No sales day 1. How could this happen? I did the research, hired the right people to help with diligence, covered myself with contingencies, and did everything else you are supposed to do before buying a business. Where the hell did all the sales go? Yesterday’s sales were maintaining like they always do, I close and nothing? Holy Sh*t. What did I do.
Imagine for a second that is what happened to you after you spent your life savings on a business. Even as I write this, I shudder.
This is the fear that every inexperienced small internet business entrepreneur has when they buy their business. Scratch that, this is the fear that every small business entrepreneur has. You buy something and the next day its worth nothing. The traffic dries up, conversion tanks, your server gets hacked, the internet disappears. This is what you think is going to happen.
This blog post isn’t about theoretical transitions, it’s about what really happens when you take over a business. Maybe not for everyone, but it’s my story.
What happens when you buy a business
Monday – Thursday the week of the close:
Two words. Paperwork and phone calls. I spent most of the week and the week before on the phone with my 30 vendors. Transitioning accounts, getting them my credit card, intro calls, and filling out account transition forms. I can’t believe how much paperwork there is. Wasn’t I supposed to sign the contract and just wait until the close? I thought I was buying an internet business, what gives?
Then there were the banks.
- Monday: Please draw down the loan and fix it to X%. “No problem Matt. It will be in your account on Tuesday.”
- Tuesday: “Not sure why it isn’t there, let me see whats going on.” Three phone calls later. “It seems that the new automated process isn’t working. It should be in your account on Wed.”
- Wednesday: No money. “Yeah, it really is messed up and we are trying to unwind this for a few clients. Let me get back to you.” 11am. No money. 12pm. No money. At this point, I am in a bit of trouble since I need a wire to go out today to my lawyer for a Friday Close. 12:30 pm. “We fixed it, it will be in your account in 20 min”. 12:50 pm. No money. 1pm MONEY! I go to the bank and wire the cash to my lawyer.
- Monday: “Here is the list of items we need to close. Do this and you are good.” I knock it out by Tuesday pm.
- Wednesday: “The bank overlords need X”. Here you go. “The bank overlords need Y”. Here you go. “The bank overlords need Z”. Here you go.
- Thursday: I land in Minneapolis and head to hotel. “The bank overlords need confirmation of the wire to your lawyer. They need the actual document”. Uhh…. I just landed in another state but I happen to bring it with my by some luck. Whew….crisis averted
I wrote about the night before my close in my other blog post. So you can read about how I felt. Basically I watched some TV, talked to my wife-to-be, got some advice from a mentor/ friend and went to bed.
The day of the close
I wake up at 6am. We aren’t meeting until 8 but I really can’t sleep since I am so excited. This is the day I have been working towards for six months! All the hard work, research, and perseverance has paid off. I watch some tv, do some work, and grab some breakfast downstairs. Around 7:50 I head outside and am greeted with this.
What the hell is that? Am I in the Arctic? After my car stopped crying while trying to start, I punch the address in the GPS and head over to the seller’s house. 10 minutes later I am at his door, we exchange pleasantries, and get to work.
For some reason when I was going through the process I imagined the day of to be a bit more dramatic than how it was. Instead of some high TV drama, it was two guys going through a checklist, drinking some water and talking shop. Truthfully, it was pleasant. After about 2.5 / 3 hours, we were done. Why so long? We probably could have knocked it out in less time but were talking along the way having some great conversation. Around 11am we were done….or so I thought.
I call my lawyer and tell him to wire the half of the money that he has. Done.
I call bank #2 and tell them to wire the other half. “We need confirmation that the lawyer sent his half before we send ours”. “We need the confirmation in writing” “We need the seller to confirm the amounts” “We need the seller to confirm X” and on and on and on. The seller and I are shaking our heads and laughing. You can’t make this stuff up. If he hadn’t been listening to the call, I don’t think he would have believed me.
“So what happens if I don’t get the rest of the money today?” Hmmmm…… I have no idea. I don’t own the business and you have half your cash. This might be a bit of a problem. Let’s hope the bank is finally happy. If the wire isn’t sent by 2pm, we can worry about it.
For those that don’t know, 2pm is the cutoff time for a wire to hit someone else’s account the same day.
1:55 pm: (Not exaggerating) “Hi Matt, the wire was sent”
2:15 pm: Wire receipt is confirmed.
Woohoo! I own a business.
I know this post dragged on but it was intentional. I wanted to give you a sense of how the day went. Smooth between he and I, bumpy with getting the cash out of the bank. As my entrepreneur friend said to me. “Yup, sounds about right”
The Day After
It was Saturday around 9am when I met the seller to begin training. Day 1 was 12 hours (+ another 3 at the hotel). Day 2, 3, & 4, has been more of the same. I would like to say it has been work but it hasn’t. I feel like a kid in a candy store. I love what I am doing and its a familiar feeling. I am operating again. I am out of the theoretical and into the practical. 100 mph towards executing a strategic plan. The road is not going to be easy but this is home.
What about the sales? Did they tank the day after I bought the business? Of course not.
Thankfully everything is going according to plan. I just hope I don’t screw it up.