Wednesday, March 10, 2010

Consolidating Two Financial Planning Businesses - The 2nd 100 Day Action Plan

Congratulations, you’ve closed the deal after spending an extensive amount of time, money and energy dealing with legal agreements, bankers and accountants...whew, time to relax, right? Wrong!! It’s now time to begin implementing your second 100 Day Action Plan.

Why is this necessary?

History is littered with many business mergers and acquisitions that have failed due to poor planning after the deal is signed. Many business people will get so involved in “making the deal happen” that they believe everything will automatically fall into place once the contracts are signed. Sadly, this is not the case.

The second 100 day plan is absolutely critical to ensure a successful acquisition. The second 100 day planning should be discussed and mutually agreed to before the deal is closed so that both parties can begin its implementation immediately. This plan should deal with many important matters such as client introductions and transition, employee considerations and office amalgamation.

Your Client Message is Critical

During the initial due diligence, the vendor may have structured his/her clients in A, B, C and D categories. Plan to visit the A, B and C clients together and develop an aggressive strategy to accomplish this. It is important to have a dialogue with each client as quickly as possible.

What will be the main theme of your message to these clients? Rehearse your client message with family members or staff members prior to visiting clients. Clients may be nervous of the new ownership and will want to have assurances that their accounts will not be affected and service levels will at least continue, if not improve. It’s important to have new stationary available for the clients you meet along with any new or relevant marketing materials.

It is important to note any client nervousness or apprehension and develop an action plan on how to deal with it. You may decide that you may need to meet with the client again and provide the client with samples of financial plans and promote the typical quality of work that they can expect from you. You may consider leaving the client with testimonials from other satisfied clients.

Clients may ask the vendor how long the vendor plans to stay in the business. This is a critical question that must be answered carefully. Put yourself in the client’s shoes, would you want to hear that your long trusted advisor is leaving the business? You may consider communicating that you will continue to have access to the vendor for longer than the transition period. Clients may feel encouraged to hear that an agreement has been developed whereby you can ask the vendor to work on a contractual basis if the need should arise.

New stationary – Develop a Co-Brand for Stationary and Newsletters

Consider developing new stationary to show a co-brand of both individual or company names and communicate a sense of a joint venture rather than an out-right purchase. You may want to continue using this stationary even after the vendor’s transition period has expired, with the vendor’s permission.

Employee Management

By now, both parties should have a plan for each of their respective employees. In many cases, the vendor and purchaser may insist on the vendor’s assistant(s) staying on the payroll to help with the transition and to help reassure clients that not everything is changing.

It is very important to keep your employees informed of your plans from the beginning, especially for vendors. Employees can become nervous about their future employment status when their employer is considering a change of ownership. Employees will want to know how they will fit within the new company. Will they have new responsibilities and will they need additional training.

Develop a “To Do” List

Both parties along with their administrators should discuss the various details that will need attention. As an example, will signage need to be changed, offices and staff relocated, new training for staff, changes to existing forms, bank account updates, re-directing commissions and so on.

If you have access to a competent administrator that is able to manage complex projects, you may consider asking this individual to be the transition coordinator and be responsible for planning, tracking and organizing the changes that will have to be done.

In closing, planning, planning and implementation is key to a successful acquisition of another advisor’s book. If you fail to plan, you are planning to fail!

No comments:

Post a Comment