How to Structure a Merge for Your Business
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Structure a Merge for Your Business
Any aggressive business person intends to grow their business to reach a wider range of customers and potential customers. The creation of a merger is among the renowned ways for business growth, especially for small businesses. However, whereas a merger can come with bigger plant size, market share, diversification of products, etc., it is not devoid of risks and challenges. With the guidance of business attorneys in Chicago IL, the risks and challenges involved can be minimized.
Here are some of the challenges involved, as explained by our Chicago IL business attorneys:
Different cultures
The backbone of any organization is its employees, and when businesses merge if employee integration is not done, there is a possibility of a clash. As a small business, the best solution for avoiding such clashes is ensuring that the two businesses are first compatible before proceeding with the merger.
Lack of Transparency and Inefficient Communication
Communication is like an ingredient of success. Therefore the merging businesses should ensure that every detail about the merger is communicated to all parties. Details that should be shared include; market share, details on customers, personnel details, etc. When a merger is formed, each business comes on board with their customers. It is therefore crucial that customer behavior from all sides is addressed so that the customers coming on board from each side of the merger don’t feel the gap hence lead to withdrawals.
Ascertaining the exact assets
When a miscalculation is done during asset evaluation, the result can have a great negative impact on the merger. Our Chicago IL business attorneys have experience in asset evaluation. Therefore the best way to ensure that calculations done during the asset evaluation process are correct is ensuring that you are working closely with our lawyers.
Firing the wrong employees
When a business is operating singularly, the value of each employee is easy to tell. However, with a merger, the other party might not see the value of some employees. Most mergers have a track record of firing employees that would have positively grown the business. Hence, the merger ends up losing one of the best talents because of a lack of a proper channel to access employee value.
Subsequently, there are various steps of the creation of a merger, as explained by our Chicago business lawyers below:
Check your own financial health
A financial health check is a crucial step towards the creation of a merger. For most businesses, a financial health check is no longer about thoroughly checking their profits and loss statements, but whether the business assets have liquidity. After determining the liquidity prowess, the next step should be an assessment to establish whether the capital at hand is capable of withstanding the challenges that come with a merger. Conducting a financial health check on your own can be challenging, but with our able Chicago business lawyers, you can establish where you stand before committing to a merger.
Work with a competent team
If you have no experience in transaction assessment, working with professionals in that sector is one way to secure your interest. Your team should offer you advice on the expected future performance of the merger and advice on the challenges.
Have well defined goals
Business goals will help you focus and create a path which you want to follow. Ensure that you are not entering a transaction blindly. Clearly understand what you intend to achieve before you commit.
At Anthony J. Madonia & Associates, our commitment is to ensure that our clients make the right business decisions by forming a merger. Therefore, our attorney will ensure you are aware of the challenges and risks involved with a merger and subsequently take you through the required steps of forming the merger.