“If your business is one where merging might be an option, this can make sense and be advantageous…”
As scientists would be quick to confirm, oil and water do not mix. At best they will emulsify creating a treacle that will neither quench your thirst nor stop onions burning in your frying pan.
However, blending two oils in such a way that together this enhances their usefulness, and you have the makings of a productive partnership.
This is a dilemma you may find yourself in, if you are considering merging your business.
As the opening analogy suggests, care needs to be taken to ensure that you are going to get on with your proposed new partner. They may demonstrate brilliant progress in building their present practices but be a ‘difficult’ person to work with.
Your best bet is to work together on projects for a period of time and then consider more formalised merger negotiations if no warning signs become apparent.
Returning to our opening remarks there has to be synergy between the merging businesses. You need to be able to communicate effectively and ensure that both parties can align on key issues.
Otherwise, you may be faced with an expensive unpicking process as you watch your frying pan burn.
Here are 10 steps to make your small business merger successful:
- Compare and analyse the company structures
- Determine the leadership of the new company
- Compare the company culture, mission and vision of both companies
- Determine the branding of the new company
- Analyse all financial positions
- Determine operating costs
- Do your due diligence
- Conduct a valuation of all companies
- Be transparent as possible throughout the process
- Keep the momentum going
If you would like to talk through your ideas of merging your business or for some friendly, impartial advice about how you can make your new partnership work – get in touch.