Key Activities for the Searcher in the First 100 Days of Operations After Acquisition

The first 100 days after acquiring a business are crucial for setting the tone and establishing a foundation for long-term success. This period offers a unique window for building relationships, assessing the company’s operations, and implementing early wins that can generate momentum. For a search fund operator, the transition from dealmaker to operator is significant, and it’s essential to approach this period with a well-structured plan. Below are the key activities a searcher should focus on during the first 100 days of operations.

1. Build Relationships and Gain Trust

One of the most critical aspects of the first 100 days is building relationships with key stakeholders—employees, customers, suppliers, and the broader business community. As the new owner, your success depends on gaining the trust and support of these groups.

• Employees: Your team is the lifeblood of the company. Meet with key managers and team members to understand their roles, concerns, and ideas. Building rapport with employees helps alleviate uncertainty and anxiety about the new ownership.

  • Best Practices:

    • Hold individual meetings with department heads and key employees.

    • Communicate openly about your vision for the company and any planned changes.

    • Reassure employees that their jobs and contributions are valued.

• Customers: Maintaining strong customer relationships is critical to the continuity of the business. Reach out to key customers early to introduce yourself, understand their expectations, and ensure they are satisfied with the company's service.

  • Best Practices:

    • Schedule introductory meetings or calls with the top 10-20 customers.

    • Listen carefully to their feedback on how the company can improve its offerings or service.

    • Ensure them that your focus is on maintaining or improving service quality.

• Suppliers and Partners: Maintaining smooth supply chain operations is vital. Meet with suppliers and partners to reassure them that you are committed to maintaining strong relationships and honoring existing agreements.

  • Best Practices:

    • Review all contracts with key suppliers to understand terms and renegotiate if necessary.

    • Discuss opportunities for improving efficiency, pricing, or terms.

2. Understand the Business’s Financial Health

While financial due diligence is completed before closing the deal, the first 100 days give you the chance to dive deeper into the business’s financials and get a clearer picture of its day-to-day cash flows, expenses, and revenue drivers.

• Cash Flow Management: Ensure you have a clear understanding of the business’s cash flow cycles, liquidity, and working capital needs. This is crucial for keeping operations running smoothly during the transition.

  • Best Practices:

    • Implement a detailed cash flow forecast for the next 6-12 months.

    • Monitor cash balances closely to ensure there’s enough liquidity to cover short-term obligations.

• Cost Structure: Review the cost structure of the business to identify areas where cost-saving opportunities might exist without disrupting operations.

  • Best Practices:

    • Conduct a line-by-line analysis of expenses to identify unnecessary or excessive costs.

    • Look for immediate savings in non-essential areas but avoid drastic cost-cutting that could damage the business.

• Profitability Analysis: Analyze the profitability of different products, services, and customer segments to identify where the business is earning its highest returns.

  • Best Practices:

    • Break down margins by product line and customer to identify potential areas for improvement.

    • Consider reallocating resources to higher-margin areas for immediate gains.

3. Assess and Streamline Operations

A major focus of the first 100 days should be on assessing and improving operational efficiency. Your ability to identify operational bottlenecks and implement quick improvements will set the tone for long-term growth.

• Operational Workflow: Conduct a thorough review of the company’s processes, supply chains, and production workflows. The goal is to identify inefficiencies and areas for improvement, such as reducing lead times or streamlining product delivery.

  • Best Practices:

    • Map out the company’s end-to-end processes from production to delivery.

    • Identify any operational bottlenecks that slow down production or service delivery.

• Technology Review: Assess the company’s current technology systems, including its CRM, ERP, and financial management software. Outdated or inefficient systems may hinder productivity and limit scalability.

  • Best Practices:

    • Review current technology systems for gaps or inefficiencies.

    • Plan for potential upgrades that can automate processes and improve data visibility.

• Quick Wins in Operations: Look for quick wins—small, impactful improvements you can make in the first 100 days. These early wins will demonstrate your leadership and start generating momentum within the organization.

  • Best Practices:

    • Focus on low-cost, high-impact changes, such as improving workflow efficiency or eliminating redundant processes.

    • Celebrate and communicate these wins to the team to build morale.

4. Evaluate the Team and Organizational Structure

The first 100 days are also a critical time to evaluate the existing team and organizational structure. Your goal is to ensure that the company has the right people in place to support its growth and operations moving forward.

• Key Employees: Evaluate the performance and fit of key employees, particularly in leadership and management roles. Identify who is aligned with your vision and capable of driving the business forward.

  • Best Practices:

    • Assess the leadership team’s strengths and weaknesses.

    • Consider whether additional skills or leadership changes are needed to meet long-term goals.

• Roles and Responsibilities: Analyze whether the current organizational structure is functioning effectively, or if there are overlaps, gaps, or inefficiencies in roles and responsibilities.

  • Best Practices:

    • Create a clear organizational chart outlining roles and responsibilities.

    • If necessary, realign roles or redistribute tasks to optimize efficiency.

• Employee Engagement: Focus on employee engagement and morale. Your goal is to foster a positive work culture that motivates the team and aligns them with your vision for the future.

  • Best Practices:

    • Hold regular team meetings to provide updates and share your vision for the business.

    • Establish an open-door policy to encourage employees to share their ideas and concerns.

5. Develop a Strategic Plan

During the first 100 days, it’s important to develop a strategic plan that outlines your vision for the business and establishes short-term and long-term goals. This plan should build on the information gathered during due diligence and the early days of ownership.

• Vision and Goals: Define your vision for the company’s future, including specific growth targets, new markets, or product expansions.

  • Best Practices:

    • Set clear, measurable objectives for the next 12-24 months.

    • Break down these objectives into actionable steps that can be communicated to the team.

• Growth Strategy: Evaluate opportunities for growth, including expanding customer segments, geographic expansion, or new product development.

  • Best Practices:

    • Analyze existing customer data to identify cross-sell or upsell opportunities.

    • Research potential new markets or customer segments to explore expansion.

• Innovation and Differentiation: Assess how the company can innovate or differentiate itself from competitors. This could involve introducing new products, upgrading technology, or improving customer service.

  • Best Practices:

    • Engage employees in brainstorming sessions to generate innovative ideas.

    • Regularly monitor competitors and industry trends to stay ahead of the curve.

6. Strengthen the Company’s Culture

As the new owner, it’s important to quickly establish a positive culture that aligns with your values and vision. Culture can be a key driver of employee engagement, productivity, and customer satisfaction.

• Cultural Assessment: Understand the existing company culture and identify areas that need improvement or realignment.

  • Best Practices:

    • Gather feedback from employees about the company’s culture, leadership, and work environment.

    • Identify areas where the company’s culture can be strengthened, such as improving collaboration or recognition programs.

• Lead by Example: Demonstrate the values and behaviors you want to instill in the company. Your leadership style will set the tone for the culture moving forward.

  • Best Practices:

    • Be visible and accessible to employees.

    • Communicate your vision regularly and show commitment to the company’s mission.

7. Monitor and Adjust

The first 100 days is not just about making immediate changes but also about monitoring the impact of those changes and adjusting as necessary. This period is about setting the foundation, but not all strategies or initiatives will work perfectly the first time.

• Regular Check-ins: Schedule regular reviews and check-ins with your leadership team to assess progress on key initiatives, identify roadblocks, and make necessary adjustments.

  • Best Practices:

    • Track key performance indicators (KPIs) for operations, financials, and employee engagement.

    • Adjust strategies based on performance data and feedback from the team.

Conclusion

The first 100 days after acquiring a business are critical for establishing your leadership, building relationships, and laying the groundwork for future growth. Focus on building trust with key stakeholders, gaining a clear understanding of the company’s financial and operational health, and implementing early wins to create momentum. By carefully evaluating the team, streamlining operations, and developing a strategic vision, you can position the business for long-term success and make a lasting impact as the new owner.