Important considerations before you merge, acquire or even sell a business
Posted on 14th March 2019 at 12:45
Buying or selling a business or merging with another company is not just a case of hashing out the legal side of things.
There’s a lot more to it than well formulated contracts and the work is not finished once the documents are signed. Things can go South quickly if major consideration is not given to how the newly joined companies are going to work together.
What can go wrong
Common pitfalls are not taking into account that two (possibly very) different company cultures are merging, and that systems and processes might vary considerably between the two companies. It is important not to rush the integration and to start the process well before the documents are signed.
An integration of two companies usually takes a lot longer than expected, especially if the two parties are former competitors. It will probably take a while to overcome trust issues.
How to ensure the success of a merged enterprise
If two companies are brought together smoothly, you can create an atmosphere of collaboration, and the newly formed entity can be even more creative and innovative.
To begin with, look at strengths and weaknesses of both companies. Create an integration team consisting of executives from both companies. This way you are sure you recognise strengths that may only exist on one side or weaknesses that exist on both sides. You can then create new systems and processes around that.
When merging two businesses, whether that’s an acquisition or an actual merger, it is important to compromise. You want to avoid losing key personnel and destroy whatever it was that made the other company great to merge with. When company cultures clash strongly, think about creating a best-of-both approach.
Do the companies have sites outside the main headquarters? Then also consider how you will bring them together. Do not only concentrate on merging the main offices, but subsidiaries, branches and/or franchise holders as well.
It is useful to look at the integration as a three-step process:
Step 1 – you are running 2 separate business entities
Step 2 – the process of the actual integration including consolidation or changeover of systems and staff training
Step 3 – one combined enterprise with everyone working towards the same targets
Important considerations when selling a company
If you are one selling a company, consider the need for data to me maintained or archived presale to meet legal and/or regulatory needs. This is particularly important for GDPR reasons, but also for best practice.
All the above needs to be thought through as early as possible to ensure nothing is missed and the transition is as easy as possible.
How Green Giant Consulting can help
The fundamental message is that how the businesses are going to work needs to be thought about at the very start of the process!
Nothing is more important than getting the change from two single businesses into one combined business right. We can offer Business Change Management and Delivery, Project Management as well as our GDPR consultancy to help make the transition go smoothly.
Please get in touch for a complimentary 2-hour Consultancy session to see how we can help. You can contact Green Giant Consulting today on 0844 259 6210 or visit our Contact Page.
Share this post: