It’s always a mystery to me why someone would pay a lot of money to purchase a successful craft business and immediately change things. This happens so frequently that I feel it warrants addressing.
My friend Cyndy spent a decade building a profitable business selling items from her native country. She had a strong following with repeat customers and great relationships with her vendors. When she decided to return to her homeland, she sold to a local man and trained him in all aspects of the business.
The week the new owner took over, he began “cleaning up” the shop, which meant changing all the displays and straightening up all the inventory. Several of us who knew the business explained to him that part of Cyndy’s success was that she had figured out how the traffic patterns in her shop drew attention to particular items and she had placed things strategically where they sold best. He continued to make changes and complained that business was slow. Recently, I noticed he had moved the store to a less expensive and less than prime location. It’s no coincidence that sales are suffering.
In my little seaside town alone, I’ve seen this happen whenever shops or galleries change ownership. It makes sense to make changes if you purchase an unsuccessful business with the intent of turning it around and making it profitable, but if you buy a business based on it’s profitable track record, the biggest mistake you can make is to change anything immediately. What you pay for when you purchase a successful business is the previous owner’s knowledge, reputation and relationships. If you aren’t going to follow their lead, save your money and start your own business.
Sure you want to give the business your own style and flavor but when purchasing a successful, profitable business, my recommendation is to soak up every bit of information the previous owner shares, ask questions and listen. Ask for introductions to clients and artists. Ask the seller to attend your first trade show with you and help you with your initial purchase orders. Then model their practices exactly for at least the first year. Put aside your own preferences for now and do things exactly as the previous owner did, making notes on improvements you think of but don’t implement any changes yet. Listen to clients. Ask what they like about the business and what improvements they would like to see. Note comments that you hear repeatedly.
Assuming your numbers are as good at the end of the first year as before you purchased, you can begin making small improvements a bit at a time. Don’t alter too much at once so that you can monitor the results of each modification. If you see positive results, keep the change. If your numbers begin to slide, either make adjustments or return to the way the seller did things. Remember, you paid for that know-how.