Purchasing a company can be a task and a half. You have so much paperwork to go over, and the inspection process of their accounts receivables, and inventory can be almost painful. Nonetheless, there are many business owners who assume the businesses of other in hopes of creating a winning brand, cornering the market and increase their revenue.
Be careful to find out what warranties your prospective new company has given to their clients. Find out what their policies and procedures are for returns and exchanges. You must know what man hours you will be responsible for and either include the price of your estimation into the reduction of your value purchase of the property, or walk away so that you don’t get taken advantage of.
If you find yourself in this type of situation, you may want to consider some ways of capitalizing on the existing clients, fulfilling the warranties and making them your brand new clients! You are not benefiting from going out for free to fulfill a warranty so here is another option.
- Look over the warranty with a fine tooth comb, figure out what is missing and sell it. For example if in the warranty you do not cover a certain type of product, let the customer know that. If the warranty says that you will use a generic brand, offer the premium and let them decide. It is a sales tactic. Another example is that you could have them to upgrade a service or make something of value available to them….for purchase. You can also just tell them about “other services” and the warranty that you all provide. I can help you with ideas for this if you would like.
- Look over the purchase documents and determine whether you are required to fulfill the warranties. In either case your best way to resolve this type of situation may be to offer a “new service” on an existing offer that these customers may not be aware of, or a sell a product that takes less man hours to fulfill.
If you have acquired a business with a returns/exchanges policy that you may not agree with, you will want to make sure that you are aware of the policy and come up with a plain to retain the customer base that you have just paid for.
In any business deal, all things are negotiable. The key to a win-win business deal is making sure that both parties feel like they have won when the last piece of paper is signed. If at any time you feel like you are compromising your non-negotiables, just as I would advise in a relationship, walk away. If it is was meant for you, it will come back.
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