3 Steps for a Successful Acquisition
Acquisition of businesses is a strategic process that can take months (and even years) to realize. M&A is a key component of growth for businesses of all sizes. While every acquisition is slightly different, there are common steps that companies should follow to ensure that the deal is likely to being successful.
1. Define the strategy.
A solid M&A strategy will contain a clear understanding of the goals you want to accomplish, including revenue growth and client expansion as well as exposure to new clients. It also includes a thorough financial evaluation that will include your current financial situation and market projections.
2. Conduct searches.
Due diligence is an important component of M&A. It involves double-checking the financial documents and conducting searches to find out whether there are tax liens or litigation. It’s also a good idea to examine the social media presence of the company as well as review sites and testimonials for an understanding of the way it operates.
3. Find red flags.
While the temptation is to search for deals that will “rock the world,” it’s important to be real about what your objectives are and how they will align with your resources, and whether the culture of the target fits with your own. Additionally, you shouldn’t be so eager to make deals that you disregard any red flags that emerge during due diligence or the integration and change management process.
