When you decide to purchase a business from someone else, should you exclaim to the world that the company is now under new management? There are certainly different schools of thought on this matter and it really depends on the nature of the transaction and a number of other factors that can affect the public’s perception of what the company or business has to offer.
Using the example of buying a restaurant, the single greatest determining factor would be what you want to do with the eatery. This, in turn, depends a lot on the current clientele and how profitable the restaurant currently is. For instance, if you purchased this restaurant because it happens to be the hottest spot in town and it’s a packed house every night, you probably want to maintain the status quo and reap the benefits of the established brand. People go to Restaurant XYZ because they know what to expect from it. If you go and announce that changes are happening, they may not be so inclined to come back. You bought into the brand and the pre-existing customer base that accompanies it.
By contrast, if you purchased a restaurant because it was a good price and a good location, it may be more appropriate to have a big opening gala to announce the changes to come. This is particularly true if you are buying a restaurant that has had significantly slowed business lately, because the announcement of new management can renew vigor and renew interest. It may have grown stagnant over the years, so you want people to get excited about the new possibilities of what your management can bring.
With the latter set of circumstances, you absolutely want to attract attention to yourself and the fact that the restaurant (or company) is under new management. Host a lavish grand opening and make sure the public knows about it. Random passers-by will be interested to see what all the hub-bub is about. Without this kind of attention, you can fully expect to continue to the slow level of business that preceded your purchase.
David Morton
March 26, 2009 8:17 pm
Isn’t this is what Gordon Ramsay’s TV show is largely about? Making a big splash? Getting the flagging public interest excited about new changes coming to a restaurant?
Good topic, Gary, and nice analogy about the restaurants as a good example of making new management an issue after a new business purchase.
I follow your tweets. I take it the diet/weightloss project is going well!
David
Jennifer Priest
March 26, 2009 8:20 pm
Hi Gary,
Netchick sent me to see you.
Glad to meet you. Interesting post. Good point that you may not want to spend a whole lot of money letting people know about a change if the reputation is good. I like the idea of an opening Gala though :-)
Michael Kwan
March 26, 2009 9:13 pm
Not to toot my own horn, but this article was actually written and posted by me. I do Great Gadgets, Business 101, WordPress Wednesday, Marketing 101, and In The Sphere. Feel free to check out my blog if you have a spare moment or two. :)
The restaurant example immediately came to mind for me, because my parents were in the restaurant business for a number of years. We experienced both kinds of reactions when my parents bought new restaurants. Some customers welcomed the change, while others were quite upset about the unexpected arrival of new management.
And yes, Gary’s weight loss project seems to be going very well! Kudos to Gary for sure!
Larry Edger
March 27, 2009 6:22 am
Sorry, but your example is way off base. You make a point and then back off of it in the first paragraph. It seems you lost the impact and your point as soon as you made it.
When you purchase a business, each circumstance is different. If it is successful, the last thing you want to do is announce you are changing it. If it is not successful, you will want to do a lot more than announce a “management” change. In fact, rarely do you want to throw up a sign that says “Under New Management”. This says nothing positive to the guest or prospective guest. This blunder is one reason why 6 out of 10 restaurants fail in their initial stages.
Bad example.
blogadmin
March 27, 2009 6:29 am
Interesting I would say 6 out of 10 restaurants fail because they are the same as every other restaurant so there is really no reason for customers to come back.
As for posting under new management as a consumer I find it a draw to try a restaurant again if it is under new management to see if it is an improvement.
seo joel
March 27, 2009 8:42 am
Those are great points, and you always have to be careful and find out if there is a major reason that the business is being sold at that point in time. I have almost obtained businesses in the past, and then found some dark secrets lurking around!
RaiulBaztepo
March 28, 2009 5:00 pm
Hello!
Very Interesting post! Thank you for such interesting resource!
PS: Sorry for my bad english, I’v just started to learn this language ;)
See you!
Your, Raiul Baztepo