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Ready To Acquire?

Post by Admin , Sep 19, 2019.
Business Consultancy

Are you or your business seeking expansion and have decided that an acquisition is an option for you to explore? Have you considered what your acquisition strategy and how you will approach your target market and more importantly who you need to approach? Are you sure that your business is ready to acquire and who will you involve ensuring it is a success?

There can be several reasons why a business may want to acquire some of which will be:

  • Revenue Growth

  • Access to additional resource and skills

  • Strategic acquisition to remove a competitor or to gain a competitor’s client base

  • To move into a new geographical location

  • To expand service offering into new areas

  • Acquiring technology that your business needs and another business has.

  • Gaining economies of scale through merging a competitor with your business and enjoying a merged and therefore more cost-effective resource base

There can be no doubt that each of these can be achieved through an acquisition and undertaken correctly an acquisition is often the quickest route to achieving your desired result as it should accelerate your plans.

Growing organically, for some, takes too long and the initial return on investment outweighs the risks being taken. Organic growth tends to take time and builds momentum, it is not always possible to confirm the results quick enough to justify the time and money being invested.

Part of the acquisition journey is to ensure that your own business is ready to acquire. Often overlooked, this is an essential step in the acquisition process. A business that acquires when that business itself is not ready is heading for a potential disaster as issues or problems in your own business will simply be amplified by an acquisition.

It is sensible, if not critical, to analyse your own business before you take on the challenge of an acquisition. The steps to take should include: -

Why acquire

What are the primary reasons for making the acquisition? When established you can confirm what you expect to achieve from the acquisition and protect your goals to ensure they are realised.

Review your systems and processes

Take a hard look at your own systems and processes. An acquisition will be straining on these and they need to be healthy. You will also learn from the acquired business and they may have systems and processes that are an improvement on what you do. Understand what you are doing and approach the acquisition with an open mind. There is always room to learn and improve.

Review your plans and targets

Review what your targets and plans are and how the acquisition will impact on these. They may need revisiting if an acquisition was not part of the strategy when written or if included was the targets you set realistic and does it need adapting. Acquisitions can sometimes force you to take a step back to go forward so make sure your plans reflect the reality and ensure any changes are well communicated.

Contemplate the outcome of the acquisition

What is the expected outcome of the acquisition? Much of this will depend on the reason you sought the acquisition in the first place but being very clear about what you expect the outcome will be enables you to take action to ensure you get there and importantly direct the necessary time, resource and finance to ensure the acquisition is successful. You will also need to identify change in your own business and plan for how that will be handled.

Consider the impact

Look at the overall impact on your business. Where will your current business will be affected and where will the acquired business be affected. You need to protect your investment and that is not just the incoming company, you have invested in your own business and you need to make sure both come out as strong as they can be and in a time scale that works. Impact may be across several areas of your business and you need to ensure that you appreciate what these are and prepare for them.

Look at your People

An acquisition brings change and change brings uncertainty. People in both organisations are going to be affected (jobs, systems, ways of working etc) by the acquisition and you need to ensure you are ready to communicate when you need to and answer the important questions to keep the people you need to onside. It is often the case that roles will change, and, in some cases, positions will be removed, and it is important to address such elements properly. Also consider who from your company will be involved in the acquisition process and the time they will take to do so and how their current role may be affected by the additional work they will now undertake.

Consider your technology

Consider the technology you have and the technology of the incoming company. You need best of breed and there may be technology in the marketplace that you can make use of, your acquired business may have technology you need, or your business may have technology to deploy unto the acquired company. Make sure you are up to date on what is available to you and what is being acquired and plan for effective deployment.

Timing and Resource

Consider the time that you are prepared to allow for the acquisition to take and the resource needed from your current business to achieve that. Once the acquisition has occurred, the hard work starts. The integration! In most scenarios there will be an integration project and experience show that the quicker this is completed the more successful the acquisition will be. Set out an implementation schedule and ensure those involved are aware of expectation and the project timelines and monitor performance against these.

Making sure ‘your own house is in order’ will help you secure a successful acquisition and will certainly make your stronger.

It may assist gaining the support and guidance of an independent expert. At Mr Green Consultancy we work with businesses preparing them for acquisition and assist them through the acquisition process from identifying and approaching targets through to due diligence, negotiation and implementation.

To find out how we can help you are your business contact us on 02078421825, you can email us or you can complete and online enquiry by visiting our website.