For A/E firm owners, the process of buying or selling a firm can feel all-consuming, even when you are working with a knowledgeable M&A advisory firm. There are so many considerations and points of negotiation beyond simply the sale/purchase price. With all that hard work and anticipation, the day that you ink the deal can start to feel like a finish line of sorts – kind of like a wedding day. And no doubt, weddings are cause for celebration! But just like in marriage, if you want your merger or acquisition to be successful down the road, the real work is just beginning.
Most people who get married have put a lot of thought into their future together before the day they say, “I do.” They have probably figured out a combined living situation, discussed how to handle their joint finances, and introduced/integrated other family members – kids, pets, grandma, etc. It amazes me how many firms get to closing day without having a similar plan in place for how they will operate moving forward. Without such forethought and planning, firms are putting themselves at increased risk for failure of their deal down the road. Most studies, including those by Harvard Business Review, show that between 70 to 90% of M&A deals fail. But these deals don’t fail to reach the signing table. They fail three to five years down the road, resulting in huge financial, professional, and emotional setbacks for all parties involved.
Want to start off on the right foot with your merger or acquisition, and protect your investment for the future? Here are some of the key considerations you should be planning for well ahead of closing day:
Operations & Project Management
What is the end goal for the firms – to be integrated as one entity or to remain separate? What policies and procedures are different between the two firms, and what will they be going forward? What contract language will be used? How is overall firm performance measured? What is the expectation for utilization rates? Is training required to bring everyone up to speed?
Accounting & Finance
What accounting software will be used moving forward? How much time is needed to transition to the software? What training is needed? How will you bill clients in the meantime?
Business Development
Who is responsible for generating new work? What are the business development goals, and how will you hold people accountable for them? How will marketing support business development efforts?
Communications & Marketing
How will you communicate news of the deal to employees of both firms? How will you announce it to your clients? To the public? How will you brand the firms – together or separate? How will you integrate and leverage both firms’ portfolios and expertise?
Technology
What software and hardware are being used by the two firms, and do incompatibilities exist? What technology investments are required to ensure everyone can work together? Who do employees turn to for IT support?
Human Resources
How can employees from both firms establish rapport with one another? How can we teach employees to work together to leverage their combined skills and expertise? How do we integrate two separate corporate cultures?
Your M&A Integration Journey
These are just a few considerations that need to be addressed during the M&A process – and the sooner, the better. Cultivate Growth Partners specializes in orchestrating this complex integration effort. We work with your existing business departments – Accounting, Business Development, Marketing, Operations, IT, Human Resources, etc – to develop a master plan for integration. With a proactive plan in place, you put yourself in a position to capitalize on your M&A investment and to achieve sustained growth in the marketplace.
Contact us today!
