What can be done to help ensure the success of a small business acquisition?

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Any acquisition can be daunting, regardless of the company's size. However, when it comes to acquiring a small business, integrating into your company is just different than with a large acquisition and certain considerations need to be taken to ensure its success. Through the following recommendations, you'll be able to address and resolve some of the pain points many firms face in this process. First, prior to finalizing the deal, and as obvious as it may seem, decide what it is you are buying. Are you buying the business itself, including its products and profits? Or are you buying the talent and intellectual property? Understanding why you want a small business is necessary for making decisions after the deal is finalized. Every choice, from how you integrate your firms to how to best manage your business and customers, comes back to the reason behind the acquisition.Second, at the heart of every acquisition should be the people - both at your firm and at the firm you’re acquiring. This is especially true in the case of small businesses, where the employees make up the DNA of the firm. Decide, before you close the deal, on who you want to retain and make every effort to keep them. Instead of focusing on inconsequential issues, such as when employees clock in and out, recognize the impact the acquisition is having in their lives. Give your new employees a reason to stay - whether that be through the use of incentives or other means - and show them why they should buy into your firm and the changes that you're making.Beyond giving new employees a reason to stay, aiding in their transition into the firm will allow for an easier integration on both sides. This can be done by intermingling a few employees at a time, allowing for relationships to be built across firms. Also, by having a point person whose sole responsibility is to aid in your integration, they can help to resolve any issues that may arise. In doing these two things, you will be able to cultivate an environment that is ideal for fostering relationships and working together, making your full integration much smoother.Small business acquisitions can be a tremendous source of value for both the acquiring and acquired firm, which is why ensuring their success is important. By keeping the why behind your acquisition and your employees at the forefront of your decisions, you will be able to do what is best for your business in the long run. To learn more about how to successfully acquire a small business, please watch an interview with Kearney partner, Ben Smith. Additional information on mergers and acquisitions, including sourcing your next acquisition, reviewing what you already have, or preparing for sale, can be found on our website.{ "@context": "http://schema.org/", "@type":"QAPage", "mainEntity": { "@type": "Question", "name":"What can be done to help ensure the success of a small business acquisition?", "text":"What can be done to help ensure the success of a small business acquisition?", "answerCount":"1", "upvoteCount":"10", "dateCreated":"2020/03/17", "author": { "@type": "Person", "name": "Ben T. Smith IV" }, "acceptedAnswer": { "@type": "Answer", "text": "Any acquisition can be daunting, regardless of the company's size. However, when it comes to acquiring a small business, integrating into your company is just different than with a large acquisition and certain considerations need to be taken to ensure its success. Through the following recommendations, you'll be able to address and resolve some of the pain points many firms face in this process. First, prior to finalizing the deal, and as obvious as it may seem, decide what it is you are buying. Are you buying the business itself, including its products and profits? Or are you buying the talent and intellectual property? Understanding why you want a small business is necessary for making decisions after the deal is finalized. Every choice, from how you integrate your firms to how to best manage your business and customers, comes back to the reason behind the acquisition. Second, at the heart of every acquisition should be the people - both at your firm and at the firm you’re acquiring. This is especially true in the case of small businesses, where the employees make up the DNA of the firm. Decide, before you close the deal, on who you want to retain and make every effort to keep them. Instead of focusing on inconsequential issues, such as when employees clock in and out, recognize the impact the acquisition is having in their lives. Give your new employees a reason to stay - whether that be through the use of incentives or other means - and show them why they should buy into your firm and the changes that you're making. Beyond giving new employees a reason to stay, aiding in their transition into the firm will allow for an easier integration on both sides. This can be done by intermingling a few employees at a time, allowing for relationships to be built across firms. Also, by having a point person whose sole responsibility is to aid in your integration, they can help to resolve any issues that may arise. In doing these two things, you will be able to cultivate an environment that is ideal for fostering relationships and working together, making your full integration much smoother. Small business acquisitions can be a tremendous source of value for both the acquiring and acquired firm, which is why ensuring their success is important. By keeping the why behind your acquisition and your employees at the forefront of your decisions, you will be able to do what is best for your business in the long run. To learn more about how to successfully acquire a small business, please watch an interview with Kearney partner, Ben Smith. Additional information on mergers and acquisitions, including sourcing your next acquisition, reviewing what you already have, or preparing for sale, can be found on our website..", "dateCreated": "#qaAcceptDate", "upvoteCount": 1, "url": "https://www.kearney.com/web/answers/article/-/insights/what-can-be-done-to-help-ensure-the-success-of-a-small-business-acquisition", "author": { "@type": "Person", "name": "Ben T. Smith IV" } } } }