For young businesses, buying or merging with another company can be a smart move, giving impetus to development and prosperity. This enlarges the capital and opens up new opportunities for its use, attracts new suppliers, helps to fight competition and increases the chances of attracting new customers.
But from business, the merger of companies operating in the same industry is not an easy task. Mergers and acquisitions not only open new horizons but also carry certain difficulties. How to make the process of mergers or acquisitions go as painlessly and efficiently as possible?
1. What do you need to know about mergers/acquisitions?
The process of acquiring another company can take much longer than expected. Former competitors will not soon forget that you are now a partner variancetv, owner or co-owner. You cannot come and pretend that there was nothing. Enough effort will be needed to relieve tension and build trust.
Obligations are often short-lived.
There is no need to hope that managers will remain loyal to the new company in the long run. Your competitors may well take advantage of the situation to destabilize the relationship between the new management and employees of the acquired company.
One must always think about the future.
After completing the M&A process, make sure your new employees are thinking about the future of the company. Take the time to work out together with managers and senior staff an action plan for the near future to achieve overall success. Allow everyone to speak out. A conversation usually strengthens a relationship.
It should inform customers.
Competitors are not the only ones who can try to cash in on the merger process. Clients can also take advantage of the situation and, through blackmail and threats, try to obtain more favorable terms of the transaction. Do not give in to pressure. Better yet, before the process of merging, talk with customers and try to convince them that in the future they will benefit from a new form of cooperation.
Employees can resist change.
Everyone is afraid of change, because it is unknown, unknown and obscure, and any uncertainty is frightening. You should talk with your employees and explain the appropriateness of such an act. And also to assure that all people devoted to the company will be rewarded for their loyalty and constancy.
Do not underestimate potential accounting woes.
Take care to provide yourself with serious financial support. It may be needed because the accounting accounts of both companies will be studied and agreed upon for a long time, while the material support of each of the segments must be continuous and fully implemented.
2. What needs to be done so that the merger process runs smoothly and does not become a major shock?
Test your motives for strength.
Before starting the merger process, ask yourself, why do I need this? Will the merger of the two companies help solve my problems and achieve the desired goals?
Prepare your employees for upcoming changes.
After the merger of the two companies, the difference between the two corporate cultures will likely be exposed, which can lead to open confrontation. Also, your employees should know that they will not lose anything from the absorption process but only gain.
On the other hand, consider how you will solve the problem with the employees of the acquired company. They probably also have questions and complaints. Most likely, dismissals cannot be avoided, but if you are interested in some professionals, think about ways to motivate them in advance.
Set common goals.
Companies will remember for a long time that once they went in different ways and competed with each other. To erase this boundary and break down natural internal resistance, set common goals for best results in the shortest possible time. Nothing is stronger than constant and methodical work on general well-being shortly.
Get help from professionals.
The processes of mergers and acquisitions are quite complex and painful. To minimize risks and reduce the number of mistakes, it will not be superfluous to seek the help of legal and financial consultants who will help to get a good result after the transaction.