If you want your business merger to succeed, you really need to only know one rule: Merging two businesses is not like running one slightly larger business. If you approach integration with this in mind, you’re far more likely to succeed.
Once you understand that the two undertakings are inescapably and fundamentally different, you’ll be more predisposed to work with skilled M&A advisors and take intelligent, proactive steps that promote the success of your business merger. Let’s review a few key dos and don’ts as you navigate an integration.
- Treat an acquisition as a business strategy. It should be only a way to execute a pre-existing strategy.
- Don’t be misled by the term “post-merger integration.” Integration begins well before closing.
- Don’t rely on lawyers and accountants for all due diligence needs. You need to spend some time preparing for due diligence on your own, or else the process may dramatically slow.
- Don’t wrap up integration too soon. Merging two businesses is a major feat. It demands a lot of time and patience.
- Take opportunities as they come, without moving outside of your strategy.
- Treat your strategy as the primary basis for all integration decisions.
- Begin integration early in the strategic phase, or at the very latest when negotiating the deal.
- Do decide ahead of closing exactly what the merger will look like, and the extent to which the two businesses will blend into one.
- Assemble a dedicated, diverse team staffed from both companies. Treat this team as an insurance policy against integration failure.
- Identify key value drivers that will help you achieve the deal’s strategic goals.
- Create a fast, clear channel for integration decision-making so you can avoid wasting time and endless busy work.
- Devise your own due diligence list to stay ahead of the curve.
- Over-communicate about the merger. Otherwise rumor and innuendo will take the place of fact.
- Move quickly. Faster action means less uncertainty. Deals die when they lose momentum by moving too lowly.
- Know that there’s no such thing as flawless information or perfect resolution. A project completed reasonably well is superior to a project that’s never completed in a quest for perfection.
- Identify key people and customers, then take speedy action to protect them. Don’t give them an excuse to walk away or be anxious about the merger.
- Find quick wins you can achieve early. These communicate to key stakeholders that the deal is a positive thing, and that it’s going according to plan.
- Continually re-evaluate your strategic plan, and ensure your actions are in line with it.
Perhaps most importantly of all, take time to look up from checklists and negotiations to assess how things are actually going. It’s easy to miss the forest for the trees, and the M&A process is inherently overwhelming. Working with a trusted business broker or M&A advisory team can help you keep your eye on the prize, and ensure that your integration goals come to fruition.
About Five Talents Financial Group
There comes a time when business owners should decide how they will handle the exit of their business. Prudent entrepreneurs do not leave this critical juncture to chance, they plan for it thoroughly and well before such an event should occur. Successfully navigating the sale or transfer of your business requires a dedicated and capable team. The members of Five Talents collectively possess nearly a century of business experience combined with specific industry training and certification. The skills and know how, combined with a deep commitment to the best possible outcomes for our clientele, enable us to provide you with advisory services you can feel secure with.
Give us a call to have a confidential discussion about what may be right for you and your family.