The ABBA Group are an experienced team of business advisors focusing on sales, mergers and acquisition deals. As a ServoPro partner, the ABBA Group have been helping independent service station owners from all over Australia providing expert advice as to how they can get top dollar for their business.
One of the questions we’re getting from ServoPro members is; how can they ensure a smooth transition after buying a service station?
Why is it important that new business owners think about the transition of taking over a service station?
There are many things to consider when deciding to buy an existing service station. A smooth transition with minimal disruption to trading should be one of your top priorities. The last thing you want to happen is for existing customers and staff to start looking for alternatives to your business. This will, in turn, impact your future maintainable earnings. You want to ensure a smooth transition for yourself as well as your staff and customers.
As part of the deal, we have seen some service station owners offer to work in the business for a period of time to help with the transition. Is this a good idea?
If the option is there, definitely request that the previous owner stay on after the sale. By doing this, the seller can advise you on the day-to-day operational needs of the service station, for a predetermined period of time. This can provide stability, which is crucial during the transitional period. Take on board advice or tips on how to best run that particular site, as the outgoing owner will have experience that money cannot buy.
Take notes and ask questions. The previous owner and the staff know how to run the service station so let them teach you how to do it. Learn how things are currently done because only then can you make informed decisions on changing business procedures down the track.
New owners often come into the business with big ideas and big changes in mind. What advice would you give around making changes to the business?
Keep things consistent. Customers have become accustomed to how your service station operates and change may not be received with open arms. If you need to make changes, ensure they are minor to begin with. Based on customer feedback, you can then look to implement larger changes down the track.
Understand what the business stands for. Each business operates under a set of values or guidelines. Existing customers and staff understand these and you need to as well if you want your new business to succeed.
What about staff who are employed by the previous owner? How do you manage issues around keeping them in the business or if they’re not needed?
Get to know your staff. Staff are your number one asset so take the time to sit down with the people who work at the service station. This will ensure staff morale is maintained at a high level. When a new owner comes in, it’s inevitable that staff will begin to worry about job security. Reassure them they are very much a part of your business moving forward and that they are a valuable asset you want to keep.
What else should service station owners be aware of when they take over a business?
Maintain current procedures. It’s important to maintain procedures that ensure the service station runs smoothly on a daily basis. Ensure that you are on top of employee records, policies, invoices, payroll, taxes and all other paperwork.
Familiarise yourself with your new technology. The people that run the service station are important but equally as important is the technology that supports the business. You need to get up to speed with all software programs and the capabilities of each. Understanding how the technology works will help when things inevitably go wrong from time to time.
Create goodwill with your customers. Once you’re comfortable running the service station, it’s a good idea to offer some type of special offer or promotional giveaway. This will help create goodwill with your customer base and keep them loyal to your business.
In summary, what is the best advice you would give to the incoming service station owner?
Minimal disruption to how things currently operate is integral to a smooth transition. You need to minimise any disruption for staff, suppliers and clients. People like what they are familiar with, so try not to come in and make huge changes to begin with. Offer job security to employees and consistent service to customers and you’ll be on track to making your service station a successful business.