Your first 90 days after buying a business

The company you just bought was working before you arrived. Customers were calling, crews were showing up, bills were getting paid. That's why you bought it.

So your first job as the new owner isn't to improve it. It's to keep it running while you learn how it works. It's easy to break something in the first 90 days by moving too fast, and those same months are your best chance to earn the trust of the people you'll depend on for years.

Here's a plan for those three months.

Before day one

A few things need to be settled at or just before closing, because they can't wait. Your attorney, accountant and lender will help, but make sure each of these has a name and a date next to it:

• The first payroll. Employees will judge whether anything has changed by your first payday. It has to be on time and correct, to the cent.
• Bank accounts and who can sign. You need to be able to pay bills and take in money from the first day, and the seller's access to company accounts should end when the purchase agreement says it does.
• Insurance. Coverage in the right company's name, starting the moment you own it.
• Keys, passwords and accounts. The phone system, email, website, software, supplier portals, utility accounts and anything else the seller ran from their own login.
• Licenses and permits. Confirm with your attorney that the company can keep operating legally under you, especially if the seller held a license personally.
• The seller's schedule. When they'll be in, for how long and what they'll focus on, as your agreement with them sets out. The letter of intent and purchase agreement are where that help is promised; the first 90 days are when you use it.

The first month: listen

Spend the first month learning, not deciding.

Meet every employee one on one. Not just the managers. Ask open questions and write down the answers:

• What should I be careful not to change?
• What gets in the way of doing your job well?
• What do customers complain about, and what do they love?
• What did the previous owner handle that nobody else knows how to do?

Do the work. Ride along on service calls, work the front counter, sit with whoever does the billing. You'll learn more in a week of doing than a month of reading reports, and people will notice that you bothered.

Meet the most important customers, with the seller. A call or a visit alongside the person they already trust is worth more than any letter announcing the sale.

Keep a "later" list. You'll have ideas from the first day. Write each one down and act on almost none of them yet. Many will look different after a month; some will turn out to be things that were tried before and didn't work.

Change little, and say so

Employees and customers expect a new owner to change things, and many are quietly worried about it. You can calm that worry by saying out loud what isn't changing: the people, the pay schedule, the prices, the phone number, the way jobs get done.

In the first months, change only what has to change:

• anything unsafe;
• anything illegal or out of compliance;
• any leak of cash, like customers who never get invoiced or a supplier charging more than agreed;
• anything that only worked because of the seller, such as checks only they could sign.

Everything else waits. A new software system, new uniforms, a new pricing structure or a reorganized schedule might all be good ideas. They're better ideas in month six, once you understand why things are the way they are.

Learn the numbers every week

You saw the company's financial statements before you bought it (our post on the financial documents to ask for covers them). Now you need a view that's faster than a monthly statement.

Make a one-page weekly scorecard with a handful of numbers:

• Cash in the bank at the end of the week.
• Money that came in and money that went out.
• Money customers owe you, and how much of it is more than 30 or 60 days old.
• Bills coming due in the next two weeks, including payroll and your loan payment.
• Work sold or booked and work completed.

Look at it every week, same day, same order. After a dozen weeks you'll know what normal looks like, and that's how you'll spot trouble early. Compare each month with the same month last year rather than the month before: many companies, especially in Florida, have strong and slow seasons, and a quiet September may be perfectly normal.

Have your bookkeeper or accountant close the books each month, too: finish recording the month's income and costs and produce the statements. That keeps your weekly view in line with the real statements.

Protect the cash

The loan payment is due every month, good month or bad. A rough way to size it: with a 10-year SBA loan at about 10.25% interest, every dollar borrowed costs about 16 cents a year. Say you borrowed $900,000. That's about $144,000 a year, or about $12,000 a month, before you pay yourself.

In the first 90 days:

• Don't add fixed costs you can avoid: a new truck, a new hire for a role that didn't exist, a bigger office.
• Collect what you're owed. Call slow-paying customers politely. An owner who was winding down may have let some of them drift.
• Pay yourself what you planned, not more, even after a strong month.
• Keep the reserve you set aside for surprises. Equipment breaks, a big customer pays late, the slow season arrives. That's what the reserve is for, not improvements.

Quick wins that don't break anything

You'll want to show people that a new owner means good things. Pick improvements that help people without changing how the work is done:

• Fix the broken tool, the unreliable van or the slow computer that employees mentioned in your one-on-ones. Fixing something they asked for tells them you listened.
• Return calls faster. If the phone sometimes goes unanswered, find out why and fix it.
• Pay suppliers on time, every time.
• Clean up the shop, the office or the storefront.
• Thank people, specifically and often: employees for good work, customers for their loyalty.

At day 90: take stock

At the end of three months, sit down with your "later" list, your notes from those first conversations and twelve weeks of scorecards. Cross off the ideas that no longer make sense. Rank the rest by how much they'd help and how much they could disrupt. Talk with your key employees about the next few changes before you make them.

For a second opinion along the way, try a Small Business Development Center. These centers, funded in part by the SBA, offer no-cost, confidential advice to business owners. In Florida they're run through the Florida SBDC Network, led by the University of West Florida, with offices around the state.

You'll still be learning at day 90, but you'll be learning as the person who runs the place, with a team that has seen you listen first. That's a good place to start making changes from.