Business mergers sometimes work well. Think about Disney and Pixar, or Exxon and Mobil. Other times, not so well. AOL and Time Warner, for example, is considered one of the worst deals of the century. What constitutes a good business merger? There are a lot of things. But here are three signs that two businesses will be able to merge successfully.
CEOs Avoid a Political War
When two CEOs merge businesses, it’s important to outline who makes what decisions and who gets final authority over what. Working this out before the business merger saves time and prevents a political office war. It’s hard to go from being in charge to not having a say, but it’s better to work this out before any papers are signed.
Full Integration or Not
Successful mergers occur in two situations. In the first, the two firms are completely separate and organizationally distinct. Each company maintains its own identity, but the merger worked behind the scenes. In the other situation, the two companies have a complete integration. Without a complete integration, there will be conflict between the two. You just can’t have a half-hearted approach.
Before two companies merge, they should look at their objectives and goals. Small businesses are usually driven by profits and want stability. Startups are focused on quick growth and salability. Putting these two styles of businesses together would be difficult under most circumstances. But other aspects of culture may come into practice. A company that works individually may have a problem merging with a company that has a team-oriented approach.
But It Could Work
Business mergers work when the leadership really works to bring two companies together. It takes a plan and team who want to work together. Bear River Financial offers financing options for your business. Contact us for more information.