GROW OR GO!
As we start to move towards a return to our ‘new normal’ post lockdown. A lot of business owners may need to make that tough decision whether to grow or go!
Businesses had to evolve so much in the last 12 months, this might have been pivoting to moving online, changing their logistics to do home deliveries or going through the turmoil of furloughing their teams and relying on grants to survive.
You now need to take some time to really consider your future and the future of your business.
Are you ready to go back into the ring for the next round or is it time to consider selling your business?
Making that decision is really tough, full of emotions and guilt. I have helped over 200 business owners who had the exact same feelings. The outcome….was relief. Relief that they now had more time to spend with family. Relief that they were able to turn their asset into cash and move onto retirement. Relief that the legacy they had built would continue to grow under a new team with the same values.
You typically only sell a business once so you are not expected to know what is involved. That’s why you need a team of experts.
I watched an interview recently with 3 “deal kings” of the world of M&A in the tech industry.
These were the Acquisitions and Integrations Directors of Microsoft, Google and Cisco. They have carried out £billions of deal value.
But what I discovered was the experience everyone in M&A goes through from doing their first deal to doing their 200th deal in my case, is the same.
We all started at phase 1;
Phase 1 – Where the company decides to buy a business, they haven’t done it before and they go into thinking because they know how to run a business, they know how to buy a business! What actually happens is a massive learning curve. They find out really quickly that the most important value in the acquisition is the team and the clients and that you need to get a really early insight to prepare sufficiently for change management in order to have a successful result.
Phase 2 – The company decides to do more acquisitions and realises from the learnings from the first deal, that they need an Integrations Manager to deep dive into the deal before it completes and oversee the transition from one culture to another. The other departments such as HR, IT and Finance start to learn what is needed to integrate a business into the existing structure but they are trying to do this around their day jobs.
Phase 3 – This is where the company becomes more acquisitive as a strategy. They recognise they need a dedicated deal team with an Integrations Manager that is the ruler over the plan from the pre deal phase right through to 1 year post completion. The other departments start to recruit dedicated roles for the onboarding functions as the board realise the value added to the bottom line from a well managed deal. In fact 35% of synergies are discovered after completion and experience allows you to spot these opportunities early on during the due diligence phase. In fact, many of the companies I have worked with, have failed to recognise this, only focusing on scrutinising the numbers on the accounts and not looking deeper for operational opportunities.
Phase 4 – This is where the process starts to become a well oiled machine. The Integrations Team work closely with the board to find targets that fit financial and operational strategic goals. The sub teams become more aligned and start to work in sync, knowing their stage in the process. The teams regularly reconvene for continual improvement sessions to track learnings from the previous deal and tweak their processes to ensure that they can react quickly to the same event in the future. Through experience they start to spot trends in deals and have data to show what actions caused what outcomes.
Mergers and Acquisitions will never be a one size fits all approach and after integrating over 200 acquisitions I still learn something new with every deal. The message is this….if you want to achieve a successful sale of your business or embark on an acquisitions strategy, use a team of experienced experts. They understand exactly what is involved in the process and have overcome most of the obstacles along the way.
If you want help to buy a business/es or sell your business successfully take a look at our packages.