The first 100 days after you buy

The first 100 days start during diligence. By the time you complete (close, in the US), you should have:

• a written handover plan agreed with the seller, listing the relationships, tasks and knowledge to transfer, with dates, and the seller's hours and availability set out in the purchase agreement or a separate consultancy agreement
• an announcement plan: who hears first, from whom, what they are told and when
• the list of findings from diligence, each with a person responsible and a deadline
• bank accounts, card payments, payroll and insurance ready to run from the first day
• a note of every deadline in the purchase agreement, such as the timetable for completion accounts, earn-out reporting dates and time limits for warranty claims

The handover and the first 30 days checklist covers the practical detail.

On the day of completion, make sure you control everything the business needs to trade.

• Control of the money: new signatories on the company's bank accounts if you bought shares, or customer payments redirected to your own accounts if you bought assets, with the seller's access removed or limited as agreed
• Administrator access to email, domains, hosting, the website, accounting software, payment processors, advertising accounts and marketplace seller accounts, with passwords changed and two-factor authentication set up
• Payroll ready for the next pay date
• Insurance in force in the right name
• Keys, alarm codes and access to premises and vehicles
• Supplier accounts and credit terms moved across where they need to be

Domains and accounts registered in the seller's personal name are easy to overlook and hard to recover later. If diligence found any, move them on the first day. See domains or accounts held in personal names.

How a change of owner is announced shapes how people respond to it.

Staff first

Staff should hear from you and the seller together, and before anyone outside the business if you can manage it. Tell them who you are, why you bought the business, what is not changing and when they will hear more. Most people want to know whether their job, their pay and their manager are safe. If nothing is changing, say so plainly. If something is, do not hide it.

Follow up with one-to-one conversations with the people the business depends on most. Ask what works, what frustrates them and what they would change. Listen more than you speak.

Employee rights on a change of owner vary by country and by deal structure. In the UK, for example, when a business is sold as an asset purchase, TUPE usually moves the employees across to the buyer with their existing terms and conditions, while in a pure share purchase the employer itself does not change. Where TUPE applies, staff or their representatives must be informed, and in some cases consulted, before the transfer happens, so some of these conversations belong before completion. The new employer also cannot change terms simply because of the transfer. Take advice on the rules that apply to you before you plan or announce changes to anyone's terms. The country guides for the United States, the United Kingdom, Australia, Canada and South Africa give a general outline.

Customers

Introduce yourself to the most important customers together with the seller, by phone or in person rather than by letter alone. The message is continuity: the same service, the same people and a named contact. For smaller customers, a short, plain email or letter signed by both of you usually works. Do not announce price rises or new terms in the same message.

Suppliers

Contact key suppliers early. Confirm that terms, credit limits and delivery arrangements continue, and move accounts into the right name where needed. A supplier that is nervous about a new owner may shorten its credit terms, which puts pressure on cash just when you need it most.

This is the period for learning how the business actually works, as opposed to how it was described to you.

• Spend time in each role. Work alongside staff, answer the phones, pack orders, go out on a job.
• Rebuild the owner's calendar. Ask the seller to walk you through a typical month: the calls they make, the customers they visit, the reports they read and the jobs only they do.
• Write processes down as you learn them. An undocumented process is a risk while the seller is still around to explain it, and a problem once they have gone. See undocumented processes.
• Read the numbers every week: sales, gross margin, cash and the few measures that matter most for this particular business.
• Keep a list of ideas, and do not act on most of them yet.

Make only the changes that reduce risk or fix something clearly broken, such as a lapsed insurance policy, a security gap or a supplier account in the wrong name. Larger changes can wait until you understand what they might disturb.

The seller's knowledge is worth most in the early weeks and loses value quickly after that. Use it deliberately.

Turn the handover plan into a schedule of introductions and tasks, each with a date. A useful pattern for each responsibility is for the seller to do it while you watch, then for you to do it while the seller watches, and then for you to do it alone. Keep a record of what has been handed over and what has not.

Take a fictional example. Cobalt Kitchen Services, an Australian commercial kitchen maintenance business, is bought from a founder who personally looks after its ten largest customers. The buyer and the founder list those customers and plan two joint visits to each over eight weeks. By week ten the buyer leads every visit, and the founder takes calls only when a customer asks for them. When one customer worth A$200,000 a year hesitates over renewing, the founder is still available to reassure them, because the transition period was written to last long enough.

Watch the incentives. A seller who is owed seller finance or an earn-out has a reason to help the business succeed. An earn-out can also cause friction if you change things that affect how it is measured, such as pricing, cost allocation or the product range. Talk through any change that touches the earn-out before you make it, and keep a written record of what was agreed.

Agree in advance what happens if the arrangement is not working. Staff and customers can find it confusing to see two people in charge for too long. The purchase agreement should already set out the seller's time commitment and their restrictions on competing with the business or approaching its staff and customers.

When a newly bought business struggles, it is usually cash that runs short first, not profit.

• Keep a weekly cash forecast looking at least three months ahead, covering receipts, payroll, supplier payments, rent, tax and loan repayments.
• If you bought assets rather than shares, you probably started without any money owed by customers. Expect a gap before their payments catch up with your costs. Working capital, inventory and what the price includes explains why.
• Put the working capital adjustment and the completion accounts timetable in your diary and prepare for them. The adjustment can move money in either direction.
• Know your lender's reporting requirements and covenants, and meet them on time from the first month.
• Watch how quickly customers pay (debtor days in the UK, days sales outstanding in the US). Customers who need to update bank details or supplier records may pay late for a cycle or two.

Diligence gave you a list of weaknesses. Some you priced in and some you accepted as fixable. The first 100 days are the time to start on them, while the seller is still available and the change of owner gives you a natural reason to reset how things are done.

• Owner dependence: move relationships, licences and know-how from the seller to you or your team. See the owner does the selling or holds key relationships and Owner dependence and how to test it.
• Customer concentration: build relationships with more than one contact at each large customer, and start work on winning new ones. See Customer concentration and why buyers discount for it.
• Key staff: agree arrangements that give the people the business cannot afford to lose a reason to stay, and plan cover for their roles. See key staff not tied in.
• Contracts needing consent: chase any consents that were left until after completion. See contracts that end on a change of control.
• Supplier concentration: open a conversation with an alternative supplier, even if you do not plan to switch. See supplier or single-source manufacturing concentration.
• Intellectual property and accounts: complete any assignments and registrations still outstanding.

By now you should understand the business well enough to start changing it carefully.

Begin with changes that carry little risk and that staff will notice: fixing a tool that slows everyone down, making clear who decides what, or spending money on something the seller put off. These build trust. Leave changes to pricing, the product range, key suppliers or the shape of the team until you can judge how customers and staff are likely to respond.

Before day 100, write a plan for the rest of the first year. Keep it short: a handful of priorities, the measures you will track each month, the budget and who is responsible for what. Share the parts that affect staff, and explain the reasons behind them.

• Changing too much too soon, before you understand why things are done the way they are.
• Cutting costs that were quietly holding up revenue, such as a long-serving account manager or a supplier that delivers at short notice.
• Letting the seller's customer relationships lapse because the handover was left to chance.
• Losing a key person because nobody asked what they needed to stay.
• Running short of cash because the forecast assumed every customer would pay on time.
• Missing a deadline in the purchase agreement, such as the window to challenge completion accounts or to make a warranty claim.

Each of these is avoidable with a plan made before completion and followed through in the weeks after it.