6 Ways to Prepare Your Start-Up for an Acquisition
With enough hard work, your start-up will eventually thrive and reach the success you’ve been looking for. Once your start-up has made a noticeable impact in the industry, there may be exciting opportunities awaiting you.
With any successful start-up, your company will catch the eye of interested buyers. These offers usually come from larger companies that may be interested in conducting an acquisition on your start-up. Sometimes, you may have no interest in selling your business, which is totally fine and understandable.
At other times, the acquisition offer may be so lucrative that it will seem very enticing to you.
When the opportunity comes, you may decide that your start-up will benefit from mergers and acquisitions. As the business owner, you should know the minutiae of the process since it can be pretty tricky to navigate. By preparing your start-up for the upcoming acquisition, the entire transaction can go as smoothly as possible.
Here is more information on how to prepare your start-up for a successful acquisition:
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1. Outline Your Goals
Accepting an acquisition offer is an important decision for any business. Before the formalities even begin, you should seriously think about whether you want to proceed with an acquisition or not.
There could be a myriad of reasons as to why you want to sell your company, ranging from the professional to the personal. At the same time, there may be just as many reasons for you to turn down the offer.
To help you with this decision, set up a detailed document and layout your thoughts carefully. There could be multiple motivations for you to go ahead with the acquisition process.
For example, you may be provided with a brighter future in terms of the profits to be made. Or there could be the potential to boost sales and expand your services to a wider demographic.
2. Organize Your Finances
Once you are ready to proceed with the acquisition, one of the first steps to take is to get your finances in order. Your company should be properly organized in all departments, leaving no trace of mistakes or errors.
This is crucial because all it could take is a single discrepancy for things to go out of order down the line.
Start by going through your company’s financial history and make sure your bookkeeping is accurate. All taxes should be filed, so that legalities don’t interfere in the process of the acquisition.
If there are new hires at your company, keep them in the loop of what is going on too.
3. Be Open and Transparent
An acquisition is a big change for all employees, who may have lots of questions and concerns. Keep your team aware of the acquisition progress, as clarity will always make things streamlined.
Discuss the acquisition with your management team whenever applicable. Make sure that they know of all details regarding the acquisition, as well as how their role will be impacted.
By making sure that every senior professional in the start-up is well informed, things will go by much smoother. The last thing any business owner wants is to have one party lacking in pertinent information. Transparency will always be necessary, especially for a huge business procedure like this.
4. Bring in the Experts
It is extremely important to have the rights experts by your side before the acquisition takes place. Gather your lawyers and other advisors if need be.
These professionals can be consulted on questions on all matters to the acquisition. For example, if you are unsure about what your ownership will look like post-acquisition, do your due diligence. Research the case studies on other successful start-up acquisitions, like Postmates or Slack.
These experts should be able to provide you with the most informed answers possible. No question here will be too unwise to ask. By aligning these experts with your start-up, your company will be in an optimal position in the months to come.
Experience matters, especially in an acquisition.
5. Prepare Your Clients
If your start-up has been in business for a while, you probably have established a great list of clients. These clients will come to your business for services and will maintain loyalty if you do a great job.
When the topic of the acquisition comes up, these companies may be wondering how they will continue to use your services.
It is recommended that you inform your clients about the acquisition and let them know about your continued role. After all, you will still be around conducting your operations, albeit in a larger capacity.
Loyal clients will always be around to use your services, no matter what form your business comes in.
6. Keep Up the Narrative
Acquisitions can be rather stressful, especially if you are a small start-up. That is why, as you move forward, it is critical to keep the narrative of your start-up working in your favor. You don’t want the entire public-facing image of your business to go away.
The amount of work put in over the years should always be remembered, even as you think bigger. Let the relevant parties know that you want to remain as the face of the start-up moving forward.
Your business presence will always be around, so long as you have a say in it!
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