How to make an acquisition work for your business

When it comes to growing your business, mergers and acquisitions can be a great way of expanding your pool of talent. Not only is it often faster than expanding organically but it can also be much more cost-effective.

That being said, when it comes to properly integrating a business, there can be a lot of things to think about. This process often requires a broad array of resources, experience, and skills that you may not realise until the process is already underway.

With so many things that could become an issue, if you want it to go smoothly then it’s important to plan ahead. Read on to find out everything you need to know about how to make an acquisition work for your business.

Ensure that the target fits in with your overall vision

There are many good reasons to consider an acquisition, such as enlarging your pool of talent or increasing your market share. Whatever your reason may be, it’s important to ensure that it fits with your company’s overall long-term vision.

Obviously, the goal of any acquisition is the hope that the two companies will become greater than the sum of their parts. This is why you should always carefully consider whether the move is right for your needs.

While you can reap a variety of benefits from a successful merger, if you want to be able to do so with confidence then it’s essential to thoroughly research the firm you’re hoping to acquire to see if they would be a useful asset to your company.

Make sure that your business is ready for the acquisition

As you may know, trying to organise an acquisition without having the necessary resources in place can be a significant gamble. According to a meta-analysis published in a 2016 academic paper, the average mergers and acquisitions success rate stood at only around 50%.

Typically, there are two main risks to consider. The first and most obvious one is that you are potentially risking the capital that you’re investing, which is likely to be a significant amount.

However, the second risk can be much more serious. If the acquisition doesn’t go well, it could seriously strain your company’s existing infrastructure, which may have a knock-on effect on your operations.

This is why making a comprehensive plan is essential if you want the process to go smoothly. Not only do you have to consider the economic aspects of the acquisition, but you also need to think about:

• The best interest of clients
• Replacement business
• Any potential conflicts of interest.

Make sure that people communicate properly to encourage integration

Once you’ve done your research, made your plan, and the acquisition is underway, the next step is to thoroughly integrate the staff of the two companies. This can often be the tricky part, so it’s important to get it right.

Different companies obviously have different workplace cultures. While you’re probably proud of the one that you’ve cultivated, it may take some time for the new members of your team to adapt. Of course, this merging of cultures isn’t always a bad thing, as it can sometimes be a useful source of positive change.

One piece of received wisdom that you may have heard is that a merger can be a bit like a marriage – there is always some give and take. That’s why, when you’re integrating the new co-workers into your business culture, you might want to see what you can learn from them.

At this stage, it’s also important to encourage good communication as there are always sensitivities in these situations and you wouldn’t want to cause any misunderstandings. Making sure that your team members are all communicating properly can help to make the acquisition run much more smoothly.

In the long term, properly integrating teams helps everyone to benefit and that’s why it’s important not to rush this process.

Remember to focus on how it will affect your clients

The final thing that you need to bear in mind during an acquisition is how it will affect your clients, both existing and from the new company.

As you might imagine, the newly acquired clients may have understandable concerns about the change. This is why it’s important to reassure them that the change is benefiting them – not only will they have the same trust and intimacy as they had with the old company, but they can now get access to new perks too.

This is obviously why it’s so important to properly integrate new teams, so that they can continue to maintain their existing relationships. Finally, it’s also crucial to stress to your existing customers that the change won’t impact the high level of service that they’ve come to expect.

Get in touch

There can be a lot of financial implications that come with a successful acquisition, which is why working with a financial planner can benefit you. If you want to ensure that the process runs smoothly, we can help.

Email enquiries@rosebridgeltd.com or call us on 01204 300010 to find out more.