6. Operate & Grow the Business
The Stage in Brief
Ownership starts the moment the money moves. Day one is about communication: employees, customers, and suppliers each hearing the right message from the right person. The first 100 days are about learning the business you now own, holding the seller to written transition commitments, and installing your own cash controls immediately while resisting the urge to change everything else. What separates this from running any other business is the debt schedule. The loan that bought the company is due whether or not the first year goes to plan, which is why the weekly numbers and the working capital matter more now than they ever will again. The years after are about operating it well enough to grow and, eventually, to sell.
Plan the First 100 Days
The post-close transition as a working plan, and what to do when year one goes wrong.
Where the Paths Diverge
- Traditional
- A board to report to, a quarterly rhythm, and support that arrives with oversight attached.
- Self-Funded
- Full control, and a personal guarantee that makes every operating decision your own risk.
- Employed
- You run it inside the firm's structure, with less at stake personally and less of the upside.
Questions to Answer Before Moving On
- What do employees, customers, and suppliers hear on day one, and from whom?
- What will I deliberately not change in year one?
- Are banking and cash controls mine from hour one?
- What exactly does the seller owe me post-close, in writing?
- Which numbers will I look at weekly, and who produces them?
Mistakes That Cost Searchers Months
- Big changes in month one that trigger key departures
- Letting the seller relationship lapse the day after wiring
- Running the old owner's cash habits instead of installing your own
- Deferring the maintenance and the price increases the seller deferred before selling
What the Data Says
Most acquisitions survive their owners' learning curve: across the FY2018-19 change-of-ownership cohort the site publishes (4,809 SBA 7(a) loans, now 7 to 8 years seasoned), 4.20% have charged off, with the spread by industry running from 0.00% to 12.2%.
The horizon pays for patience: IESE's 2024 international study of 320 search funds reports a 2.0x return and an 18.1% IRR, and calls it too early for firm conclusions because 62% of the acquisitions happened since 2020. Returns arrive over years of ownership, not the first hundred days.
Source: IESE Insight, the 2024 international search fund report (September 2024)
The owner's job carries a market price, and the earnings you bought change the day you stop doing it. The median general and operations manager in the United States earns $105,770 a year, which is roughly what comes back out of SDE when the role is hired rather than filled by you.
Source: Manager Wages (BLS OEWS)
The debt schedule in one number: the median change-of-ownership loan of 2025's last quarter, about $775k, at that quarter's 8.86% average rate over the standard ten-year term, costs roughly $9,760 every month before you have paid yourself. It is due whether or not the first year goes to plan.
The Playbook
Script day one before the wire
The transition announcement is a performance with three audiences: employees who fear for their jobs, customers who fear disruption, and suppliers who fear their terms. Write each message during closing week, with the seller's voice endorsing yours, and deliver them within hours of funding; the After the Close templates carry a draft of the employee announcement and the joint customer letter. Silence is the only message that spreads faster than a bad one.
Take the cash controls by sunset
Bank access, payment approvals, payroll authority, and a weekly cash report belong to you from the first day, not because fraud is likely, but because cash is the instrument panel of a business you don't yet understand. Everything else can transition gently; the money may not. The weekly cash report grows into a weekly scorecard, which is the short list of numbers you read every week for as long as you own the business.
Spend ninety days learning on purpose
Run the first rule of any leadership transition: diagnose before prescribing. Ride along with technicians, sit in on sales calls, interview every key employee about what would break if it changed. That is knowledge transfer, and it is the part of the purchase nobody wrote down, so it expires on the seller's last day whether or not you collected it. Keep a list titled 'things I will fix later' and enjoy how many items retire themselves once you understand why they're that way.
Manage the seller like the asset they are
The transition services you bought are the floor; the goodwill is the ceiling. What the seller committed to in writing, the training weeks and the hours they will answer the phone for, is a term of the deal and not a favor. A weekly standing call, genuine deference on customer relationships, and public credit for the handoff keep a seller answering the questions you don't yet know to ask. The alumni owner who speaks well of you is also your best future deal reference.
Bank the early wins that employees feel
Resist strategy for a quarter; fix the parking lot, the broken software, the overdue raise for the underpaid star. Visible, small, employee-centered wins buy the credibility that big changes will eventually spend. Nearly every one of those people works under at-will employment, free to leave as you are free to let them go, and in month one that cuts against you. Nothing holds the crew but the reason they choose to stay, and a new owner has not given them one yet. When you do install your operating cadence (around month four, not week one), it lands on trust instead of fear.
Tools for This Stage
The First 100 Days
Closing day through the transition, as a plan.
Acquisition Projections Builder
Five years for the lender, thirteen weeks for you.
Equity Waterfall Calculator
Who gets what at exit, tier by tier.
Seller Transition Terms
The seller's post-close involvement, set.
Operation & Growth Templates
What staff, customers and suppliers hear.
Operating Tools
The plan for a business you now own.
Resources for This Stage
Books
Podcasts & YouTube
Communities & Networks
Education & Programs
Newsletters
The Words This Stage Uses
Consulting agreement
A paid contract keeping the seller on as an advisor, not an owner.
Accountability chart
A one-page map of every seat in a company and the numbers each seat owns.
At-will employment
Employment either side can end at any time, for any lawful reason.
Borrowing base
The share of receivables and inventory a credit line will lend against.
Deficiency
What is still owed after the collateral is sold and the proceeds applied.
Discharge (bankruptcy)
The court order ending your personal liability for a debt; liens survive it.
Dividend
Profit a corporation pays its owners out of money already taxed once.
EIN (Employer Identification Number)
The federal tax ID a business runs payroll and files returns under.
EPLI
Cover for employment claims: wrongful termination, discrimination, harassment.
FICA tip credit
A tax credit for the Social Security tax an employer pays on its staff's tips.
Forbearance
A lender's written agreement to pause enforcement for an agreed period.
Knowledge transfer
The handover of what a departing owner knows and never wrote down.
A selection of the words this stage uses. The rest are in the glossary.