Business mentor: Tips to ringing in the changes

Q. I've bought a business from someone. Is it good or bad to let people know it's under new management?

A. Christine Morton, consultant at Bridgesone, replies. Let people know about the change. They're going to know sooner or later anyway, so use the changeover to your advantage, especially if the business is somewhat rundown. However, the approach you take depends largely on the size of the client base and whether it is a retail or business-to-business operation.

We will assume that yours is a small business with a staff of two to six, which is the typical New Zealand small business configuration.

There are three critical aspects to retain when a business changes hands:

* Preservation of existing client base.

* Retention of your staff (assuming they are good and you need them).

* Continuity of quality product/service.

A customer's key concern with any change is "how is this going to affect me?" This is a time for you to listen and learn, so avoid any drastic changes.

First, do a SWOT (strengths, weaknesses, opportunities and threats) analysis by seeking the views of a small selection of stakeholders, especially suppliers, customers and staff. Ask the hard questions.

These findings will equip you with a valuable view of your situation and the findings can then form the basis of your business plan.

Such an open, inclusive and consultative approach will send important, clear signals that this is your management style.

Second, meet your staff individually and get to know them and what motivates them. These people are, after all, your interface with your precious customers so the last thing you want is to lose or alienate competent, experienced staff.

Next, link the first phase of your marketing plan with your new management announcement. This might mean a visible premises revamp, special offers for a retail operation, especially if the business was rundown.

For a business-to-business operation, use the personal approach. Divide suppliers and customers into A, B and C groups and, using your discretion, personally phone and/or visit those on the A list.

Take the opportunity to discuss any problems (remember your SWOT findings) and how you propose to rectify them. Follow this up with appropriate letters to everyone but make a point of visiting those on the B and C lists as soon as possible. Timing here is everything and this process must be speedy.

If your relationship with the outgoing owners is good and they are willing to do the telephone calls and accompany you on the visits, then so much the better. Finally, don't make the big mistake of many small business owners by trying to do everything.

In short, certainly advise people that your business is under new management. Make sure you have done your homework - and use the announcement effectively.

* Christine Norton can be contacted on (09) 917-9545 or by email

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