6 TIPS FOR A SUCCESSFUL MERGER AND ACQUISITION PROCESS
Acquiring a new company is about more than just gaining a lead on the market. It’s about combining two separate entities into one successful force. The process includes merging computer systems, financial challenges and marketing teams, plus so much more. Mergers equate to a lot of work, but when done properly can lead to a lot of rewards.
Around 80% of mergers fail due to a number of easy to make mistakes, even for seasoned business professionals. Here are some important tips to consider when going through the M&A process for the most successful outcome possible.
1. Broaden Your Outlook Along With Your Brand
It’s important to recognize that any M&A results in a new company that requires a fresh outlook. It’s not just your company growing larger. Instead, it’s about adapting your mindset for a successful integration of two separate companies.
You’ve got Culture A (your business) and Culture B (business you are acquiring), and you must create a Third Culture that combines both. Both businesses have their own unique culture and it’s your job to build the necessary bridges for the best of both to survive and thrive.
2. Know Where Your Business Stands Financially
Before entering any agreements it’s so important that you have a strong understanding of where your business stands financially, before and after the acquisition goes into play.
There was a time when it was all about profits and loss but now businesses see the importance of looking at liquidity. Does your business have enough liquidity to successfully pull off the transaction?
Acquisitions offer an exciting entryway to growth but it’s important to consider the strain it will place on company finances. Are you completely confident in its ability to carry this burden, and do you have the right capital funding strategies in place to handle anything that comes your way?
3. Rely On Your Team Via Clear Communication
Your team must be there to help assist the success of the merger so it’s important that they are in the know about what’s going on. Without clear communication and direction, worker morale will greatly suffer, ultimately hurting the success of your business.
If you need additional assistance pulling things off, you may want to bring in a team of temporary, specialized leaders that can help your business throughout the process in immeasurable ways.
4. It’s Not Just About Finances
One of the largest mistakes companies make during the M&A process is to view it as strictly financial. There are too many people with real feelings to ignore the non-financial side of things.
Communication is key, as listed above, but so too are presenting methodologies, teaching best practices, providing solid leadership, offering evaluations and reinventing the company from the bottom up. Large-scale collaborative efforts for creating change get everyone involved and feeling like a part of the change, as opposed to a victim of it.
5. Have Clear Goals
M&A strategies must include a clear set of goals including what you plan to do with your business and where your highest values rest. This includes everything you plan to gain from the transaction. For instance, do you plan to gain market share? Do you plan to acquire new products or intellectual capital? Are you trying to beat out the competition by becoming the low-cost company dominating your industry?
Your goals are the most important component of the entire deal. An experienced financial consultant can help decipher the best ways to go about achieving all of your goals, and then some.
6. Turn To DGK Group
DGK Group has extensive experience working with companies going through the process of M&A. As a result, we have the insights necessary to give you a leg up during this often-trying time. Don’t go at it alone, we can help you prevent many common mistakes and enjoy greater success.