the business, identify the problems and challenges and before closing the deal, have an audience with the seller to understand the problems that may arise. If that is not the case, it can hamper the opening up of business opportunities for the seller.
What is the Perfect Time?
How long to keep the seller in a business’s management is the prerogative of the new owner. However, it is best if they are given a role in the transition of the business before it is fully under the control of the new owner. The time span is subjective and can change from business situation to business situation and most importantly, the comfort level of the new owner. If the new owner is able to take control of the business smoothly, without hiccups, it is best that the former owner is sidelined once the smooth transition between the two has taken place so that they cannot interfere or make profits of the new business opportunities in any way. Contact us for more information.