Businesses continuously search for ways to grow their businesses through hiring top talent, expanding their markets or upsizing their company. Although these objectives seem like obvious strategic goals, many businesses face continuous challenges while trying to achieve them, especially without proper planning. If a business wants to achieve their strategic goals pursuing a Merger or Acquisition (M&A) may be a step in the right direction to achieve growth and/or talent.
A Merger or Acquisition (M&A) refers to the consolidation of companies through various financial strategies between two companies. These two terms are often used interchangeably, yet have different meanings. A Merger may be when two companies/firms form a new legal entity under one sole name, whereas an Acquisition is a single company purchasing another.
If you are considering pursuing an M&A for your business, below are five ways to maximize the benefits of M&As:
- Growth and Expansion. It’s no surprise businesses who pursue M&As communicate their hopes of the deal becoming a growth pipeline. With the consolidation of companies, products, people and strategies; the hope is to see the business achieve new financial heights. Whether you are looking to develop in a new market where your service is not currently available, or challenge current competitors in similar markets, prepare to see challenges during the process. These challenges could be learning your new customer base, developing more complex products and services, managing a greater number of employees or figuring out how to differentiate from the competition.
- Inherit Top Talent. If your company is looking to grow in size physically, you’ll need to consider who will be filling these roles to keep your business successful. If you’re pursuing an M&A towards a company in the same market with quality talent onboard, take them with you. Acquiring top performers can add value to your current skillsets through collaboration and finding new avenues to success. It’s much easier to fill a role with current talent than to hire new individuals. Plus, these individuals may just have the fresh answers you need when developing in a new market. Related to this is the importance of cultural synergies. Acquiring a company with a different culture is the No. 1 reason acquisitions fail to achieve business objectives. It takes time and expertise to ensure the talent and culture fit your business.
- Integrate New Technology Trends & Software. As technology advances, so should your business. When considering an M&A, cross-check what software, workflows, and programs the current business was using and see how these can be implemented into your business. With growth comes new approaches to how you do business. Finding ways to streamline your business efficiently across additional service lines is a key factor in whether your business will be successful with a greater market reach. All in all, strong back-end technological support equals greater chances of company growth.
- Develop in New Global Markets. Integrating a new market into your business will expand your customer base wider than ever before and increase your market share. When acquiring a new business, check to see if they have distribution channels/systems targeted at their customer basis and how you can utilize these for your existing customers. This integration will allow your business to expand further into existing markets while reaching new audiences. Having effective channels will benefit your business strategies by saving research time in markets you’re unfamiliar with.
- Reducing your Competition. Plenty of businesses market the same goods and services as yours. How you manage your business will make an impression on your customer base. Your business and marketing strategies should go hand-in-hand—if your goal is to offer quality service, communicate this through a slogan or integrate it within your marketing campaigns. By having these strategies in place, you can differentiate yourself from the competition, and maybe even have the opportunity to acquire them. Take time to craft your marketing techniques and be sure the individuals in those seats can bring your business to life. If you are ready to take the next step in growing your business, our KerberRose trusted advisors can coach you through the M&A process. Our trusted advisors are knowledgeable and will help you make decisions best representing your business goals.
Some of the M&A services KerberRose can guide you through include:
- Assisting with negotiations and due diligence
- Completing culture assessments and integration complexity
- Creating the integration plan and assisting with the integration
- Determining tax implications
- Developing and planning the transaction strategy and target opportunities
- Locating, valuing and serving as a contact point for acquisitions
- Performing business valuations
- Providing onsite assistance once a transaction is completed
Reach out to a Trusted Advisor, or view our advisory services to begin the process today.