Business mergers are supposed to be a combination of forces that yield company that is supposed to be greater than the sum of its parts. At least, that is the theory. Many business mergers fall apart before completion because the owners involved have not taking the following things into consideration.
Business Mergers And Disparate Cultures
Entrepreneurs involved in business mergers usually focus on all of the positives. A merger might give one business better brand recognition, while others gain assets, or highly talented individuals. What many business owners do not take into account is how the corporate cultures will blend once the merger is finalized. One team may be extremely talented, in part because of the work environment. If that changes, or new leadership clashed with how the team operates, the end results will be far from productive. Always perform some in-depth observations of the corporate culture of the company before considering a merger.
Who Gets What In Business Mergers?
Business mergers rarely see everything split down the middle. Some heavy discussion needs to take place to decide each owner’s percentage. There are other considerations, as well, which can become points of pride and cause mergers to fall apart. Which company name is kept after the merger? Does the merger lend itself to a new and marketable name altogether? Will there be a board of directors, and who is going to be on it? Will there be total staff retention, or will some have to be let go? Business mergers are a lot like marriages, and open discussion about these little things need to be hashed out well in advance to have a successful meeting of the minds.
What Will The Accountants Think?
A business merger involves way more than a handshake over good ideas. Accountants need to be brought into the agreement to go over assets, liabilities, existing debt, and a number of other aspects which will impact finances for the owners, and the new business entity, once the agreement is signed. Even little things, like duplicate equipment and how payroll will work can add up and cause a business merger to go under.
Financing Business Mergers
Business mergers usually need financing to carry out the agreement smoothly. Vortex Funding specializes in financing business mergers. Our team of experts will conduct an in-depth analysis of all parties involved, to ensure a painless and successful transition at every step of the process. Contact our offices today to learn more.