I believe I merged successfully in 2009 with my current business partner. At the same time, we saw another operation go through a similar merge, but their approach led to confusion, resentment and eventual break up. While every merger has its problems, we approached it with our eyes open, having scoped each other out for years. We also addressed issues before or as soon as they arose to minimise damage. We actually benefited from lessons learned but freely admit we made plenty of mistakes in the process.
A merger is not an acquisition; it is a full consolidation of two previously separate small businesses. A true merger in the legal sense occurs is when both businesses dissolve and fold their assets and liabilities into a newly created third entity. This entails the creation of a new business.
Even though there aren’t a lot of people who enjoy reading financial statements, it is essential to review them, as you will be taking on any liabilities or issues that pop up later.
Have I put you off the idea? Growth of any type usually isn’t easy. Giving up full control can be hard, but with patience and persistence, the benefits to both parties are tremendous. Planning is essential; follow a defined plan. The process should be discussed, agreed and reviewed as it progresses.
Have you got any war stories or tips for others? Please share them.