3 Mistakes You Don't Want to Make During a Business Merger

Going through a merger or acquisition can be a challenging time for any company. According to MarketSplash, 90% of surveyed executives state that mergers and acquisitions have become increasingly intricate and fraught with risk. While done strategically, combining two businesses can lead to growth and success. However, the process also comes with potential pitfalls you’ll want to avoid. Be mindful of these three common mistakes to prevent setbacks during your upcoming business merger.

1. Not Defining Leadership Roles

Failing to establish clear leadership roles early on is a misstep companies frequently make when merging. Not designating who will fill what position in the new organization can create confusion, tension, and power struggles. Be sure to map out the leadership hierarchy right away, so everyone understands where they stand. Communicate roles and responsibilities openly with internal staff and external stakeholders. When leadership isn’t defined, day-to-day operations and big-picture decisions grind to a halt. Avoid this snag by setting expectations for management from the start.

2. Neglecting Company Culture Considerations

The culture of the newly merged company will set the tone for success. However, many businesses gloss over culture integration when planning mergers and acquisitions. Failing to get aligned on company values and norms can brew resentment between teams. Make culture a priority from the beginning by outlining shared visions and values. Address any differences in work styles head-on through open discussions. Create opportunities for team building between staff. Investing attention into blending cultures will lead to smoother daily workings after the merger.

3. Not Conducting Due Diligence

Every merger deal requires thorough due diligence before signing. But sometimes executives get so focused on deal terms that they overlook due diligence. Insufficient screening of financial statements, operations, contracts, compliance, and other areas leaves you vulnerable post-close. Don’t let your desire for rapid deal completion lead to sloppy prep work. Engage financial analysts and legal advisors to comb through every detail with a fine-tooth comb. Identifying any red flags or dealbreakers beforehand protects your interests in the long run.

During an exciting business merger, it’s easy to overlook certain steps in your eagerness to combine forces. Avoiding these key pitfalls will help your integration go smoother. Managing leadership, culture, and diligence proactively paves the way for merging as seamlessly as possible. Keep these priorities top of mind as you embark on blending your businesses into a successful unified entity. With diligence and care, your upcoming merger can catapult your growth to new heights. Our business brokers can help you with mergers and acquisitions to ensure everything goes off without a hitch. Reach out to us today at Kingsbridge Brokers to learn more.