One of the biggest trends that is currently having a huge effect on the world of business right now is merging companies. The merger and acquisition of a company is nothing new, but these days it seems like more entrepreneurs are willing to have their business absorbed by another or fuel their success even further by buying a company.
However, even though more and more businesses are merging together, committing to and going through with a full merger and acquisition is not at all for the faint-hearted, whether you are buying a company to merge with or your business is the one that is being bought out. It is a process that can be very long and drawn-out and needs to be planned in the most minute of details. So, if you are considering merging your company with another one, it’s probably a good idea to start putting some plans into place right now, so that you don’t face any huge shocks along the way.
If a merger is on the cards for you in the coming future, you should keep on reading through this blog. We’ll be outlining some of the best tips that you can use throughout the whole of the merger process.
Spend Time Finding The Right Merger Partner
One of the most important aspects of any merger and acquisition is who you will actually be merging with. If you are the one buying another company, then you will have a lot more say in this than if you were the organization being bought out. Generally speaking, it’s always easier to merge with a company that is very similar to yours. In fact, you might want to look to your competitors for some suitable business to merge with. Your competitors will have very similar products or services to what you currently offer customers and, as a result, they will probably have a few of the same processes and systems within their organization. And that means that the whole merging process will be a lot easier as there won’t be much to change when the two companies come together. So, if you know that one of your competitors is currently struggling, you might want to reach out to them with the offer of a merger.
Speak To All Shareholders
Of course, before you do commit to merging your company with another, you will need to get the approval of all your shareholders and anyone else who might have a financial stake in the company. If your stakeholders and other investors aren’t too keen on the whole idea of a merger, then you might face a struggle to get started. These people are very powerful in the company as they will hold a lot of sway when it comes to making important decisions such as this one. So, you might have to prepare a very good pitch in order to persuade them that merging really is the best move for your organization.
Seek Financial Stability
It doesn’t matter which end of the merger your company is on, you will need to be financially stable. If you are buying another company to absorb into yours, then your current one needs to be stable enough to take on a whole other company. Even if you are the company being bought out, you still need to have some stability, or else you might not look like a good opportunity from another entrepreneur’s point of view. So, if you have any outstanding debts, it’s a good idea to start paying them back. Not only will this give you a bit more financial independence, but you will also improved from a better credit rating as well.
Write Your Merger Plan
It’s also necessary to have a plan for your whole merger in place before you start the process. The plan should outline everything that needs to be done throughout the whole process and any deadlines that you would like to stick to. Make sure that both businesses are considered when creating this plan as you will need to make sure that there are action points for both parties. Everyone who has an active part in the merger needs to have a copy of this plan, so it needs to be clear and easy to follow for everyone involved.
Bring People Together
One of the main problems that some entrepreneurs find when attempting to merge two companies together is that the employees from each business could clash or find it difficult to work together. This is something that you should be able to sort out in the very early stages before the two groups are brought together, though, which will make things a lot easier further down the line. For instance, if you set up some social events with the teams from both companies, then you should find that they all start to bond. They will then feel a lot more comfortable when they start to share the same office. The more effort you put into the people-side of a merger in the early stages, then the bigger the benefit will be once the acquisition has been completed.
Focus On Finance, Sales, And Marketing
Companies are made up of many different teams and departments, some of which will need to be focused on more than others during the whole process of a merger and acquisition. Take your finance, sales, and marketing teams for instance. Even though they aren’t working on the products or services that your company provides, they will face a lot of extra work during the merger. The finance team will need to work on bringing the two companies together from a financial point of view, while the sales and marketing departments will need to make sure that your products are continually bought by customers. So, putting a bit of effort into these departments can help your company continue as normal while the whole merger is taking place in the background.
Think About Outsourcing During The Merger
If there is one thing that is true for all mergers and acquisitions across the board, it is that things will get very busy in both companies during the whole process. That’s because the businesses will need to operate as usual to ensure that there is a constant flow of cash into them, while also dealing with tasks and jobs related to the merger. During this time, it could be beneficial for you to outsource some projects to take the strain off all your employees. You could use a top marketing agency to take some of the pressure off your current marketing team. An accountant could also oversee the finances related to the merger while your accounting department get on with the usual daily tasks. All of these extra hands will certainly help the merger run as smoothly as possible.
Consider Redundancies
Merging two companies can be very challenging at times. That’s especially when you need to tighten the purse strings and think about letting some staff go. This is usually always necessary, as you won’t be able to have all employees from both companies continue in the office – there just won’t be the finance or office space to support everyone. When it does come to carrying out some redundancies, you need to be sympathetic and respectful to all the employees who you do have to let go. Make sure that you have an attractive redundancy available for them so that they have plenty of financial support to start again.
Share All Merger Information Efficiently
There will be a lot of people in both countries who need to have all the information available about the merger. So, any documents or contracts that are created regarding the merger need to be readily available for them. The best way to do this is to make a digital copy of every piece of paperwork and your merger plan, and upload them to a cloud platform. Then anyone who has log-in details for the platform can access the documents from wherever they may be in the world. Not only that, though, but as the majority of cloud platforms are extremely secure, you won’t have to worry about losing them to hackers or viruses.
Hold Review Meetings On A Regular Basis
It’s always worth checking in with your whole merger and acquisition team to make sure that everything is playing out as it should. The best way to keep a check on things and discuss the ongoing progress with everyone involved is to hold regular meetings. Ideally, you should plan a minimum of one a month, but you might need them to be more frequent if the merger isn’t going to take a long period of time. During these meetings, you can bring up any potential issues that need to be dealt with and make sure that everyone is up to speed with where the current process is currently at.
Merging and acquisition can be quite a tricky business if things start to unravel. As long as you follow all the tips above, though, you shouldn’t have too many issues.
