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It might seem like a great idea to buy a company but there are many pitfalls along the way. Most buyouts of companies end up failing for the buyer because they ignore these 7 deadly sins.

Make sure you don’t fall into these common traps.

1. You pay too much

The most important part of the deal when buying a company is what you agree to pay when you go in. The reason private equity works is because they will always seek to pay the minimum price and they won’t even consider looking at a deal that is overpriced (unless competitive ego gets in the way).

Don’t get into a bidding war. Don’t buy into the Seller’s or Broker’s stories. Don’t pay more than you can afford to finance. And do negotiate hard and get the lowest price you can. It’s simple common sense but the lower price you get going in, the more profit you make coming out. That’s just good business.

2. You have no experience in that industry

Sometimes it’s great to have a fresh view brought into a company from another industry. However, if you don’t know the industry then you can easily underestimate timings, costs, salaries and the competition.

If you’re set on entering into a new market then do your research first and ideally bring along people with experience in that arena. You may be the exception who bridges the gap and moves from one industry to another successfully but that road is littered with the damaged careers of many who didn’t.

3. You skip due diligence

Of course you’re cost conscious when you buy a company and Due Diligence can seem like an awful lot of effort. However, buying a company without proper Due Diligence is taking a major risk.

If you buy a car without checking it over then you might find it has some faults that need additional work. If you buy a house without a survey you can find serious problems with damp and subsidence which could cost you a lot to put right.

If you buy a business without Due Diligence you could be taking on major liabilities (including tax, NI and VAT) as well as the potential for insolvency, personal bankruptcy or even criminal penalties as a director of the company.

There are so many things that can be hidden in the history of a business and its directors and as a new director you inherit all those past issues and become responsible and liable for them.

Always make sure you undertake proper Due Diligence and if you have any concerns about the company you’re buying then either back out of the deal, get it checked by a lawyer or structure the deal in a way that protects you.

4. You forget about your own business

It can be very exciting chasing after acquisitions, making deals and completing a purchase. However, if you forget about the running of your own business during the 3 to 6 months you’ll spend on the acquisition process then you might not have much to bolt it on to when you’ve finished.

When you’re making an acquisition, you’ll often have your best team members around you (your CFO & COO). Unfortunately, these can be the key individuals who keep your business running when you’re not around.

It’s tough to run a business and an acquisition but you need to juggle both at the same time otherwise you will ultimately lose out. It can be a good idea to use more external resources to help you through the process and free up some of your time.

5. You ignore the staff and the good ones leave

The process of being acquired can be very unsettling for employees in the target business and often they are left in the dark until after the deal is completed. They will know something is happening as their bosses run around with bits of paper and panicked expressions and they might deduce that the outcome will be bad. If they expect to lose their jobs then they’ll start to look for new ones.

Unfortunately this can mean that some of the best staff can have already lined up new jobs before you acquire the business. And if they’ve not been treated well by the previous management then they may choose to leave soon after the deal is completed.

Another common issue is the lack of communication which often occurs after the deal is completed. The staff in the acquired company are left to wonder what’s happening and given no direction. And it won’t take long for the good ones to find new jobs.

As part of the acquisition process you must find out who the key employees are and engage with them as soon as you can (before or after the deal) and keep them enthused and motivated about the future of the new combined businesses. If you don’t then you’ll only have yourself to blame when you have a new business and no-one decent to run it.

6. You leave the business to fester

Along with a lack of communication after a deal is completed, the purchasing company often goes back to focussing on their own business and fails to properly integrate the business they’ve acquired.

When the previous owners have sold out, unless they are on clear incentive programs or earn-outs, they can easily lose their motivation to keep driving the business forward. They can decide that it’s no longer their issue. It’s now yours and they’ll wait to be directed by you. And with no-one driving the business it won’t be long before things start to slip.

As part of the acquisition process you must create an integration plan and implement it as soon as possible after the deal is complete. Make it clear and communicate it widely. If you don’t then every day will see your new acquisition losing value.

7. You lose the customers to the competition

The customers are often the last to hear when a company is taken over. But as soon as they do they expect to be contacted and assured that business will continue as normal, or even improve.

If you don’t communicate with the customers after the deal they’ll assume you don’t care about them. And then they’ll go and find someone who does care about them, namely your competitors.

Many customers will have experienced the chaos that can ensue after an acquisition with confusion over accounts, contacts, deliveries and payments. They’ll be watching to see how you handle these things and they’ll be acutely sensitive to the fact that it’s your problem and not theirs.

Again, create your integration and communication plans for customers well before the deal is completed and make sure you start implementing them immediately.

If you’re thinking of buying a company then watch out for these seven howlers and make sure you protect yourself with these simple actions.

That is the actual headline of the January 25th edition of Minneapolis St. Paul Business Journal*. It’s their annual Industry Outlook special report.

Believe me, I read the special report. I’m just like you - I want to know how to maximize my business in this economy and how to minimize any downsides.

Only 3 industry sectors are predicted to have a good outlook. Those sectors are Technology, AD/PR, and Health Care.

The good outlook for Health Care is obvious. No matter what is happening in our economy, people still require health care. And Minnesota has always been an innovator and leader in the health care field.

The technology predictions are good because corporations and individuals continue to demand more bandwidth, at higher speeds, and we have an increased need for data storage. It also makes sense to me that in an economy that threatens recession, a very good ROI is going to be in leveraging technology. Technology works for us 24/7, and at a fixed or predictable cost and efficiency. Technology, done correctly, really adds value.

The only other “up” outlook is for AD/PR. Why AD/PR? In a down economy it’s all about getting the eye of the consumers. And companies will want to do that very intelligently and strategically. PR will benefit because again, companies will want to put their best face forward. Ads and PR will showcase to consumers the value of a company’s products and services.

Will the dour predictions prove true for the other sectors - airlines, banking, energy, food, hospitality, insurance, manufacturing, med tech, media nonprofits, real estate, retail, and sports business? There will certainly be individual winners in those sectors too depending on how they are planning to outsmart their competition for the dollars in consumer’s pockets and on how well they carry those plans out to be the valuable option that cash strapped consumers will choose.

BUT, I firmly believe that coaching will do for companies what beefing up IT infrastructure and clever advertising and PR will do. It will help individuals and companies be their best and put their best foot forward and maximize efficiencies of their people to get the competitive edge. People that are being coached will not only be more valuable to the company, they will give more value to the consumers whose dollars they are wooing. Talk about leveraging and great ROI!

Coaches are in the business of adding value. Coaching helps people to achieve greater bandwidth and put their best foot forward too. We add value by helping our clients expand their options, giving them viable and timely information, success tips, holding them accountable, and giving them encouragement. These efforts of ours assist our clients in solving their problems and even more - expanding their potential. In this economy, we need everyone to be living and working at their highest level of ability.

Top performers in every industry sector, the ones that consistently outperform their competition, are invariably the companies and individuals that recognize and utilize the value of coaching as a strategic leveraging tool. Especially in a down economy, they need to rely on proven tools and techniques even more, and that need will be compounded in the less than favorable industry sectors. Here is a quote from Fortune Magazine: Asked for a conservative estimate of the monetary payoff from coaching they got, these managers described an average return of more than $100,000, or about six times what the coaching cost them. This figure is consistent with reports across the spectrum. In fact, this figure is often conservative.

Coaching used to be perceived as a perk for the executive levels of organizations. Now, with the understanding that coaching is not a perk so much as a very wise investment, it is spreading down the ranks and is available to anyone that has a mind to be coached. Many individuals are even paying for the coaching from personal funds because it helps them gain the promotions that they desire. Others are being creative and adding coaching to their individual development plans funding.

However you manage it - here is to your best year yet! And here is another quote: In any moment of decision the best you can do is the right thing. The worst you can do is nothing. - Theodore Roosevelt

In today’s high-paced, competitive workforce an effective office manager is key to successful business operation. As an effective office manager you need to understand your role, and your key objectives.

The key responsibility of any office manager is to ensure the smooth operation of day-to-day business. There are three levels required to accomplish any large task (like running an office)

1. Strategic Planning and Monitoring
2. Tactical Planning and Monitoring
3. Execution of the Plan

An Office Manager is a tactical manager. As a tactical manager you normally have the following key responsibilities.

1. Understand the strategic plan. This is harder than it sounds. It is not always easy to get a clear vision of your objectives from your leadership team. Keep asking for it until you get it, and accept and understand that you may never get a clear answer on this. Ask how your performance will be measured. If you can’t get a straight answer on the objectives, you can often figure them out by what you are being measured on. Strategic planners measure their staff on things that reflect what they want done. Your real objective is to meet not just the measurements, but also to meet the intent of the measurements.

2. Communicate your objectives. Start by writing down your best interpretation of what you think you are supposed to accomplish. Always pick 2 or 3 key objectives for the year. Communicate them to your boss (this is what I’m planning to do, tell me if you want any changes) Communicate them to your team. Don’t wait for your boss’s approval (unless additional spending is required).Start. If your boss disagrees, then make the necessary course corrections. Show some initiative. This is your team. If you’re struggling with where to start suggest looking at ways to reduce office costs and ways to improve making accurate time estimates and meeting them. The main thing is that you put together a plan and show that you have an organized direction. Tactical managers must be able to organize details and turn objectives into plans.

3. Motivate your team. Tell them what the objectives are. Tell them what they will be evaluated on. Ask them for ideas on how to accomplish the objectives. Listen to them. Whenever possible give people credit for their ideas. Whatever you do, don’t try to keep all the planning to yourself. The more you modify your plans with the ideas of your team, the more cooperation you will get in achieving them.

4. Monitor progress, communicate progress and deviations, and make course corrections. Your leaders want measurements. It’s the only way they know something is happening.

Understand the strategic plan, communicate your objectives, motivate your team and measure your progress.

A management concept training course, when applied correctly, can help to boost your company’s production and work effectiveness. When you apply the concepts that are taught in the course and are consistent, you will notice an exponential increase in efficiency in regards to personnel and operations. While there are many different types of management concept training courses available, only a handful are on a level where they can be properly utilized on an organizational level. These five tips will help you maximize and hone the skills that you learn in a management concept training course.

1. Use your Notes

All too often people sign up for training courses and skills enhancement courses and when they walk out the door they leave a good percentage of what they learned behind them. Studies show that people only retain a small percentage, in the neighborhood of 24%, of information that they are told or taught - unless they write it down. Take notes and USE THEM! Refer to them often, transcribe them to share with coworkers and apply what you learned to real life situations.

2. Have Regular Staff Development Meetings

Having regular staff development meetings where you reiterate and expand upon the material you covered at your management concept training course will help to make it a part of your organization. As you work on your skills, developing them and honing them, you are applying them to real life situations. Additionally, you are working with others in the applications of the principles taught.

3. Create a Focus Group

Create a focus group with a good, diverse team to bounce ideas off of each other. Discuss the principles that you learned, use your notes from the course and talk about ways to realistically apply the principles to your own organization. Explore creative applications for the skills and teach the other members of the focus group the skills you learned in your management concept training course.

4. Ask Questions

Ask questions and get feedback about how the principles and skills are working in your organization. Don’t, however, contain your quest for feedback solely to upper management. Ask lower level employees. They are often on the front lines, dealing directly with customers, product and operations so their feedback and suggestions could prove to be invaluable.

5. Keep on Learning

Don’t limit yourself to just one management concept training course, keep on learning! Take other courses that are related to your topic and look for courses that build on your existing skills, particularly those that you learned through your initial management concept training course. Never stop learning, update your skills, abilities and knowledge regularly.

When you attend a management concept training course, you can bring to your organization and position. There are even more ways that you can help your managers increase their effectiveness at work, never stop exploring.