Are you considering the idea of acquiring another business in the future? If so, there are some things you should consider before jumping right in. Beyond the obvious things like budgets, services, and employees, you should take a full look at the entirety of acquisitions and mergers.
As Acquisition Assistants, Gift CPA supports businesses looking to expand and grow through an acquisition. When we work with business owners, we chat through these 5 things to consider with our clients before getting started. We encourage you to do the same!
Looking at the business you’re preparing to acquire, ask yourself if your company values align. While new processes and operations will absolutely change, the culture of a business doesn’t change overnight. Is the current culture one that aligns with your vision and mission? If not, you may want to consider a plan for cultivating a culture that aligns with your values. This could include employee benefits and perks, open communication practices, engagement and team building outside of the office, and more.
Reasons Behind The Sale
If you haven’t taken a moment to yet, consider why the current business you’re looking to purchase is for sale. Do you have a personal relationship or connection to the business? If not, you may want to dig deeper into why this opportunity is even in front of you. While many businesses are sold for a variety of reasons, understanding the reasons are key in your decision making.
If there is negative baggage that comes with the new business, this is something you will want to know about before making the acquisition.
It’s no secret that the accounting side of things can get a little confusing and muddy when a new business is added to the mix. From business accounts to names and more, it’s important to get your accounting items in order from the get-go as to reduce future confusion or issues down the line with things like business filings, taxes, and other reports.
Outsourcing your accounting where needed to keep things clean and organized from the start may be a good decision for you if accounting isn’t your strong suit and you don’t already have a partner on board to handle these areas.
Mediators And Advisors
Third-party mediators can help business owners expand their profitable businesses. If you are planning to purchase a business to expand your current holdings or dive into a different industry, using a CPA as an advisor is highly recommended.
What do mediators do exactly? An experienced mediator will help maintain momentum and alignment during the acquisition so that both parties are enthusiastic about the outcome and on the same page about next steps. In a delicate process like an acquisition, where the impact and investment are substantial, a good mediator will provide value indisputably, so we highly recommend looking into a partner.
Branding and marketing help tell the story of your business – so it’s important that your merger strategy supports the newly acquired business and its existing stakeholders, too. Much like company culture, the transition of your merger has to be strategic and thoughtful. It’s not something that will just magically happen.
If you’re unsure of how to execute the transition, you may want to hire a consultant to help guide you through this process.
Have other acquisition questions? Contact our team today!