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Business Merger – should you consider it?

Business Merger – should you consider it?Businesses frequently merge with other businesses when a growth opportunity for both is present. However, it is wise to carefully consider a long term strategy before jumping in with both feet. You need to consider what your future goals are and what is needed to realize them.

The most important thing to remember about business mergers is - if your business is not already thriving, a merger won’t help you. You need an avenue of "organic growth" on your own, before a business merger can benefit you.

Having a realistic and professional valuation of your business is paramount!

Most business owners do not :

Even though rational valuation is essential, it’s not just about the monetary value. People will not buy or merge unless they think they’re getting "real world" value. Future growth potential is what keeps people interested in a business merger. Succession planning is a big factor here. Each business needs to be able to reinvent itself and evolve, but many companies put off this kind of planning.

A successful merger absolutely requires strong leadership; leadership that recognises when you need to merge or acquire (or possibly, be acquired) and is capable of communicating goals effectively and acting promptly.

Most businesses never do more than one business merger in their lifetime, so failure is commonplace. We present you with a checklist to help you review major concerns before merging with, or acquiring, other businesses. Answer them all before entering into any mergers or acquisitions. Decide what you will not negotiate and plan to stand firm. Also, answer the question, why do you want to enter into a business merger - or become acquired. Is it to acquire new capabilities, increase profits, offer new services or expand your territory?

Financial Considerations of business mergers & Acquisitions

How will this merger or acquisition help you realize your strategic goals? You need to spend a lot of time on this one. If you can’t answer that question, there is no reason to merger.

Business Merger Issues Involving Personnel

For best chances of success, work these issues out before forging ahead with a deal: