Transitioning a Business (The Pizza Pub Takeover)

I’ve personally had a couple of easy transitions in my business buying and selling adventures so far, but I’ve also had some real challenges. Some were more emotional than others. The Pizza Pub? It was downright comical, at least looking back on it. At the time, disaster would have been closer to the truth.

The three of us drove to the bar for the first time after closing the deal. Mark, Lacey, and I were cleaning and investigating and mostly poking around. At some point, we split up to run errands, buy supplies and such. As Lacey and I returned to the bar, I got that slightly panicky feeling in my gut. “Oh no! I have the keys, but I wrote down the security code and left my notebook inside the bar. We’re not going to be able to get in.”

And just like she was in charge anyway, Lacey replied back to me, “It’s okay Mom. I wrote down the security code too, but I have my notebook with me.”

My 10-year-old to the rescue!

I may as well tell you this story too, because I’m a huge proponent of involving your kids in your business life. Lacey skipped school that first day we had the bar. She was a big Julia Childs fan and still loves to cook. She wanted to be there when we learned to make the soups, the chili and the clam chowder. There’s way more to education than sitting in a classroom and I was always looking for a reason for the kids to skip school. What better excuse than buying a business, right? Anyhow, when Lacey went back the next day, back to our hard core Christian elementary school, her teacher approaches her and says, “Lacey, I’m so glad you’re feeling better today!”

With what I’m sure was a confused look on her face, Lacey says, “Uhhh, I’m not sick.”

“Then why did you miss school yesterday?”, Mrs. Shaffer asks.

“Ohhh,” Lacey replies enthusiastically, “My mom bought a bar!”

“Surely you’re not going to be working there?”

“Well, we are planning to add a family room at some point.” Lacey answered. Not sure what all was going through Mrs. Shaffer’s mind at that point, but I’m so glad Lacey has been a part of these memories.

Enough with the mom stories! Back to our regularly scheduled program and the harsh realities of business transition.

The first day after we bought the pizza pub, Jeanne showed us how to make the soups, and went over the other recipes. She gave us the grand tour and she showed me how to run the monthly receipts on the old-fashioned cash register. She was pretty much gone after that. Two hours later were off and running, selling sausage rolls and Crown and Cokes. At the end of the night, I started to close out the register and realized I only knew how to do the monthly report. What the heck was I supposed to do at the end of every night?

The kitchen staff stayed with the ownership transfer, plus we brought back a guy that had been unjustly fired, but the couple of servers did not. I think they were mostly friends of the previous owner, part time help. At least we knew this going in. We hired a friend’s daughter that had a lot of server experience. We interviewed her at a Panera before we closed on the business. Then we hired a couple of her friends. I don’t think we ever interviewed them. We just needed bodies to get us started. Their orientation was as follows:

• You know how to wait tables, right?

• You can read this menu, right?

• Here’s your order pad. Did you bring a pen?

• Oh wait, table numbers? Let’s start in this corner and count around to here.

NOT KIDDING!

That is really the way it went, but I had tons of experience and felt pretty comfortable winging it. The back of the house was a different story. Every day we were at Gordon’s Food Supply store.

Every. Friggin. Day.

And not just every day, buy multiple times a day. We had no idea what we had in the cooler or how much of it we needed, so every time a cook hollered about being out of something, off we went. Okay, off Mark went. Someone had to stay and pour drinks. Speaking of drinks…

I went into the cooler and made a list of all the beers, but I had no idea where they came from, who supplied what. I took that list and called the first beer rep. “Hey, I have the list of beers we carry. Can I read that list to you, and you tell me which ones we get from you?”

I think I did that same call three times just for beer. Then three or four more times for the liquor. Then there were the food items. I ended up making a 13-page spreadsheet with all our inventory items organized by vendor. I figured out, okay guessed, all the par levels, the amounts of each item we needed to have on hand at the beginning of the week.

At the end of each shift, the team member would ask Mark when their next shift was. His usual response was something like “Can you come back tomorrow?” I figured out everyone’s availability and made set schedules based on the number of hours they wanted to work. None of this was addressed in our “transition plan”, cuz, obviously, we didn’t have one.

Shame on us! I won’t buy another business without a clear plan of how we’re taking over and what I can expect from the seller.

Whether you’re buying a business or selling a business, the transition needs to be planned out with as much care and thought as the deal itself. The deal is sexy and fun and gets all the attention. It’s exciting to figure out how much you’re selling for, what a great deal you’re getting, amortization schedules, interest rates, balloon payments, ooh la la!

But the transition can make or break the business, no matter what wonderful terms you were able to negotiate. The transition must be planned out ahead of time, negotiated along with the deal. Don’t leave it as an afterthought.

Depending on which side of the table you’re sitting on, you should begin by asking yourself three questions.

As a seller:

1. What do I insist on doing? (Super important for relationship-based businesses especially.)

2. What am I willing to do? (To help my buyer.)

3. What do I refuse to do? (Tasks the new owner must take over immediately.)

As the buyer, you should be thinking along the same lines.

1. What must the seller teach you to be successful?

2. What are you hoping the seller will continue to do?

3. What do you need the seller to stop doing immediately?

This is just the starting point, the brainstorming session. The details will depend on many factors including your experience, skills, circumstances. Whatever you do, don’t leave the transition to unfold in a willy-nilly fashion. Multiply your chances of success with a thoughtful transition plan negotiated and agreed upon by all parties.

If you have business transition questions, hit reply and ask away😊

Let the adventures begin!