Buying an existing business: Staffing considerations

Buying a business with a staff in place can help smooth the transition in ownership. You'll have to evaluate current employees to determine if they fit in with your vision, or even if they want to stay. Don't overlook the importance of employee relationships with customers.

The staff is your "front line" for maintaining good customer relations. You first must make sure you have sufficient people to perform all the tasks related to operating the business, that job descriptions are adequate, and that there is little or no duplication of work. Then make sure your budget and cash flow will cover the money needed for wages, salaries and benefits.

Next, perform the difficult task of assessing the business's employees. Does the employee fit in? Is he a team player? Does he intend to stay or seek employment elsewhere once you take over? This evaluation begins with the first group meeting and carries over to one-on-one meetings. You must be a good listener and observer. Your characteristics of leadership will be tested.

Don't forget to seek the seller's input on each employee, but don't rely exclusively on those observations. Furthermore, your visions and plans for the future of the business will likely differ from those of the seller. Don't be surprised if one or more employees leave.