Share This Info:  

How Does A Company's Culture Effect The Sale Of A Small Business?

Share This Page   •   See All Discussions   •   See All Contributors   •   All New Discussions & Comments

Comments & Replies: 4     Views: 3428     Posted By: Peter Siegel MBA  

When purchasing a small to mid-szied business, there are a multitude of things to evaluate. One area that is often overlooked is the business's culture. Peter Siegel, MBA with BizBen discusses with potential buyers the importance of understanding how the business runs on a day-to-day basis.

Topics: Buying A Business, Selling A Business     Tags: buying a business, selling a business



Before purchasing a small to mid-sized business, you must perform a thorough examination of that company during the due diligence process. Reviewing financials, valuing assets, and inspecting equipment, are all necessary and important matters to focus on, but there are other areas of concentration that don't receive enough attention on the front end of a business deal. One of these factors that is often neglected is the company's culture.

Company culture is primarily focused on the business's employees, from the overall attitude of these employees, to the morale and comradery of the group as a whole. You will want to learn as much about the workforce as possible, because these are the very people that will be contributing to the success of your business on a daily basis. How do these people feel about the job they do? What motivates them to come to work everyday and put their best foot forward? After you identify these things that will help you become an effective leader, you will want to figure out how the company is structured and how work is best completed.

Understanding the core values and structure of the business will help you understand what day-to-day operations look like and where the bulk of decisions are made. For example, does the business value their employees' independent creative processes and allow them to make their own decisions, or is their a hierarchy where the orders are handed down from management for the employees to follow? To learn the most about company culture, you could briefly interview employees that are in supervisory or managerial roles. Obviously, you won't have time to interview everyone, but it would pay off to gain different perspectives on how the business operates, to ensure that you are inheriting a healthy work culture that you can maintain.

The thought of inheriting a mess is enough to scare the majority of buyers out of purchasing a new business. If the company's culture is effecting the production of the business in a negative way, you must identify the main causes and determine if you are readily capable of fixing them. Would inheriting a workforce with no motivation and zero comradery be too risky, or does this give you the ability to start new and clear out the problems at the very beginning? Buying a business is filled with risks, but having a game plan and clear vision for your new business makes it much easier to overcome these small hurdles, and build a successful business.

Replies To This Comment
I agree, having a positive company culture is not only beneficial to the employees and owner, but also to their customers, because happier employees will stay at the job longer and give better customer service, which later equates to higher sales. An owner can have monthly meetings with their staff to identify goals and work out "wants and concerns". Creating the right company culture should really start with the HR department, and so if a new owner decides to let get of employees and hire new ones, they should really take their time to find someone who will work with others in the company.



I recently met a human resources consultant who enlightened and broadened my perspective about due diligence. She is often called in by buyers to review and advise about not just the ongoing employment of key personnel, but also to assess the culture and atmosphere of a business in a professional, dispassionate, objective way. It makes great sense, since so much of business success depends on the people and their ability to work effectively and efficiently as a team, both internally and externally. So, for anyone purchasing a business with more than a few employees, I highly recommend investing in an HR specialist to do some investigation of the business during due diligence.

Contributor: Broker/Consultant: Elderly Care Services

Understanding "company culture" is imperative in the Elderly Care Home field.

Just imagine the mix of personalities at a care home; you've got Elderly Clients, Hospice Nurses, Care Givers, Dishwashers, Doctors, California State Regulators, The Gardener, an Administrator, ... Makes my head hurt just thinking about all the different personalities, and skill sets. But maybe that's the beauty behind the success of an Elderly Care Home, it takes a village to care for our Kids and our Elderly.

My suggestion is to get in as soon as possible and learn as much as possible about all of the Employees, the Care Givers, and Residents prior to taking ownership. Confidence is gained in experience and time on the job. Enjoy.


  Helpful Resources To Assist In Selling And Buying California Businesses

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 800-864-0420.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Brad Steinberg, Broker - Laundromat Specialists

Laundry specialists - founded in 1968 by three laundry professionals, PWS is a family-owned corporation. Through the years it has grown to become the largest vended laundry equipment distributor in the United States. Call Brad Steinberg at 323-721-8832 to sell or buy a coin or card laundromat.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews

Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 866-270-6278 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

I am Buying A Business: Should I Buy The Property As Well? A Good Decision?

There are advantages and disadvantages to owning commercial property. Here are a few questions to ask when it comes to deciding whether or not to buy the property along with the business. Peter Siegel, MBA with the BizBen ProSell Program reviews this issue with potential sellers and intermediaries.

Selling My Small Business: What Items Should I Have Ready To Be Successful?

When selling a small to mid-sized business, owners should have their paperwork and financial information ready to go! They should also have a short business plan of past history, current operations, and potential for the future. In this BizBen Discussion several advisors and intermediaries weigh in.

How Many Months Should I List My Business With A Business Broker?

It's important to remember that selling a business takes time. Unlike selling a house, which can be sold relatively fast, a business can take up to six months to a year to sell. Joe Ranieri (Orange County Business Broker) at 714-292-5448 explores this topic from a Business Brokers perspective.

Selling A Business Without Getting Sued: 5 Tips For Business Sellers/Brokers

How do I sell my business without getting sued, isn't a subject just for discussions with lawyers. A seller can take some precautions to reduce potential legal problems. Peter Siegel, MBA Founder Of BizBen and BizBen's ProSell Program discusses this topic for business owners/sellers and brokers.

4 Reasons Why Business Brokers Do Not Cooperate With Other Brokers & Agents

Despite challenges in the business for sale marketplace, some of the business brokers who make a living by facilitating a deal between buyer and seller are known to stand in the way of a completed transaction because of some outdated ideas. Too bad they put greed ahead of the needs of their clients.

Absentee Run Small Businesses - Is That Really A Possibility For Buyers?

Is buying a absentee run small business really a possibility? Peter Siegel (BizBen ProBuy Director) gets asked this question a lot in his consulting sessions with business buyers. Read more about what other Advisors and Intermediaries feel about this topic on this popular BizBen Discussion!

What Should I Do If Other Buyers Are Trying To Buy The Same Business As Me?

Buying a small business is hard enough when there is no competition, so how might a buyer navigate the process when there is additional competition from other buyers? Potential small business buyers are offered a few key ways that a buyer can beat out other potential business buyers in this article.

See All News, Tips And Events

Adam Orhun Business Broker
Michael Brewer, ABC License Consultant
Bob Hughes Business Broker Riverside County San Diego
Prabhjot Randhawa Business Broker SF Bay Area







Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million




BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2017, All Rights Reserved

                 
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Buyer Beware: Does A Company's Culture Effect The Sale Of A Small Busine...
Selling A Business Without Getting Sued: 5 Tips For Business Sellers/Bro...