When you’re a small-business owner or founder of a startup, there’s a good chance that somewhere in the back of your mind, you’ve imagined what it would be like to grow your company to the point where it’s bought out in an acquisition. For many business owners, the prospect of being acquired is one that’s filled with excitement, big plans and high hopes.
After building a business, you feel excitement for the next chapter—and, obviously, the payout. But there’s also a sense of loss because your business is a part of your life, and you also feel a sense of responsibility to your team to ensure job security and a smooth transition.
In this issue of Promotional Consultant Today, we pass along these tips that Brenton Hayden, chairman of the board for Renter’s Warehouse, shared in his Entrepreneur magazine feature, “Your Company Was Acquired. Now What?”, which is based on his experience with the acquisition of his own business.
1. Expect your role to change. If you’ve decided to stay on with the company, or if the contract stipulates that you’ll be on for a specific period of time, expect your role to change. You’ll be reporting to someone now instead of the other way around. As an entrepreneur, it can be extremely difficult to adjust to this new dynamic. Hayden says that he realized an acquisition was the right thing for him and his business partner, and this put things into perspective. It was important to him that, in the future control structure, he would remain independent, so he left with an independent contractor agreement. Lesson learned: decide how open you are to having a boss and how you need to structure your deal.
2. Don’t play favorites. Set the tone with your current team by welcoming the new team; don’t play favorites. You know your current team is talented or you wouldn’t be attractive to other organizations, but allow the newly inherited team to show their capabilities as well. Lesson learned: the faster you merge cultures and talent, the faster you can get back to work at making money.
3. Adjust to a new company culture. Speaking of meshing cultures, this is often the most difficult part of the transition. Startups are more nimble, with fewer processes and people who wear multiple hats and have multiple talents. Large companies require layers of approvals and have more people with more specific job responsibilities. And if it’s a public company, the rules of business are much more regulated based on Wall Street and shareholder value. Try to do everything you can to help the culture transition to be as smooth as possible. It’s important to recognize that this change is normal, and to work closely with your team and the higher-ups, maintaining open lines of communication and helping to manage expectations.
4. Remind yourself why you’re doing this. As some point, remorse may set in. Was this the right partner? Did I leave money on the table? Was now the right time? Remember, you will almost never get the amount of money you had hoped and the perfect partner at the perfect time. Hayden says to remember that you made the best decisions with the information available at the time and to move forward from there.
5. Trust your team. You are not in this alone. You got to this level of success because of your team. Now is the time to have confidence in them to be professional and top-performing in the transition process as well. Listen to them, support them and guide them into accepting the new culture, but also know when to step back, take a more low-key role but still be influential. Also, trust that your new partners have your team’s best interests in mind.
Source: Brenton Hayden is the founder and chairman of the board of Renters Warehouse. A graduate of Harvard Business School and MIT Sloan School of Business, Hayden leads a team of more than 140 employees and franchises in 21 states with a portfolio of managed properties valued at just under $1 billion.