How To: Successful Small Business Mergers

Your future success strategy may include merging with another company. Here’s how to get prepared for mergers:

Make sure you’re ready financially

Asses the value of your company and determine if you have sufficient liquid assets to engineer a merger. If you come up short, seek expert advice about your funding options.

Consider your funding strategy

Depending upon your liquidity, cash flow, credit score, owned copyrights and/or intellectual property, etc., you could fund the merger with your cash, seller financing, company stock, etc.

Examine your goals

Perhaps you’d like to add new markets, offer additional products or services, and/or dominate your market. Knowing your goals helps you to identify merger targets and make smart decisions throughout.

Assemble the experts

Line up a transfer agency (to help HR and legal staff prepare for mergers.) Talk to your corporate lawyer and bank to properly structure your deal.

Identify noncompetitive targets for mergers

Select another business/owner with similar financial and organizational goals. Sign a noncompete agreement to help ensure the viability of your new, combined business.

Do your research

Due diligence must include financial audits, operational evaluations, assessments of the company’s legal situation, debts, potential or existing tax problems, technology resources, staffing coordination/redundancies, employment agreements, supplier contracts, and customer bases, to determine suitability for a profitable merger.

Delineate responsibility and shares

Decide who’s in charge and put it in writing.

Form your new identity

You could hyphenate, combine names or come up with a completely new corporate identity.

Call on your implementation team

You’ll likely need additional experts (beyond those mentioned in #4 above) to see you through your transaction, investment details and more, so that your new, combined company start off right.

Keep lines of communication open

Release sufficient info to staff to maintain morale, while keeping certain details under wraps.

Let Growth Lending Group help you fund and manage successful mergers. Contact us today.

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