1. Contact a corporate attorney to help navigate the process
It doesn’t take years of experience to know that a business merger is an incredibly complex process, with many potential pitfalls and setbacks that must be proactively avoided – but it does take years of experience to successfully overcome these dangers and achieve the best outcome possible . Working with corporate lawyers who you can trust to handle many of the more complex aspects of a merger is the only way to ensure that you can continue to serve the company’s needs – and that the merger is as quick and smooth as possible.
2. Learn from successful mergers
There is no shortage of success stories to draw inspiration from – even if they are outside your industry or area of expertise. For example, consider Proctor’s success as a case study. While they don’t offer a roadmap, some of the largest mergers and acquisitions offer plenty of insight into the things it takes to get it right.
3. Think about the cost
Many entrepreneurs are still ill-prepared for this. In fact, some estimates suggest that a merger could cost around 8% of the companies’ gross sales – but ideally only for a short time.
4. Take into account the culture and fit
Cracking the numbers and doing your own market research is only one side of the story. The other side is much more human and deserves as much attention as the financial aspect of the merger. Remember that your employees – and those of the other company – will not see the merger from exactly the same perspective as you. It is very important to have a plan for integrating two different companies and to make sure that no employee has to worry about their position in the new business.
5. Communicate with employees
Mergers don’t happen overnight – they can take months or years to bear fruit, and as mentioned earlier, the potential for employees to worry about their status in the company is high. You don’t want to lose top talent who can’t cope with work in the balance, so stay in communication and stay open about the process. You don’t have to lift the situation up and make big promises that cannot be kept in the time frame you set.
6. Consider the impact on customers
As with your co-workers, the distance between your customer and the situation itself can create a lot of confusion – and sometimes worry. Working out a plan for when and how the details of the merger should be released – and using nondisclosure agreements up to that point – can make the process a lot easier and clearer for everyone.
7. Know your worth
The terms proposed by a potential merger are not always favorable – or even terribly desirable to you. It’s easy to write this to meet high expectations, but in many cases negotiating better terms starts with understanding your worth and the value your business has to its.
8. Set goals
As mentioned earlier, a merger is a long process – one filled with paperwork, long phone calls and meetings, and a lot of back and forth between core business and talking to your legal team. You can’t plan everything, but there are a lot of goals that you can set and work towards to give the process a lot more structure. You can speak to your corporate attorney about this to develop a schedule of what to expect.
9. Consider alternatives
You don’t have to go through the rigors of a merger to move your business forward. Look at joint ventures, or partnerships, and the potential that so many companies have to grow without committing to a merger that can change the company’s culture and maybe even the direction it is going.
10. Be ready to go away
There is no point in agreeing to conditions that you are not satisfied with or a situation in which you cannot fully trust. Yes, it can take months to find another potential buyer, but that’s far better than agreeing to a merger that you already think you could live to regret. The hallmark of a good merger is not that it completed within months of the first hint of interest; It is a company that is able to get through the early days and achieve great success in the years and decades to come.