Sure you’ve heard the term merger? Simply put, the merger is a merger of two or more separate companies into one new business. Mergers can be profitable, especially for small businesses who are struggling to survive, because it can be used as a growth strategy. With proper planning for the transition, mergers can be a positive step for small business, especially the vertical merger.
Before starting the merger, you can prepare financial statements and cash. Here are some things you should do before the merger:
1. Plan ahead in determining the best way to facilitate the incorporation of the company so that the culture of the Organization would avoid a “collision.” You should give careful thought to cultural integration. While the focus is financial gain, you have to defend even the enhance the morale of the staff. Integrating teams that include members of both entities so that they understand that they are a single entity with a single purpose.
2. consult with intermediaries such as a merger, business brokers who handle Your business merger. They put on a percentage of the cost price for their services include assessment and follow up on all the required legal procedures.
3. Negotiate in advance, who will stay and who will go. You don’t need to duplicate the task. Agree on who will be responsible for a specific task so that the conflict will not occur. Therefore, each owner has the highest position in the company, but they are not able to enjoy the same functions in the company that will be created.
4. specify a name for your new company and check some things like debt, employment contract and obligations with other companies.
5. specify the policies of both companies. Avoid using only your original company policy and do not accommodate another company policy.