Some 83% of mergers do not boost shareholders’ profits, according to a recent study.
Poor survey results like these might suggest that the odds of a successful merger are against you. Thankfully, 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 valuable asset - their staff.
Avoid this mistake, and you’ll have a high chance of boosting your new company.
How merging business owners neglect 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 bad news. Silence tends to unsettle staff, especially if it’s likely that their position could be under threat or their day-to-day job could change.
Positional changes handled without enough care tend to be 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 disengaging 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 is no such thing as over-communicating or over-preparing in situations like this.
You’ll likely have another company owner at your side to help you jump these hurdles. You’ll be co-owners, or one will work in an advisory role. It will be incredibly helpful to have the right partner by your side to help you navigate these potential pitfalls. Arguably, having the right partner is just as important as having the right companies merging. If there are significant disagreements that remain unresolved, 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 an extensive database of financial practice owners looking to buy, sell, or merge 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 securely and anonymously, only revealing the identities of your business when both of you see fit. Best of all, Succession Link takes no cut of any deal.
Click the link to find out more about how Succession Link can assist with your merger and acquisition activity.