Some 83% of mergers do not boost shareholders’ profits, according to a recent study.
This might suggest that the odds of a successful merger are stacked against you, but there are predictable patterns among the 83% who regret their decision to merge.
One of the biggest reasons why mergers fail is that the business owners neglect their most important asset - their staff.
Avoid this mistake and you’ll have a great chance of boosting your new company.
How merging business owners neglecting their staff
It is the staff who are responsible for maintaining client relationships, ensuring operational efficiency, and creating an overall great experience with your brand.
Yet, business owners continue to create unrest among staff by failing to communicate fully during the merger period.
In an environment like this, no news is typically taken as bad news. This tends to unsettle staff, especially if it’s likely that their position could be under threat or their day-to-day job could change.
When these positional changes aren’t organized with enough care, that’s almost always poisonous to future growth.
Without the proper research, communication, and training, the staff ends up performing in positions they don’t enjoy - and ultimately end up leaving. Those that remain end up in a disengaged environment.
The best strategies to maintain an engaged workforce during and after a merger is to communicate as often as possible, and to start the repositioning process as early as possible. There really is no such thing as over-communicating or over-preparing in situations like this.
It’s likely you’ll have another company owner at your side to help you jump these hurdles. You’ll either be co-owners, or one will work in advisory role. Needless to say, it’ll be incredibly helpful to have the right partner by your side to help you navigate these potential pitfalls. This is arguably as important as having the right companies merging together. If there are major disagreements that can’t be resolved, it’s usually worth walking away. An individual who is on the same page as you when it comes to the future direction of the company is an essential tool for a successful merger or acquisition.
Succession Link provides a platform that makes it easy to locate the right business and owner for successful merger and acquisition activity.
We have built a large database of financial practice owners looking to buy and/or sell their practice. You can browse the thousands of high-quality members and preview our useful search filter functions that make it so easy to locate the correct candidates for your needs.
If you decide to upgrade, you can reach out to these candidates in a secure and anonymous manner, only revealing the identities of your business when both of you see fit. Best of all, Succession Link takes no cut of any deal that is formed.
Click the link to find out more about how Succession Link can assist with your merger and acquisition activity.