If you are interested in growing your business, sometimes it is easier to buy existing stores than upgrading unprofitable sites. However, acquiring an old business also requires research, attention, and effort. Choosing what business to buy and making sure it runs smoothly is vital to your future success as a merchant. Furthermore, keeping and attracting customers is an essential part of the process.
The first step is determining what business to acquire. At this time, research is extremely important to know what you are getting.
“For example, if a business has a bad reputation, you will have to work harder to build it up positively. However, if the business you choose to buy is already on a good footing, it can save you a lot of work,” Elie Katz, President and CEO of National Retail Solutions (NRS). “By reading reviews, speaking with employees and merchants, and finding other information on the business can help paint a full picture of what you are getting into.”
Another example, if a store’s physical location is undesirable or the interior is falling apart, you’d want to know what you’re getting into before proceeding. Sometimes issues are subtle or hidden from view, so researching properly can require some digging.
“Make a plan. Set timelines and divide your goals into organized stages of work so that getting set up won’t be overwhelming,” Katz said. “Expect that from the day you sign on the acquisition, you’ll need some time to prepare for your grand reopening. If you’re acquiring a business that is already running smoothly, you may be able to seamlessly continue “business as usual”, without a pause.”
There could be a number of necessary changes for your newly acquired business. This includes selecting a credit processing company. A new account will need to be opened as a new business, linked to your bank. If you believe that the company the previous owner used was not good, do not hesitate to choose a new one. The previous owner will likely be liable for their own termination fee.
“As a new business, make sure that you’re not having to pay to clean up their mess. And when selecting a new credit card processing company, do your research,” Katz emphasized. “Each processing company is different. You need to pick the best program suited towards your business. Asking other merchants, reading reviews, and discussing your needs with various companies is a good way to get started.”
Most credit card processing companies require a clear, fresh account when you have a new business. They do not allow a transfer, so you will have a chance to set up something new. The most important things to look for in a credit card processing company are transparency and low transaction fees. A plus is no long contracts or early termination fees, which will allow you to leave at any time without a penalty.
Also, ask for the business’s pricebook. If they have a POS system, make sure you have full access to all the data as an administrator. It is possible a transfer fee may apply to you as a new business. If so, make sure you know what fees you’ll incur to transfer the POS to your name. Be prepared so that you’re not shocked if there are fees associated with ownership transfer. It’s important that all your business accounts and equipment be registered under your name.
The next step is to ask for the customer list, vendors, and suppliers. Establishing relationships and maintaining contact is a great way to keep things running smoothly. Retaining customer loyalty from the previous owner can be very valuable in keeping your business in good shape as you build up new exposure and bring in new customers.
“Another essential part of acquiring a new business is its appearance! It should be fresh and updated. If it isn’t, it is time to make some changes. This could be new flooring, air conditioning and heating, paint, and cleaning up on both the inside and outside. Once this is completed, you can arrange a grand reopening – and it should be very grand,” Katz said. “Make it a celebration. Remember, this is your chance to recreate your image from day one when you announce the new ownership. This is also the time to start building new relationships. Consider giving out discount codes, advertising locally, and making a big deal out of your new opening under new ownership.”
Update your inventory with fresh, new products and ideas to spice up your business model. Think about adding new novel ideas, a fancy coffee station, specialty foods, or other items that will attract more customers. Every so often, you should be talking to the customers and getting their feedback.
Another way to attract new customers is signage. First, check local laws about whether you can do this. If so, put signs outside of your store that make people want to stop by. Also, consider hosting some events at your location. This attracts customers, makes current customers happy, and puts your business out there.
Nowadays, especially since Covid-19 began, more and more businesses are leaning towards ecommerce to help them stay afloat. Having a website is a great way to feature your products and services online, and help potential customers find you. But the customers won’t seek out your website unless you market it. So plan to invest some money into your online marketing efforts. This may include hiring a developer, SEO professional, social media marketer and/or signing up for services to help you grow your online presence.
“The final piece of advice I have is to advertise and expand your network. Send out postcards. Pace ads in local publications and school/house of worship newsletters. Use an emailing service, such as Mailchimp or Constant Contact to email current and potential customers, keeping them updated on what’s new,” Katz said. “Communication is key to maintaining those relationships and making new ones.”
Acquiring an old business is a big step, which requires careful research and planning. You’ll likely need cash to renovate your location, upgrade your equipment and/or initiate some marketing. If you don’t have liquid capital available, consider taking a cash advance, which is far easier and faster to obtain than a conventional bank loan. With a cash advance, you won’t need to provide as much documentation and bad credit is less of an issue.
“Following these tips can hopefully help you minimize the stress of acquiring and building your business. You are entering a new and exciting business chapter. It is a good idea and always okay to ask for help – and make mistakes from which you’ll learn,” Katz concluded. “Whether you’re starting a completely new venture or taking over an existing business, approaching it methodically will make it a pleasurable and lucrative acquisition, every step of the way.”