to perform your first bid is a frightening, it is an exciting experience. Development is one of the core target of every emerging startups, make the right bid may be a game changer. One study show that two-thirds of all acquisitions will face the possibility of failure. In this case, only a little possibility to succeed, but it does not necessarily will favor you. So how do you ensure that you first try in inorganic growth, will not be your last time?
because DesignCrowd (Australia creative projects crowdsourcing website), in the past five years we have successfully acquired three companies, also experienced some good, the bad and the infamous inorganic growth. Here are some of our main experience, maybe it can help you, and let you know in order to the success of the company, you should do something.
hold you buy “subject”
when I was in a large listed company as m&a advisers, the same company executives to the basic principle of acquisition often published different opinions, I was very depressed. When you for success is what still remains unclear, how could you do it successfully?
the theme of the investment plan, it is to buy for your enterprise to increase the value of doing a clear and detailed illustration. A good investment theme contains a specific goal – to promote the overall strategy of the enterprise. These should be in a sentence or two you will be able to capture the content, and had each of your leadership team should be able to express it clearly.
the investment subject is for all the purchase (and acquisition) activities of the backbone. Before the deal, it not only can tell you data collection work. By tracking and judgment, then it can also measure the scale of acquisition success.
your investment theory is merely a hypothesis, and it need to review and test. The key will affect your ability to achieve trade value. Before embarking on due diligence, in order to thoroughly evaluate each question, you need to take some time to confirm these key problems, and draw out the need to collect data.
use your hard work on these thresholds, rather than develop your sense of of all kinds of business. Threshold question in every purchase, as well as both of them for your investment research, there are links. That is to say, some commonly used threshold problem includes customer’s economy (growth, acquisition cost, life value, erosion), the ability of employees (width, depth, participation), and the cultural conflict and integration costs.
remain objective mind
as a new company, breakthrough of growth is very attractive, it can affect your ability to the objective thinking of trading. When evaluating whether it should continue to make acquisitions, in addition to the need to have a clear trading agreement, you also need to find an objective way. You can think of himself as a judge, but is not a desire to conclude the transaction of the participants. So you can measure rationally the facts before you, and reference data.
a lot of people involved in the due diligence, is a particularly effective method. Collect different point of view, and to open a potential problem, help to ensure the realization of objectivity. In you and your team review threshold question repeatedly, diligently to create a specific checkpoints, and formal decision – to go or stay. Repeatedly review your investment analysis and measure whether should continue to make acquisitions, a move that will be as you expect, create value for you.
spend time on the communication
just like that, you always keep a rational mind, and decided to continue trading. At this point, it is easy to highly concentrated in the operations of executing a transaction, but you want to keep communication with all stakeholders, such as customers, employees, and your board of directors (your board is also very important). If you don’t communicate in a timely manner, not transparent, not considerate, so it is very perfect integration plan can also be blown to pieces.
it means change, change the uncertainty caused by resistance and uncertainty. Communication is the hate after an antidote for poison. For all stakeholders to build a strong communications plan, will help you to reduce uncertainty, will also get their support. – if you are their, their shoes do you want to answer any questions? Use this method to notify you of communication content, as well as they can create a public space and directly to you to ask questions.
keep in mind that trading is just the beginning
“to buy or not buy? It is just the beginning of your journey. Buy a company, and realize the benefits brought by acquisition, they are two different things. Achieve your investment goals, will depend on how you deal with the new entity integration.
most start-ups used to moving forward at the speed of light, but when it comes to integrate new business areas, the faster is not always the best. Merge most companies need to spend a lot of time and sustained efforts. As a starting point, in your “charged” before consolidation at full speed, make sure you have bought the “product” is very useful. You also need to put the resources and energy into these activities, after acquisition and more project also need to get your attention. Considering everything you need to pay attention to matters, you need to integrate reality schedule, to do things their priorities right.