Growing your business isn’t an easy task, but it’s an essential piece to long-term sustainability. While you might be comfortable growing within yourself by offering more services, hiring more team members, or expanding your reach with new locations, sometimes acquisitions are the best solution. Acquisitions are effective because you can essentially narrow the competition in your market while expanding your reach. At NFA Consulting, we can help you navigate the choppy waters of business acquisition and program management. Get started with our guide below that offers five things you should consider during an acquisition.
How familiar are you with the company?
If you’re planning to acquire one of your competitors, you might feel that you’re familiar with how they operate, what they’re about, and what sets them apart from the competition. Do your homework on the company to identify the areas that you want to keep the same or improve upon. Many people are uncomfortable with sudden sweeping changes, and not identifying what needs to change with a plan in place can turn a lot of people off to the new boss.
Take a look at how the numbers match
You might be in conversations with a small business owner who’s eager to sell you their company. The energy can be infectious and make you want to dive in right away. Before getting too deep into the process, ask if you can take a look at their books. Verify that the numbers that the owner has been providing you about profitability and growth match. Ensure that you’re not getting yourself into a situation where the company is so far underwater that the surface isn’t a thought anymore. If you’re unsure about the numbers, have your accountant look over them.
How the acquisition strengthens your brand
When you’re acquiring another business, it’s crucial to understand how their brand will work with yours going forward. No matter how much rebranding you do on the previous company’s behalf, the public perception will still associate a particular location or area with the previous company for some time after the acquisition is complete. Consider how the previous brand works to strengthen yours, and vice versa. If your brand is the stronger of the two, let the owner know what your reputation will do to help their business as they’re kept on staff or a transition is made.
Company culture and values
A company with a bad reputation because of poor customer service or an inability to follow through on promises made to customers can be a poor acquisition. Yes, you can likely come in and change the company culture and values by weeding out the bad apples and replacing them with people who fit your standards. But this can sometimes rub people the wrong way who have been with the previous company for a significant number of years as you’re not demonstrating any loyalty to them or their peers. Weigh the culture and values of a company before moving in for acquisition. If you plan to move forward, implement a program that will help to change things in your favor.
Remember the people involved
There’s something to be said for loyalty in an acquisition. Remember that there are people involved when acquiring a new business. You can earn significant credibility with your new staff right away by keeping in mind the years they’ve put into growing the company you just acquired. Clearly lay out your expectations for the team and your program for the future, so they know what to expect going forward.
Reach out for more
Don’t start an acquisition and program management without getting in touch with our team at NFA Consulting. We offer expert advice in acquisitions for business owners looking to expand.