One of the most effective ways to grow your small business is to merge with another small business. The company you are merging with may already have a loyal customer base, infrastructure to expand, and efficiencies you can capitalize on by using them within your original business. But before you can enjoy the success of a merger, you must take the right steps in navigating the joining of two small businesses.
A big part of the change won’t be felt by you, but by your customers. When your small business merges with another business, you should notify both your existing customers and the customers of the merging business. Let the customers know of changes that will show up on their statements or invoices. This includes correct contact information and any changes made to the remittance location. When you take over another companies customer base, you want to review the existing agreements and evaluate whether you wish to continue those agreements. If you are going to operate under one brand, make sure to clearly define your company name, logo, design scheme, and approach to handling customers. Although it is important to point out the changes, you should also let your customers know what will be staying the same including your existing products, locations, or hours of operation.
You want to communicate to existing vendors about changes from a merger too. This includes updating the address where shipments get sent and invoices get mailed, and who the contact will be for your new company. Inform the vendors impacted by company name changes. A vendor may be used to receiving a check from Company XZY. Inform the vendor that because of the merger with an existing business, future payments will come from Company ABC. You also want to use just one payment processing system. This helps to create a cohesive manner in which to operate both businesses simultaneously.
Lastly, you need to address your staff as the two businesses merge. Some roles will be duplicated, so you should be prepared to make tough decisions relating to who will be kept. Those who are maintained should understand their role in bringing on a new company and the challenges that go along with merging with another company. Immediately import employee data so your payroll can be streamlined into one system, and process checks out of a single location. Tax withholdings or remittances should come from the sole surviving entity. A merger of two small businesses is complicated, but taking the time to understand your requirements and reaching out to everyone impacted by the change go a long way in making your merger a success.
This can be tricky to manage, and maybe you haven’t even found the right company to merge with yet. All of the steps of a successful merger in the lower middle market can be guided and facilitated by SA Capital Partners. Turning to the expert team for your merger needs helps reduce your stress and maximize your small business’ potential.
About SA Capital Partners:
SA Capital Partners is an innovative financial services firm that specializes in mergers & acquisitions advisory and capital raising for lower middle market businesses. We aspire to give all the tools necessary to complete any transaction. SA Capital Partner’s financial services industry specialists provide comprehensive, integrated solutions to banking transactions. Our breadth of services and industry knowledge allow us to understand each client’s unique business needs. Our goal is to make all financial services available to every small business.