This blog is the third installment of my insights and take-aways from a course called Inspiring Entrepreneurial Strategy I recently completed at Harvard Business School.
One case study followed the process that Jim Sharp, an upper-level corporate guy, endured to buy a business, onboard himself, turn it around, and eventually sell it. Since I am a former business broker, I loved this case, as it was fun to both observe and participate.
The case described the experience and parameters of Jim, the proposed buyer, and what he was looking for. He outlined the size, owner financing necessity, and his requirement to not bring in any outside partners (except for a bank). It also included Jim’s home pressures: a wife at home with one young child and another on the way. His financial position was acceptable as an employee, yet for buying a business, he was woefully underfunded. He needed to get creative…
The case continued explaining how he found and secured business, as well as detailed the challenges he faced regarding financing. Banks would not talk to him without a deal. Sellers would not talk with him without a letter from the bank. Though it was a chicken-and-the-egg situation, Jim was eventually able to get through it. He ended up purchasing a manufacturing business with some stringent restrictions. He did not talk with any of the employees, suppliers, or customers until the checks had cleared, indicating his ownership of the company.
On the first day as owner of this company, the previous owner called everyone in for a company-wide meeting. The previous owner stood at the front of the room and informed them that he had sold the company, introduced the new owner then exited the building – leaving the Jim standing there with everyone looking at him.
One of the case study questions was along the lines of: What would you say and do during the first 60 days as owner of a company?
Of course, in a room of about 100 business owners, there was no shortage of debate and opinion (which was fun). We discussed financials and inefficiencies, among other things. However, for me, the three biggest take-aways were the following:
- When addressing his new team that day, Jim was incredibly brief; in fact, his speech was under 1.5 minutes. He let everyone know that things would not change right away, thereby alleviating potential fears.
- That first Friday/payday, Jim personally handed out each check and took a picture with every person; this let him connect the name with a face, as he was starting to assess opportunities and challenges within the organization.
- Initially, Jim spent most of his time listening and learning. He was not focused on changing and fixing, but on listening.
Another cool part with this case was that our quirky, fun professor who wore a bow tie and always rode his bike to work was none other than Jim Sharp.
Remember these tips if you are buying or thinking about buying a business. When you start out, keep your discourse to a minimum, ask questions, and learn as much as you can. The good Lord gave us two ears and one mouth on purpose. It often pays to listen twice as much as talking.
Are you a current or soon-to-be business owner who is interested in learning how to keep things short and sweet with your team? We can help with that! Reach out to us today to find out how.