Effective Post-Sale Integration Tips When Selling a Business to Merge With Another
Integration of businesses after a merger can be rapid and simple or it can be very complicate.
Tip: Respect the Complexity and Cultures
In more complicate scenarios, integration requires combining complicate business ecosystems. Ecosystem is a powerful description because a business is not just a separate entity. It interacts and depends on many things outside of it that a sale and merger can impact.
When you combine firms, it’s combining cultures and establishing new norms. It could require change within every function of both organizations, and will definitely include a blending of two organizational cultures.
It’s been my experience that the impact of different cultures is frequently underestimated, but I have a great visual I would like to paint in your mind right now that perhaps would illustrate the problem.
We were working with the merger of two companies that in the end resulted in a Fortune 200 firm. It was a larger extent effort. And here’s the visual to capture the cultural issues: one had a culture like cowboys and another had a culture like Quakers. Think about that. Can you imagine these two groups working together smoothly at first?
We did successfully integrate the two over time, but you can see how important understanding how cultures work is to getting the work done.
Tip: Understand the Odds Are Against You, And Plan to Beat Them
When done correctly, when firms are integrated, customers, partners and employees stay engaged. Sales move forward. Productivity doesn’t suffer.
However, unfortunately, a majority of mergers never meet management strategic and financial expectations.
Maybe you’ve heard some of the statistics. They are not pretty. A shared statistic is that 30 percent of mergers do add value, 31 percent destroy value, and in 39 percent, there’s no advantage or difference for the merged entities.
In sum, it method that only 30 percent do add the expected value and 70 percent do not. To avoid that shared fate, you have to understand how easily it could happen to you and the business you have built over the years. You have to actively work to mitigate that.
Integrating your business after a sale requires clear and realistic goals, focused leadership and superb execution. And be realistic. If the deal sounds too good to be true, it probably is.
Tip: Determine and excursion What You Want Your Post-Sale Role To Be
You and the new owner will need to design your current role and work in concert as you both consider appropriate. What are your goals for your future? Can you realistically move from business owner to retiree? Selling a business method losing what has given you pride, purpose, structure and relationships for years. What will replace it? A assistance for merging businesses is that you could create an exciting new role for yourself.
Tip: Understand the Merger course of action
already if yours is a limited involvement, you need to know what to expect during the merger course of action. For example, in the best case scenario, the time of action of integrating two businesses should begin when you decide to sell to and merge with another firm. It really should influence your thinking, your preparation, your decision making. At the start of the selling course of action you should begin to think about how to integrate your business with another.
Always start with your goals. It’s your business. Start with your goals for the sale and how being acquired will meet them. clarify possible acquirers and conduct due diligence on them just as they will on you.
With a more complicate and thorough integration, where the organizations are considerably merged as opposed to just connected, you will work by how to assemble the various elements of the two organizations – the complete business ecosystem mentioned earlier.
Keep in mind that managing integration requires oversight, assignment of responsibilities, staff to execute that, a goal that marks completion in the timeline. And you already have a complete time job. Be realistic about how you’re going it make all this happen, and get the appropriate sustain in place, whether it’s additional experts, training, or other resources.
You’ve worked very hard to bring this business to a point where you can sell it, so don’t look at it as a do-it-yourself project.
Make sure you get the sustain you need.