Thursday, May 24 , 2018, 6:59 am | Overcast 58º


Paul Burri: Mistakes I Made, and What Not to Do

Learn from me a few key lessons on buying a business

I sold my business in 2007. I made a few mistakes when I did. One of them was to ignore some good advice; another was to make certain assumptions that eventually turned out to be wrong. The process of selling the business took about 2½ years from the time I got serious about it. The final negotiations between the eventual buyer and me took about nine months.

As we got closer to the final negotiations, a friend of mine who is experienced in matters of mergers, acquisitions, takeovers and sales of businesses warned me — although perhaps not forcefully enough — that the new owners of a business never want any advice or input from the seller.

I found that advice hard to believe, so I didn’t. (There’s a life lesson in there somewhere.)

To this day I find it difficult to believe that when someone takes over a successful, growing business they won’t want to get as much advice from the seller as possible. Why is this business so successful? What mistakes did you make along the way that I should avoid? What advice do you have for me? What do I need to do to continue the company’s success? Will you continue to be around for advice when I need it?

In my case, a part of the sale agreement was that after the final transfer I would devote three to four weeks at the business full time, then several weeks part time and then a few months on an occasional basis. (Don’t quote me on the exact details, but it was something like that.)

I will admit that a week after the new owner took over, he did one day ask me, “What do I need to do to grow the company?” I will also admit that my answer may have sounded flippant to him when I said, “Keep doing what I’ve been doing.” I did not mean — although he may have taken it to mean it — that I was not willing to teach him everything I knew about the business. No matter, about five days later he came to me and said, “I don’t think you need to come in anymore.”

So after less than two weeks, the new owner felt he knew everything there was to know about a business that had taken me about 17 years to build. In my mind that’s chutzpidity — somewhere between chutzpah and stupidity. Were the situation reversed, I would have been trying my best to squeeze every drop of information from the former owner of the business I had just bought.

So my main mistake was to make certain assumptions. (You know what they say about assume. There’s an ass associated with u and me.) I assumed that my advice and support would be welcomed. I assumed that the business would continue to grow as it had been under my direction. I assumed that the mistakes I had made along the way would not be repeated. I was wrong.

The lessons to be learned here?

» Don’t ever assume anything.

» Listen to good advice. (But how do you tell?)

» If you buy a business or take over an ongoing operation, make no changes until you understand the reasons why things are done the way they are. (There are often just as many reasons why they need to be changed, but spending time learning about the status quo will be well spent and not much time or money will be lost in the discovery process.) When you find a better way to do something, try it out, test it, and then if it’s really an improvement, implement it.

— Paul Burri is an entrepreneur, inventor, columnist, engineer, guerrilla marketer and iconoclast. He is available to local organizations for speaking engagements and to local businesses for business consulting and/or mentoring. The opinions and comments in this column are his alone and do not reflect the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address). Click here for previous Paul Burri columns. Follow Paul Burri on Twitter: @BronxPaul.

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