The process of selling your business can be a massive undertaking. It requires plenty of expert insight, as well as a bit of luck in finding the right buyer. No matter what type of business you run, though, or whom you intend to sell to, some tried-and-true principles should guide the process. Here are five key strategies for getting M&A right the first time.
Be Fair to Everyone
It’s easy to see things from your perspective alone when your financial well-being and the future of your company both hang in the balance. But a deal can only succeed if it’s fair to everyone. Buyers can tell when you’re not considering their perspective. So save yourself time and effort by empathizing with their needs and finding ways to meet those needs. The best deals are fair to everyone.
Understand the Importance of Culture
Your company culture is complex. It’s not something you can force or coerce. It’s subtle—all the things that everyone does without thinking, but that govern every decision. Culture shock can be a serious problem, especially when company culture is important to your team. Managing cultural shifts demands exceptional communication, as well as an awareness of the unwritten rules that govern both entities’ cultures. Build your integration plan around managing culture changes and you’ll be less likely to lose key team members.
Reputation is Everything
You’re only as good as the last person oyu interacted with thinks you are. A good reputation can increase the value of a merger. And the way you behave during the merger may help drive a better reputation. Be excellent to everyone, at all times. You never know when you’re interacting with a potential buyer or a high-value customer.
Understand When it’s Time to Walk Away
Not every deal is worth seeing through to completion. The sunk cost fallacy, however, convinces many dealmakers to persist with deals that are just not worthwhile. The fact that you’ve already invested time and effort in a deal does not mean that continuing to do so is in your best interests. Be prepared to walk away if it looks like a deal just isn’t going to work out. Don’t throw more good money after bad.
Get Buy-in From the Right Stakeholders
Every company has key players. Sometimes it’s apparent who has power on paper. More typically, though, the most respected individuals in a company have institutional knowledge, a long history with the business, or a stellar reputation. These are the people you need buy-in from, and your buyer needs to understand their important role. In some cases, you’ll also have key stakeholders—important customers, suppliers, or partners—whose buy-in can make or break the deal. Begin working with these parties early, and treat them as the VIPs they are.
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