Business mergers can get messy. After all, when you’re combining personnel, workspaces, company missions, rules, and a hundred other things, there are plenty of opportunities for things to go wrong or misunderstandings to occur. However, if you follow these 10 steps while considering or undergoing a merger, you can make the process as smooth as possible.
1. Be able to articulate exactly how this merger is financially beneficial to you
This is the “thesis statement” of your merger–its purpose. Will it help you reach new markets? Does it add experienced leadership? How will you be better off post-merger than you are now?
2. Figure out whether it’s a “scale” merger or a “scope” merger
Scale deals mean you’re staying in the same fundamental business, while scope deals mean you’re expanding into new products or markets. Knowing which one you’re doing will help you do better research and planning for the merger.
3. Begin the integration process immediately
Ideally, you should make most of the major decisions before you even publicly announce the merger. This will help you handle it more efficiently instead of throwing both companies into chaos for months.
4. Form a decision task force
These are the people who will help you iron out critical issues and build a merger roadmap of everything that needs to be done.
5. Choose a strong leader for this task force
He or she will be the strategic glue that holds the team together. During the merger, this person will be solely dedicated to tasks related to successful integration.
6. Retain employees who share the new company’s vision
Most likely, you won’t be able to keep all the employees of both original businesses, so it’s better to keep the ones who are on the same (new) page. Fill leadership roles promptly so time isn’t wasted on speculation and gossip among current employees (and so your best candidates don’t jump ship early for fear of being downsized).
7. Blend your company cultures
This may involve some compromises. If one company has relied on strong top-down leadership and the other empowers their employees to make their own decisions, form a new organizational structure that allows for both management and individual innovation.
8. Focus on consistent messaging to win over everyone involved
Outline how the merger will help and what it will mean for both companies and the employees in them. If you’re not transparent, fear of the change can spread quickly.
9. Don’t get distracted from the core goals of the companies
During a merger, you still have clients to serve! Have the integration task force handle the bulk of merger-related tasks so others can continue operations as normal. Slowly transition from operating as two separate teams to operating as one.
10. Once it’s over, take time to evaluate
In case you ever need to do it again in the future, it will be helpful to have a record of what went right and what didn’t work so well. That way, you can fine-tune for a better merger or acquisition in future.
Need business funding while you manage a merger? Contact Norris Commercial Capital today.