Acquiring businesses is one growth strategy that many companies pursue. This strategy reduces competition, increases customer bases and allows for the acquisition of highly talented and experienced staff. However, nearly half of these acquisitions fail. Therefore, these are a few business acquisition tips.
Consider All Growth Strategies
Lack of planning is a key cause of acquisition failures. Therefore, you should first consider all possible growth strategies. If you choose to cross one off the list, clearly state why. You need to understand exactly how the acquisition will help you expand your company and what other benefits you will gain.
Clearly outline your motivation for the acquisition. Why did you choose to purchase another company rather than build on your own? Do you hope to gain market leadership, eliminate competition, etc.? Does the new company produce the same, a similar or a complementary product?
Build a Solid Plan
Then, you need a solid plan for every stage of the acquisition. Outline your expected financial outlays. Discuss what you will do to merge your staff. Will you need to adjust the production of either company? Also, create a schedule and clear steps for each part of the acquisition process.
Once you create your plan, you need an execution strategy that follows it precisely. Don’t forget to set achievable goals because they direct your actions, as well as those of your staff, and they can serve as motivation during challenging times.
Evaluate the Assets of the Company You Hope To Acquire
You also need to conduct a full evaluation of the company’s assets, especially technology and talent. You will probably gain valuable software and hardware assets. In addition, you should review the talent you will gain. Some professionals will have highly specific training and experience, while others may transfer well to other companies or operations. Your job is to find ways to find uses for everything you purchase with the company.
Once the acquisition is completed, you need to integrate your companies as quickly as possible. Therefore, adapt and apply any technological assets immediately. Also, review all of your staff’s expertise and find ways to merge this knowledge into your existing company. Encourage the collaboration of all your staff members. Encourage innovation through team diversity and an inspirational environment. Focus on motivating your team.
A business acquisition is not an easy process. It can have many complications and can put a strain on your company. However, consider following these tips to improve the process and your probability of success.