- Step 1. Establish what the business owes, and when
- Step 2. Establish what it is owed, and by whom
- Step 3. Find out who actually knows how things work
- Step 4. Read the customer concentration
- Step 5. Find the commitments that are not in the contracts
- Step 6. Say almost nothing about the future
- Step 7. Write down what you own
The question people ask in this situation is what they should do first. The more useful version, and the one that actually organizes the week, is narrower than that: what do I need to know by Friday that I cannot afford to learn in month two? Almost everything else can wait, and treating the first week as a planning exercise rather than an establishing exercise is how people lose options they did not know they had.
What follows is the week I would run. It applies whether the business arrived through a family succession, a purchase, or a sudden departure, because in all three cases you are in the same position: you are now responsible for a set of obligations you did not create and cannot yet see. The ninety-day version of this question, for someone stepping into an operating role rather than an ownership one, is in the four kinds of first 90 days.
Step 1. Establish what the business owes, and when
Start with obligations, dated, on one sheet. Not the balance sheet. A list of every payment, delivery, covenant, renewal, and legal deadline the business is committed to over the next twelve months, with dates against them.
The reason this comes first is that obligations are the only category of information that can remove options from you while you are learning. Everything else in the business will still be there in three weeks. A covenant test, a lease renewal, a customer contract with an auto-renew window, or a supplier agreement with a volume commitment will not wait, and missing one in week two because you were still reading the P&L is a self-inflicted wound that is entirely avoidable.
Get it from the bookkeeper or controller directly rather than from a document, and ask the question in a specific form: what is the next thing this business has to do or pay, and what is the one after that. Ask it three or four times and you will get a chain that no single report contains.
Step 2. Establish what it is owed, and by whom
Then the receivables, aged, with names on them. This is usually the fastest cash available to a new owner and it is nearly always in worse shape than the summary suggests, because collection conversations in owner-operated businesses tend to be avoided as relationship risk.
Read past the total. What you want is the concentration: how much of the overdue balance sits with two or three accounts, and how long it has been sitting. A long, thin tail of small overdue balances is administrative drift. A large balance with one customer that has aged for months is a commercial situation somebody has been managing quietly, and you need to know what was said before you say anything yourself.
Collection conversations in owner-operated businesses get avoided as relationship risk, which is why the receivables ledger is nearly always in worse shape than the summary suggests.
Step 3. Find out who actually knows how things work
Every small business runs on two or three people whose knowledge is not written anywhere, and identifying them in week one is more valuable than any process documentation you will ever commission. They are rarely the people at the top of the org chart.
The way to find them is to watch where questions go. Spend two days paying attention to who gets interrupted, who gets called when something breaks, and whose desk people stop at on the way to somewhere else. That traffic pattern is a map of where the operating knowledge actually lives, and it does not correlate reliably with title or tenure.
Once you have the two or three names, do nothing dramatic with them. Do not promote them, do not announce anything, and above all do not immediately ask them to document what they know, which reads to a knowledgeable person as the first step in making them replaceable. What you do is make sure they know you know, and that their situation is not about to get worse.
Step 4. Read the customer concentration
Take revenue by customer for the last two years and find out what share of it comes from the top three. This one number tells you more about the risk you have taken on than any other figure in the business, and it is frequently the thing the previous owner was least keen to discuss in detail.
High concentration is not automatically bad. A business with sixty percent of revenue from one customer and a fifteen-year relationship is a different proposition from one that reached the same concentration in the last eighteen months, and the direction of travel is the part that matters. Rising concentration means the base is eroding underneath a growing account, which is a condition that looks like growth right up until it does not.
Then find out who owns each of those relationships personally. In owner-operated businesses the answer is often the person who just left, and if that is the case you have a week-one problem rather than a year-one problem.
Step 5. Find the commitments that are not in the contracts
Every business you inherit carries a set of understandings that exist only in someone’s memory: a price that was promised to hold, a delivery window that is always accommodated, a payment term that is quietly ignored for one account, a job that is always taken even though it loses money. None of it is written down and all of it is real.
Ask directly, of the two or three people from step three, and ask it in the form that gets an answer: what did the previous owner always do for people that is not in any agreement. You will get three or four items and each one is a live obligation that a customer, a supplier, or an employee is currently relying on.
Every inherited business carries understandings that exist only in someone’s memory. None of it is written down, all of it is real, and customers are relying on every item.
You do not have to honor all of them permanently. You do have to know about them before you accidentally break one, because breaking an unwritten commitment you did not know existed reads externally as a change in how the business treats people, and that is a reputation you can acquire in a fortnight and spend two years shedding.
Step 6. Say almost nothing about the future
Week one is not the time for a vision. Everyone in the building is waiting to hear what changes, and the temptation to reduce their anxiety by describing a direction is strong and should be resisted, because any direction you describe in week one is built on five days of information and you will be held to it.
What you should say, clearly and to everyone, is three things: what you are doing this week, when they will next hear from you, and what is not changing between now and then. That last item is the one that actually reduces anxiety, and it costs you nothing because it is true.
The version of this that goes wrong is silence. Ambiguity in week one gets filled with the worst available rumor, and you will spend month two undoing something you never said.
Step 7. Write down what you own
Close the week with one page, dated, that states what you found. Obligations and their dates. Receivables and their concentration. The people the business actually runs on. Customer concentration and its direction. The unwritten commitments. That page is the baseline, and it is the only version of it that will ever exist uncontaminated by later opinion.
Keep it. Six months from now you will be told, sincerely, that a particular arrangement has always been that way or that a customer relationship was always handled differently. Your own dated record, written before anybody had an interest in your conclusions, settles those conversations in about thirty seconds.
- Monday: obligations, dated, on one sheet
- Monday and Tuesday: aged receivables with names and concentration
- Tuesday and Wednesday: watch where the questions go
- Wednesday: revenue by customer, two years, top three share
- Thursday: ask what the previous owner always did for people
- All week: what you are doing, when they hear from you next, what is not changing
- Friday: one dated page, filed where you can find it
Monday morning, ask your controller one question and nothing else: what is the next thing this business is committed to, and what is the one after that. Everything else in the week follows from the answer.
About the Stagnation Assassin
Todd Hagopian is a Fortune 500 transformation executive who has generated $3B in shareholder value across Berkshire Hathaway, Illinois Tool Works, Whirlpool, and JBT Marel, where he serves as Global VP of Product Strategy and Marketing. Known as The Stagnation Assassin, he is the author of two published books: The Unfair Advantage: Weaponizing the Hypomanic Toolbox and Stagnation Assassin: The Anti-Consultant Manifesto. His blog is published in 15+ languages and read by operators worldwide. Bring him to your stage via his speaking page or connect with him on LinkedIn.
Once the week is done, the question becomes whether what you inherited is healthy or just quiet. Send me your page and I will run Stagnation Genome scoring against it so you know which one you bought.