Your First 100 Days After Buying A Business

The Goal: Keep What You Bought

You paid for a business that works. The price was based on its earnings, and your lender approved the loan because those earnings cover the payments with room to spare. The job in the first 100 days is not to transform the business. It is to make sure the earnings you bought are still there on day 101.

New owners who struggle usually do so for one of three reasons: key employees leave, key customers drift, or cash runs short while they are still learning. Each one is easier to prevent than to fix. The plan below is built around those three risks.

Days 1 To 30: Listen And Reassure

Your employees are wondering whether their jobs, pay and routines are about to change. Answer that early and in person. Hold short one-on-ones with every employee in the first few weeks, or with every manager in a larger business. Ask what works, what frustrates them and what they would fix. Write it down. Do not promise changes yet.

Keep payroll, pay dates and benefits exactly as they were. If you must move payroll to a new provider because you bought assets into a new company, make sure the first payroll lands on time and correctly. A late or wrong first paycheck sends the worst possible message.

For customers, work through the top accounts by revenue with the seller. Most of these introductions happen under the seller's consulting agreement, which can run up to 24 months in total. Visit the biggest customers in person, with the seller if possible. The message is simple: same people, same service, a new owner who is committed to them.

Cash Comes First

The most common surprise for new owners is a cash squeeze in the first two or three months. In many asset purchases, the seller keeps the receivables, so you start with none. You pay payroll and suppliers from day one, but customer payments for your work do not arrive until weeks later. Working capital in the loan and a line of credit exist to cover that gap.

Build a simple 13-week cash forecast on day one: cash in, cash out and the balance each week. Update it every Friday. If the line goes negative in any week, you know weeks ahead and can act. Read working capital and lines of credit at closing for how buyers size this, and our working capital page for options after closing.

If your purchase agreement has a working capital true-up, it is usually settled in the first few months. Any shortfall the seller pays you can stay in the business as working capital. A seller rebate based on performance is different: SBA requires that money to pay down the SBA loan.

What You Promised Your Lender

At closing, you signed certifications and loan documents that come with ongoing duties. The SBA standard ones include:

• Books and financial statements. Keep proper books and send the lender financial statements at least annually, or whenever the lender asks.
• Taxes. Pay all federal, state and local taxes, including payroll and sales taxes, when they are due.
• Lender consent first. Do not change the ownership of the business, sell or pledge business assets outside the normal course of business, or make distributions that hurt the business's finances without the lender's written consent.
• Licenses. The lender needs evidence of every license the business requires within 90 days after the final disbursement.
• Insurance. Keep the required insurance on the collateral in force.
• The SBA poster. Display SBA Form 722 where employees and the public can see it.

Your lender's loan agreement may add its own reporting, such as tax returns each year or quarterly statements. Put every due date on a calendar now.

Days 31 To 60: Learn The Numbers

By the second month, you should be closing the books every month and comparing results to what you expected. The best yardstick is the cash flow your lender underwrote. If you had a Quality of Earnings report, use its adjusted earnings as your baseline.

Track a short list of numbers weekly:

• Cash balance and the 13-week forecast
• Sales and gross margin by service or product line
• Receivables over 60 days
• Revenue from your top ten customers
• Labor hours or payroll as a share of sales

If something drifts, find out why before you react. A slow month may be seasonal, and the seller can tell you whether it happened last year too.

Days 61 To 100: Make Your First Changes

By now you know the people, the customers and the numbers. Pick a few changes that are small, reversible and clearly helpful. Good first moves are often unglamorous: tighter invoicing so customers pay faster, a price increase on work that is clearly underpriced, fixing a tool or system employees have complained about, or hiring for a role the seller used to fill themselves.

Save the bigger moves for later: rebranding, cutting a service line, moving locations, replacing key managers or a second acquisition. When you are ready to grow by buying another company, the rules can be friendlier than your first purchase. See add-on acquisitions with an SBA loan.

Mistakes That Hurt New Owners

• Changing prices, pay or processes in the first weeks
• Letting the seller disappear before customer introductions are done
• Running out of cash because receivables were not part of the deal
• Missing payroll tax or sales tax deadlines in the new entity
• Paying a standby seller note early
• Taking money out of the business before you understand its cash cycle
• Forgetting the lender's reporting dates

Three years after closing, if a seller note has been paid on time, you may be able to refinance it. That is covered in refinancing a seller note. If you are still finding your business, start with a pre-qualification letter and our SBA business acquisition loan overview. Your closing week is covered in the closing day guide.