If you want to get into the event rental business, you could always start your own from scratch— we’ve even created a handy guide to get you started. Or, you could buy an event company that’s already established and comes with clients, events, inventory, and employees. Both options have their own challenges and rewards, but purchasing an established event company could mean a faster turnaround for making a profit.
The biggest challenge with purchasing an established event company is just that: it’s established. Your employees, policies, and clients are already set a certain way, and making changes can be difficult. It’s possible that nothing will be documented and you’re left to wing it. In extreme cases, employees can be obstinate and must be let go; policies may need to be completely revised from the ground up; and you may have to turn down clients that came with the event company. On the other hand, you could acquire a well-oiled machine, so it’s important to do your research and understand the type of company you’re planning to acquire— and the type of work you’re willing to put into it.
The inventory that comes with your prospective acquisition could be old, beat up, or cheap. You may also acquire inventory that is the complete opposite of what you envision for your event company in terms of style or application. If you’re unable to thoroughly examine it before purchasing the company, make sure you have the budget to replace cheap or worn out items with quality pieces.
There’s also the distinct possibility that the inventory management system isn’t in good shape. This could be due to bad software (or none at all), poor upkeep, and/or disorganization. You may need to completely reorganize your new inventory with a new software— while you may think it’s just not worth the time and energy, you’d be wrong. Making sure your inventory management system is in good shape is vital for avoiding double-bookings, makes it easier to plan events, and will allow your inventory and your inventory management system to grow along with your business. It will be worth all of the time and effort you put in!
If you find yourself in this situation, we highly recommend scheduling a demo appointment with us at Goodshuffle Pro— between our user-friendly software and our awesome support team, we can help you get your inventory back on track ASAP.
Hopefully the business you’re acquiring already has a good CPA they use; if so, keep using them! They’ll already be familiar with all of the processes, etc. and they’ll be better equipped to get you caught up.
If all the books were maintained in house on a spreadsheet, you’ll need to find yourself an excellent CPA to make sure everything is in order. If the previous owners owed back taxes, it’s possible that you will now be responsible for those; a skilled accountant will be able to determine next steps to get your new company back in good standing with the State and the IRS.
During any business acquisition, there is a risk that employees will leave the company or that you may have to let people go. Sometimes these are employees who are stubborn and refuse to even consider adapting to new changes, even if they’re in the event company’s best interest. Be patient during the transition process, but also know that some long-time employees may unfortunately never come around to new ways of doing things.
With any big transition, it’s important to make sure that current employees feel valued by their new bosses. Make sure to include them in planning any new procedures, organizational systems, and style changes, as an employee who knows the ropes and the clients will be invaluable.
Any current and/or loyal clients will be accustomed to and informed of the previous business owner’s policies. If these are not clearly documented, you may have to talk with these clients about your own policies and have them sign new paperwork. It’s possible that some clients will be irritated by this process, so make sure you have your most diplomatic employees helping you with the transition process.
The current procedures and processes may be completely undocumented or even non-existent, which means you may have to start from scratch. If possible, have any current employees walk you through what they do so you can get a feel how things are run and why before you change all the rules, as things may be configured a certain way for a good reason. Bringing in current employees will also help you get to know them, help them feel included in changes, and reinforce their importance to the event company as it’s changing hands.
Your new team will be your greatest asset or the biggest hurdle during the transition. If you plan on keeping the team onboard, include them in your decision making process. They’ll likely have some great ideas on how to solve known issues, handle certain clients, and have relationships with other vendors and venues that will prove to be invaluable in your new venture.