There are many advantages of buying an existing business as compared to starting one from scratch. Apart from the fact that you’ll already have an established customer base, there is also a ready and reliable cash flow as well as knowledgeable staff. Fundnd is an investment company that has been buying businesses and scaling them. Recently, Fundnd acquired AAssist, a virtual assistant company in what has been referred to as the acquisition of the year. I wanted to get a close look into how Fundnd grows companies after acquiring them and this is what I gathered.
Implementing A Change of Systems and Processes
According to Fundnd founder, although you may be eager to make an impact in your business, big moves like buying a company cannot happen overnight. Whenever Fundnd buys a company, the team begins implementing changes in a manner that minimizes disruptions to employees and customers. When a company is bought, there is a possibility that uncertainty will arise for the individuals connected with the business. That’s why the team at Fundnd needs to ensure stability to keep their trust. When they can prove that the changes they want will bring in success, other stakeholders gain confidence that additional changes will create even more success.
If the company being bought is generally healthy, Fundnd does not need to make a lot of changes in the first months of operation. However, if the said business has been struggling, the need to make moves quickly in systems and processes is crucial. The reason is because the personnel in the company that you will keep in the business is watching closely and they are evaluating your ability to pinpoint the issues and make necessary changes.
Involving All Parties Through Transparency
Although change is necessary, it can be difficult for the parties involved. Coupled with the fact that not all people will be happy with the decisions you make, the wisest thing to do is stick to your job and keep everyone on the loop. According to Fundnd, transparency is important and that is why they are up front and honest about any impending changes and how they were arrived at. Since staff and clients tend to be much more accepting of changes when they understand why they are being implemented, Fundnd ensures that transparency across the board is enforced. To achieve this, the company’s leadership have found it helpful to communicate announcements verbally and in writing. This communication includes the plan of the first months in. The plan, however, does not entail the changes the management wants to make in the company. Instead, it focuses on how the company’s leadership will learn about the various divisions of the company. By meeting as many members of the team as possible and gathering important information on what the general feeling about the company is. After this, it is possible to follow through with the plans to make any changes.
Securing the New Business
Every business is different, and a business owner needs to truly understand that establishment before deciding what changes to make. A lot of startups are so focused on scaling their bought business that they postpone implementing basic security programs. Fundnd prioritizes investing in modern security as traditional security strategies can be complicated to execute and costly to procure. This leaves many startups and small companies not able to afford them at the initial levels of business operations. To avoid this, the purchaser needs to meet with every executive and upper level manager in the business. Conducting such meetings in a less formal setting, like a restaurant or a coffee shop helps the team members feel more free to open up to questions.
Any business owner who has the intention of acquiring a business needs to investigate what existing security controls have been implemented already. It doesn’t matter what is the level of the entrepreneur’s background or the amount of due diligence conducted prior to an acquisition. Fundnd says that an entrepreneur cannot truly know the company he/she wants to buy until he or she starts to operate it. Fundnd always conducts a thorough audit upon acquiring a business to identify and address any important gaps, especially if the said company is a startup.